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Corporate Governance

The target customers for most of the travel retail stores in Australia are travellers

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The target customers for most of the travel retail stores in Australia are travellers

The target customers for most of the travel retail stores in Australia are travellers. Since the company provides services that require direct interface with customers, it has invested in providing customer centred services. This has allowed Lagardère Travel Retail stores to create healthy relationships and loyal customers globally. Following the movement restrictions, closures and lockdown put in place by most countries in an effort to the spread of COVID-19 most aviation companies have been forced to cancel all their flights indefinitely(Shah, and O’Horo, 2020). This has left the retail travel stores with rarely any customers to keep their business operating. The decrease in the number of customers has been the primary contributor to the company’s financial decline. Moreover, COVID-19 pandemic has had a significant impact on customers’ shopping habit. Today customers seem to spend less on luxury. Instead, they are stocking up on necessities such as groceries, shifting to private means of transportation and staying indoors (Markham and Smith, 2020). These behaviors have had a significant impact on the financial situation on retailers, especially because most of the products being sold at the travel retail stores are luxuries. The stores are stocked up with snacks, beverages, books, souvenirs convenience items, as well as travel essentials which in the current satiation are not essentials for most people.

With the constant spread of the pandemic, Lagardère Travel Retail has been forced to temporarily shut down some of its stores in efforts to protect its workers as well as the customers. Should the situation become worse, the company will be forced to close all its stores. This is primarily because the distribution centres that supplies and distributes their products may no longer be able to if the quarantine restrictions are placed upon them due to localized outbreak(Baldwin and Tomiura, 2020). Keeping the stores closed is the only way to ensure the safety of all the employees as well as the customers. Additionally, currently, the travel Retail stores are operating on tight margins due to decline in sales, which makes them vulnerable to cash flow shortages. If the pandemic persists, the stores will have no option but to close down. Closing down the stores has affected the company’s financial position, mainly because the stores are its primary source of income. Even though the company also has online services where customers can order whatever they need and have it delivered, they are not as productive compared to the stores. However following the movements restrictions and advisement to maintain social distance most people are now shifting towards online shopping, but this does not mean that the travel retail shops are safe(Baldwin and Tomiura, 2020). If the covid-19 pandemic persists, Online retailers may also have to cancel their delivery services due to the risk of accelerating the rate of infection.

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