Duty-Free Shops Face Crisis as Closures Hit Industry Hard

The closure of the Woodstock Duty Free Shop Inc. marks a significant blow to the duty-free industry, which is grappling with declining sales and reduced traffic across the U.S.-Canada border. John Slipp, who has operated the store since 1994, announced its closure this month, citing a combination of factors that have devastated his business, including the lingering impacts of the COVID-19 pandemic and ongoing geopolitical tensions.

Fewer Canadians have been traveling to the United States in recent months, a trend influenced by U.S. trade policies under former President Donald Trump and concerns over border treatment. As Slipp noted, reduced border traffic directly correlates to diminished sales for duty-free retailers. “It was very difficult. The business had many good years,” Slipp reflected. “I certainly didn’t want to be in the position of calling an end to a business career.”

At its peak in the early 2000s, Slipp’s shop employed around 15 staff members. However, the pandemic forced him to lay off four employees in March 2020. After reopening with a skeleton crew of two, he found that by the end of 2024, sales remained approximately 20 percent lower than in 2019. The situation worsened further in early 2025, leading to his decision to close the store.

Statistics Canada reported a 36.9 percent year-over-year decline in Canadian residents returning from the U.S. by automobile in July. This marked the seventh consecutive month of declines, further straining the duty-free sector. Barbara Barrett, executive director of the Frontier Duty Free Association, described the situation as a “full-blown crisis,” noting that sales have plummeted between 40 and 50 percent year-over-year since late January. Some remote crossings have reported annual declines of up to 80 percent.

According to Barrett, the current summer season should typically be bustling for duty-free shops, yet traffic patterns resemble those seen during the pandemic. “We are unfortunately afraid that we will likely see more closures as we draw to the end of the summer,” she stated.

Unlike larger airport duty-free stores, which are often owned by international corporations, border shops like Slipp’s are predominantly family-run businesses. As Canadian travelers steer clear of U.S. destinations, travel expert Claire Newell noted a trend toward domestic and international alternatives. “While there are many people who are choosing to travel within Canada, we also see more people heading to popular destinations,” she said.

Barrett, advocating for regulatory changes, emphasized the need for adjustments to taxes on products that place border shops at a disadvantage compared to U.S. competitors. “We have some taxes on our products that our U.S. competitors don’t have. So we’re asking for those to be changed,” Barrett explained. Additionally, she called for the inclusion of duty-free stores in federal support programs, similar to those established during the pandemic.

The August 2 announcement of Woodstock Duty Free Shop’s closure highlighted the federal and provincial governments’ promises of tariff relief support. Slipp expressed his disappointment at the lack of immediate assistance, noting that he had high hopes for these programs. He is now focused on advocating for rent deferral options and loan programs for duty-free shops that lease land from government bodies.

Reflecting on the future of the industry, Slipp acknowledged the significant challenges ahead. “I’m grieving the loss of my business, but I’m also accepting the reality that the business environment has changed,” he stated. “There is nothing in the bag of tricks that would suggest positive changes in this industry in the short to medium term.”

This report by The Canadian Press highlights the ongoing struggles faced by duty-free retailers, which are increasingly vulnerable to the shifts in consumer behavior and government policies affecting cross-border travel.