A small footprint, but sales volumes could be high for R&F.
A Swedish company has opened the first border/port shop in Wales in a 40-foot shipping container to take advantage of demand for duty-free goods now that the U.K. has exited the European Union. A second store is in the pipeline.
Travel retailer R&F—a distribution and, more recently, retail arm of Stena AB Group which runs Stena Line ferries—began trading at the store this week in Holyhead, on the island of Anglesey in North Wales. The ferry port, where operators like Stena and Irish Ferries run services to Dublin, is home to about 13,000 people many of whom work in port and ferry-related services.
In a LinkedIn post, R&F Travel Retail described the new store as “probably the world’s smallest border shop.” It will offer duty-free deals and bargains for U.K. travelers that are free of duty and VAT thanks to Brexit. New allowances came into force in January with excise duty no longer due on alcohol and tobacco bought when leaving Britain. This amounts to a tax and duty saving of £2.23 for a 75cl bottle of wine, for example, and £11.50 for a one-liter bottle of 40% ABV spirits.
R&F, founded in 1979, claims that shopping in its minimalist corrugated can will deliver savings of up to 60% versus the British high street for ferry passengers waiting for their departures to Ireland. Much of the alcohol offer is for bulk purchase to limit cannibalization with stores on the ferries themselves.
In a statement, Jari Virtanen, managing director of R&F Travel Retail, said: “We are confident that we can offer the best prices on the market due to our purchase volumes, and we look forward to welcoming travelers with some great offers.”
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Volume sales will be a focus in the Holyhead store.
Buying at scale
As one the largest travel-retail players in Northern Europe, with warehouse hubs in Malmö and Gothenburg in Sweden, and Holyhead in Wales, the company has buying scale. It has been supplying duty-free and travel products to shipping companies, embassies and airports for more than 40 years.
Stena Line’s Irish Sea ferries have seen strong duty-free sales this year. (Photo by Christopher … [+]
Underlining the discount nature of the Holyhead shopping experience, the metal unit, while designed to have a modern feel inside, primarily reflects a value-for-money offer. “The fact that the shop is in a 40-foot container is not only fun but also practical, with commercial flexibility,” said R&F. Changes to the product mix can be made quickly given the adjacent warehousing, which means that R&F can flip the assortment regularly depending on demand, and to keep regular travelers interested.
R&F collaborates with ferry players like Stena Line, Finnlines and TT Line, and it distributes more than 47 million travel-retail items to about 90 shops annually. In April, R&F expanded into airport retailing by opening its first solo-run store at Cologne Bonn Airport.
Stepping into retail
The border shop in Holyhead Port is another step towards more self-owned and operated travel-retail stores. A third shop is planned for another Welsh port at Fishguard, but that one will not be in a container. “We are very excited to take our next step in becoming a pan-European travel retail player,” said Virtanen.
With this in mind, R&F has been on a recruitment drive in recent months. Three weeks ago, former head of purchasing at Thomas Cook Airlines and more recently CEO at Nordic Beverage Company, Charlotte Rankloo, was hired as a retail manager. Other advertised roles have been for a head of product and purchasing, visual merchandisers and international sales staff.
Stena Line has already seen some benefits from Brexit. Last year, R&F was assigned to update all the ferry group’s onboard shops affected by the British departure from the EU, with new prices and shop layouts.
That reaped rewards: during the first quarter of 2021, Stena Line’s shop sales between the U.K. and the EU soared by 34% versus the same period in 2020 while spending per customer shot up by over 80%, a ‘revenge’ effect that’s been widely seen in retail. At the time, R&F’s commercial activity leader Kajsa Edvardsson commented: “While we realize that it’s difficult to make a comparison with 2020, which was such a terrible year for the travel-retail sector, we are seeing a positive trend and remain optimistic for the future.”
The good news for R&F’s new container shop is that Stena Line’s onboard sales growth was even better across the Irish Sea, up 53%, due to excise duties being high in both the U.K. and Ireland. Additionally, some well-known brands of alcohol proved popular. For example, Irish Sea sales of Jameson Whiskey in the first quarter outstripped those for the whole of 2020.
