Dubai Duty Free has reported first 10-month sales of $1.527bn to the end of October, as it aims for $1.9bn in 2014.

 

In its 31st year, Colm McLoughlin, Executive Vice Chairman acknowledged in a statement [embargoed until now] that the retailer has had a very good start to the year and is solidly on target to meet its aforementioned sales target.

 

Only recently Generation Research estimated that DDF actually took the number one spot in 2013 as the leading DF&TR airport retailer in the world, ahead of Incheon Airport last year.

 

Meanwhile, the 10-month sales result is all the more remarkable considering the disruption at Dubai International Airport earlier this year. In an interview with TRBusiness last month, McLoughlin said that the retailer performed much better than expected throughout the 80-day runway refurbishment period.

 

He said that despite only having one runway for the entire period, the retailer was still 7% up in the first eight months to the end of August, by an impressive Dhms.255m ($69.4m).

 

ON TARGET FOR $1.9BN

Commenting last month, McLoughlin said: “We were expecting to drop Dhms.380m ($103.4m), so we actually only dropped Dhms.220m ($59.8m). So we’re 7% up on last year, which means we’re just a tiny bit up on our budget. In Dirham talk that is over Dhms.7bn for the year, and that will be $1.9bn, and it looks like we’re going to do that.”

 

In addition, he added that despite the runway challenge, Dubai International Airport is also still expecting to hit 72m passengers this year compared to last year’s 66m, which will also make it the largest international airport in the world.

 

In DDF’s latest statement covering the 10-month trading period, it points to Terminal 3 continuing to hold its position as the biggest in terms of accumulative sales, accounting for 64% of its total turnover.

 

Perfumes accounted for 16% of total revenue, maintaining the category’s sales mix leadership with a remarkable $251m sales increase in the ten-month period, followed by Liquor and Gold.

 

McLoughlin added: “Other notable increases in sales were seen in Cosmetics and Handbags and small leather, showing a 21% and 54% increase respectively over last year’s figures. Moreover, departure sales reached $1.34bn, accounting for 88% of total revenue, while arrivals sales showed a 10% contribution to reach $154m during the 10-month period.

 

 

 

 

ANNUAL SALES SET TO PASS $3BN IN 2018

“The expansion and upgrade of Terminal 2 (T2) last year has provided us with an opportunity to extend our product range and boost sales in T2, which accounts for 8% of our total revenue and is growing.”

 

The leading retailer says it is continuing to improve its retail operation in 2014 with ongoing refurbishment in Concourse C (Terminal 1) while it looks ahead to the plans in place for the much-awaited opening of Concourse D in early 2015. This retail operation will comprise 7,000sq m of retail space, while the new concourse will cover some 65,000sq m and be the home to 100 airlines that currently operate from DIA’s Terminal 1, Concourse C.

 

Speaking to TRBusiness last month, the Executive Vice Chairman added that DDF’s duty free sales are also forecast to exceed $3bn in 2018 and passenger traffic is expected to pass 95m by 2020. In response to a question on the projected category sales volumes being achieved by the retailer in the future, McLoughlin was equally transparent.

 

He said: “In the next five years we expect 90m passengers and the suggestion in duty free is that we could easily double the volume sales of liquor from the 7m bottles – which we expect this year – to 14m, and they’re expecting that we would sell 7m cartons of cigarettes – and the note here says as well as another 6m bottles of perfume.”

 

[A profile of DDF’s operation today incorporating an interview with Colm McLoughlin appears in the November issue of TRBusiness, including more analysis of the $1.5bn sales achievement covered here-Ed].