Europe’s Airport Duty-Free Sales Hit $1 Billion A Month—But A More Regulated Future May Loom

Nigel Keal: “As regulatory and market pressures increase, turning insight into action will depend on collaboration across the value chain and a coordinated, credible voice in support of European travel retail.”

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Europe’s airport duty‑free sales reached €7.63 billion ($9.06 billion*) between Q1 and Q3 2025, a 5.8% year‑on‑year increase. The rise, while solid, comes at a time when the travel retail industry is in a tricky phase as regulatory pressure, shifting passenger behavior, and geopolitical uncertainty are reshaping one of the continent’s often overlooked retail engines—airport, cruise, and border shopping.

At the annual business forum of the European Travel Retail Confederation (ETRC) in Amsterdam on January 22, the new data showed that retail revenue was growing well—and faster than air traffic, whether measured against ACI Europe’s traffic data or the ForwardKeys figures used by ETRC.

According to the airports association, Q3 passenger traffic rose by 3.9%, trailing the 4.5% and 4.6% registered in Q1 and Q2 respectively. A simplistic, unweighted calculation puts the average at somewhere around 4.3% for the 9M period. The growth rate is, however, preliminary: it is based on a sample of around 450 airports, whereas the definitive traffic report, when released, will be based on data supplied by 650 European airports.

Travel analyst, ForwardKeys (now part of Amadeus) put passenger volumes growth at 5.4% for the 9M period. If this figure is more reliable, then there has been a flattening of growth and a spending slowdown in Europe. For reference, airport sales growth in 2024 hit 9.6%, reaching a new record of €9.50 billion ($11.3 billion) according to ETRC, versus a European airport traffic increase of 7.4% (source ACI Europe). A year earlier, in 2023, the respective growth percentages were similar at 18% and 19%.

The 9M headline numbers were compiled by Pi Insight. The travel-retail specialist data house said that unit sales rose 4.9% which led to average spend per passenger ticking up slightly at 0.4%. ETRC said this was a “modest but meaningful improvement” in a sector where global spend‑per‑head has historically been volatile, post-Covid.

Facing structural challenges

Yet the forum’s tone was far from celebratory. The theme—Protect, Persuade, Prosper—underscored the recognition that the sector’s operating environment is becoming more complex. ETRC has warned that the duty-free industry needs a sharper focus on advocacy, and better adaptation.

For example, key product categories have generally performed positively, with the key exception of spirits which posted a marginal decline. This data point is likely to raise concerns among global drinks groups whose long reliance on premiumization may be over-cooked at this stage.

Regulatory scrutiny is intensifying across Europe, from packaging rules to health‑related restrictions, and sustainability mandates. The industry has looked for carve-outs and, most recently, it had a win with the World Health Organization when the duty-free channel was not included a protocol to eliminate the illicit trade on tobacco. The WHO did not identify the channel as significant in distributing sucg products, a decision shaped by evidence, lobbying, and recognition that the channel is tightly regulated.

However, the tobacco battle is far from over. In New Zealand, the push to end duty-free tobacco sales is in full swing, with health academics arguing that duty-free tobacco sales “remain a curious anomaly and contradict efforts to reduce smoking prevalence.”

Coordinated, credible lobbying

Back in Amsterdam, speakers from national associations and major brands stressed that fragmented lobbying was no longer sufficient. ETRC president, Nigel Keal, said: “As regulatory and market pressures increase, turning insight into action will depend on collaboration across the value chain and a coordinated, credible voice in support of European travel retail.” This has a better chance of safeguarding the duty‑free retail model and ensuring policymakers understand the channel’s economic contribution.

Economist and broadcaster Dr Linda Yueh set the macro backdrop, outlining how geopolitics, geo‑economics, and rapid technological change are reshaping global travel flows. For travel retail, this means exposure to shifting passenger demographics, new digital expectations, and the risk of regulatory divergence across markets.

A panel featuring leading channel players such as retailer Avolta, food giant Mondelēz, Cyprus airport operator, Hermes Airports, and Kinetic Consultancy, also explored ways to drive incremental revenue rather than relying on passenger growth alone, which have led to declining average transaction values. Duty-free stores are also still heavily dependent on legacy retail formats while consumers are increasingly conditioned by e‑commerce, It means stepping up in this area and applying the data insights they would get, as Avolta is doing with its loyalty scheme.

The forum’s closing session was led by behavioural expert Lee Warren who said that commercial success will hinge not just on data, but on understanding how travellers make decisions in high‑stress, time‑sensitive environments.

For investors and brands, the message is that Europe’s travel retail sector is growing, but the fundamentals are shifting. Regulatory risk is rising. Consumer expectations are accelerating. While the latest ETRC data shows resilience, the conversations in Amsterdam showed urgency, and that the traditional retail model—built on footfall, impulse, and exclusivity—needs to evolve.

* All $ conversions at today’s rates unless stated otherwise.