ARINA General Manager Glen Morgan, in conversation with The Moodie Davitt Report’s Dermot Davitt. 

ARI North America General Manager Glen Morgan talks about the impact of much-reduced travel from Canada to the USA, Mexico and Cuba, reflects on the levers that can still drive spend in a difficult environment, and looks ahead to the exciting transformation of duty free at Montréal-Trudeau International Airport. 

In the almost 28 years since ARI acquired the business (United Cigar Stores) that became its North American division, the region has delivered a solid contribution in terms of revenue, profit and consumer reputation to ARI, parent company DAA and airport partners.

Lengthy contracts at Montréal-Trudeau International plus regional airports, allied to the advantage of being a 100% ARI-owned operation, continue to ensure the business is an attractive part of the group portfolio.

Yet the past 18 months have been as challenging as any period in the division’s history. Tariff threats and related tensions between the US and Canadian governments and a sharp fall in air travel from Canada to the USA have hit not just flight schedules but the income to airport services such as duty free that rely on them.

That’s not the only factor influencing business today. The recent outbreak of cartel violence in parts of Mexico has deterred Canadians from flying there – that market had supplanted the USA as the most popular in the region for outbound holiday makers.

And in recent weeks all major Canadian airlines have suspended flights to Cuba, another popular destination; this is linked to the unreliable aviation fuel supply at Cuban airports, a consequence of the loss of Venezuela as an oil supplier after US intervention in that country in early January.

Ally those dynamics to soft consumer confidence and caution about spending more generally in Canada’s domestic market, and the trading climate is tough to say the least, as ARI North America General Manager Glen Morgan acknowledges.

“The story through 2025 was about headwinds caused by the US tariffs and Canadians’ reluctance to travel to the USA. What we see today is those travel numbers becoming weaker. Q4 last year was until then the weakest for US-bound travel, and Q1 this year has continued that trend. And the Canadian airlines have reacted to that trend with cuts to their US schedules for the summer ahead.

“We did a very good job through 2025 in encouraging increased spend to those passengers that did fly, but it is difficult to repeat that a year on when we’re into double-digit passenger number decreases. If you put that situation alongside the current picture of travel to Mexico and Cuba, then I can say we are approaching the rest of 2026 with caution.”

The headwinds caused by the shifting tides of politics and economics are difficult to mitigate, but Morgan says that strong marketing and brand partnerships that add newness and surprise for travellers have helped boost conversion and spending.

“We have done a lot in the past year, led by our superb Head of Marketing Katherine Sullivan, whether it is pop-up shops with the brands, local activations or experiential campaigns that slow people down and offer us the opportunity to engage with them.

“Across our business, there is a lot of work and strategic thought that goes into that steady list of ever-changing, ever-evolving activities. We are building a reputation for ARI North America as being a partner to activate and launch through. We have done some fantastic campaigns with Dior and Chanel in particular, and these not only enhance what we do, but they help the reputation of the airport.

“And it’s not only that these campaigns bring a smile to people’s faces in Montréal; we have introduced them to smaller locations such as Edmonton and Winnipeg, with a huge reaction from travellers and from those airports. Wherever we can we are giving people an Instagram moment.”

This links neatly to how ARI is deploying its brand expression ‘Joy on your way’ across its estate, with its own particular resonance in Canada.

Morgan says: “Travel retail should be the place where people can finally take a breath and start the more pleasant part of the journey. ‘Joy on your way’ is how we express that at ARI. The teams really enjoy the activities around this, but so do passengers.

“People love to stop and take a picture, or to taste or experience something, and sometimes it’s the simple joy of having a conversation with one of our team.

“We shouldn’t underestimate the importance of those things. We can talk about the impact of complex world problems, or how we’re integrating AI, but the interaction between our staff on the floor and the passenger who hopefully becomes our customer is absolutely priceless in representing who we are.”

With the aid of strong marketing plus brand investment, several categories have stood out amid a difficult past year.

P&C, led by fragrance, has had a strong year within the overall business, with both the luxury end and value end of the category showing growth. Canadian products across categories have also stood up well, buoyed by a diverse offer and the perennial popularity of items from maple syrup to cookies to ice wine.

Liquor remains a tough market, which the company puts down to a combination of factors ranging from societal trends to the Quebec liquor board’s (Société des alcools du Québec) near year-long ban on US-made products; duty-free retailers are supplied by the liquor boards in each state.

Selected US liquor items were permitted to return to shelves from 12 February, but this was an exercise to reduce inventory on products that would expire within a year.

“The US whiskey business is challenging and there is no sign of it coming back any time soon,” says Morgan.

On the positive side, the wine business is being encouraged through the recent launch of a new category concept, Salon du Vin, at Montréal Duty Free and Quebec City Duty Free. The openings build on the sense of place for travellers at these locations, says the retailer.

The concept was inspired by the stylish ‘Speakeasy’ bars, lounges and wine bars that can be found across Montréal and Quebec City in response to the expectations from passengers for “authentic and unique experiences”.

The offer ranges from Canadian wines to leading producers from France, Italy, Spain, Portugal, South America, Australia and South Africa – tailored for the passenger demographics at each airport.

Morgan says: “We have long had a volume approach to wines, but Salon du Vin is more about appealing to the connoisseur wine drinker rather than the vacationer looking to have a lower-priced bottle with dinner. This is about spreading out the customer base more. It is one area that we identified where we could do a better job. We have a great customer audience that flies to Paris, London or to Italy, all strong wine markets. We spent a lot of time and resource speaking to our customers. And they told us they would like to see a wider range and some higher price points, and we have created an environment that is more attractive for that type of customer.”

Another core part of the business that will be further developed is destination. This will be a central focus of the forthcoming Montréal-Trudeau duty-free store transformation, which begins in April/May and runs for around one year across five phases.

Morgan says: “The local offering from all the categories will be consolidated and made adjacent in a central, high-flow position. So whether you are buying your Canadian-origin products, liquor, confectionery and even beauty will all be in the same space.

“We think it is going to be fantastic and we hope it will encourage cross-selling between categories. It should give shoppers access to the full range of price points, which should be advantageous in helping us drive spend.”

More broadly the project has been shaped by ARI’s observations of passenger behaviour, with on strong insight showing that 85% of travellers walk past the store without engaging. This in turn helped drive the rethink around entrances, sightlines and category adjacencies.

Driving greater visibility and engagement will be a design that should resonate with cues from Montréal, with elements that celebrate maple, ice wine, hockey and even the style of the city’s distinctive convenience shops, called dépanneurs.

“The design and all materials are inspired by local architecture and culture in ways I have never seen in a duty-free store,” says Morgan. “Our mission is to have the best representation of local and the most attractive design of a duty-free store in North America.”

Aside from memorable local flourishes in the design, highlights will include an enhanced use of digital, a permanent bar fixture, a permanent ice wine installation, a new Spectrum sunglasses store, plus a larger beauty department with space both for global labels and more local heroes as interest in homegrown brands rises. Examples of the latter include Luc Vincent, Karine Joncas, Green Beaver and Watier.

Reflecting on other locations in Canada, Morgan says he is happy with performance of the refurbished duo of duty-free stores at Edmonton International Airport, revealed in January 2025.

Also in 2025, ARI strengthened its footprint at Québec City International Airport with the launch of a standalone Spectrum boutique, the retailer’s second concession at the airport and its first duty-paid outlet.

ARI is also seeking further opportunity across the wider region, from Canada to the USA to the Caribbean.

“We continue to build relationships with airports that we hope will lead to opportunities in the future,” says Morgan. “The new-look Montréal shop will be an important step in that journey and will present a window into what we are capable of delivering in this region.”

Finally with the edition appearing at the IAADFS Summit of the Americas, we ask Morgan what his message is to the brand community about ARI’s view of partnership and its capability to support their ambitions?

“It comes back to the Trinity,” he says. “We are showing an enthusiasm and willingness to partner with brands, and we have got airports that are very supportive in helping us to activate.” He reinforces this key point about the airport role, noting that airport teams have been centrally involved in bringing experiences to life for passengers.

“We like to be able to give our customers something different. If a brand is looking to promote and activate their product and excite customers with the right offer in a visually attractive way, we can put them front and centre at Montréal Airport, where they will be exposed to customers from all over the world. We are open to doing business with those partners.”