Owners of duty free shops say they continue to suffer the fallout from the U.S. trade war, with shops at two southwestern Ontario crossings reporting drops in business in the 30 per cent range year over year.
One of those shops is located at the tunnel connecting Windsor, Ont., and Detroit. The owner says he’s worried about what’s next as he heads into the slowest time of the year in January.
“If this continues, unfortunately, we will probably have to make some difficult decisions,” Abe Taqtaq said.
“Being a family business … we’re going to try to hold this out as long as we can before we start downsizing a little bit. But at the end of the day … you know, I’m not going to sugarcoat this. … I am very concerned about our business going into the next few months.”
Taqtaq said he remains optimistic that business will pick up again but he understands why people don’t want to travel to the U.S.
He hopes those who do cross the border will consider stopping by his store, he said.
Decline in cross-border travel hitting duty free shops hard
Return road trips to the U.S. by Canadian residents fell once again in October, according to Statistics Canada, this time by 30.2 per cent.
That number has fallen by at least 30 per cent year-over-year since March.
Passenger vehicle traffic from Windsor to Detroit was down around 5.9 per cent between Jan. 1 and Nov. 30 of this year when compared with the same period last year.
That’s according to data from U.S. Customs and Border Protection.
Passenger vehicle traffic from Point Edward (Sarnia) to Port Huron is down around 27 per cent for the same time period.
Tania Lee, the co-owner of Blue Water Duty Free in Sarnia, Ont., said she is also seeing a similar sales decline as the Windsor duty free shop.
The drop in traffic is harming duty free shops right across the country, said Lee, who is also the president of the Frontier Duty Free Association, which advocates for Canada’s land border duty free stores.
“We had one store close in Woodstock, New Brunswick,” she said.
“And we have stores in B.C. that are teetering on the edge. And also stores in Manitoba that have been really hard hit. They are telling us that they won’t make it through the winter time, and it’s heartbreaking because you can feel their pain.”
The stores had already survived COVID-19-related border closures and were paying off their COVID-era loans only to be hit with more hardship, she said.
The Frontier Duty Free Association is pleading for help from the federal government in the form of repayable loans for shops in need, Lee said.
It’s also asking for relief from red tape that shop owners say hampers competition — such as laws requiring compliance with Canadian domestic labelling requirements even though the shops are selling exclusively into the U.S. market and must sell products that are compliant with U.S. rules.
“We are really motivated,” Lee said of the campaign.
“We don’t have a choice. We have to get this done. There’s too much that’s riding on this. … We have committed to showing up in Ottawa at any meeting that we can get. We will fly there, we’ll walk there. We’re going to … show up because our stores need it, and we have to be heard. And I’m hopeful. I’m really, really hopeful.”
