UAE. Dubai Duty Free is on track to hit the US$2 billion sales mark for the second year running, according to Executive Vice Chairman and CEO Colm McLoughlin, despite some challenges to trading earlier in the year.
In an interview with The Moodie Davitt Report, he said: “We will sell 71 million items of merchandise in our shops this year, and do 27 million transactions on our registers. We have managed to lift penetration and sales per head also, so if the trend continues, we are confident that we can recover what we lost earlier in the year and hit that US$2 billion mark.”
The factors that mitigated growth include lower than usual passenger numbers at DXB due to a runway closure in April and May; luggage restrictions levied by some airlines [limiting the weight of carry-on purchases -Ed] and the addition of VAT and excise duty on products in arrivals, which has hit tobacco sales. “Arrivals used to be 9% of our business and now it is 6% but we have more than recovered that in departures,” said McLoughlin.
Also, the recent introduction of the Digital Tax Stamp on cigarettes has resulted in a (short-term) shortage of popular brands in arrivals, but this situation should improve, he added.
Dubai Duty Free continues to invest for sales growth, and McLoughlin pointed to some positive factors influencing the operation.
“Key drivers for us have been the expansion and refurbishment of the retail environment, which has continued for the past year; the strengthening of partnerships and the investment we have made in digitalisation.”
Major store upgrades include a full refurbishment of Concourse C, which is now more “attractive, accessible and shopper-friendly”, said McLoughlin. Other big projects have centred around fashion, with the relocation of Salvatore Ferragamo and the opening of new Gucci and Chanel shops in Concourse B. “We have seen how impactful the fashion area in Concourse A has been and we wanted to recreate that in B,” he said.
Other projects at DXB have improved the retail offer and customer experience.
“In Terminal 3, work has commenced on one of the arrivals shops which will ultimately improve visibility for arriving passengers, while a special concept shop with a unique identity will also be ready early next year.”
Phase Two of the Concourse B refurbishment, including an overhaul of the two Food Plus shops in Concourse B East and West, should be completed by December. The Concourse B Food Plus Shop and Gifts from Dubai will be merged while Gifts from Dubai in the Central spine will be removed. Also, in Concourse B, the new Maison Christian Dior shop located at the West Side of the concourse opened in September.
In another move, Dubai Duty Free is opening a Concierge Shopping Service at two locations at the Emirates Business Class Lounge (Terminal 3). The company is also at an advanced stage of concept design for a new-look Gold Shop in Concourse B, to be completed in 2020.
*Full details can be found in the Official MEADFA Guide, published by The Moodie Davitt Report, which appears at this week’s MEADFA Conference in Muscat, as well as online here.
