In the first six months of 2015, the potential customer reach of travel retailer DFS [with reference solely to the airport market, not downtown] will outpace the airport market in the Middle East as a whole – but it won’t keep up in Asia Pacific or North America.

 

Based on multiple ‘big data’ sources, aviation analyst Air4Casts says that DFS [part-owned by LVMH] “will make spectacular 2015 passenger progress in its Middle East business area” with customer reach expanding by over +15% against an increase of +11.6% in international passenger flows for the region as a whole (see chart below).

 

However in its Asia Pacific heartland, the retailer will achieve a +3.4% H1 increase, lower than the +5.2% forecast for the region as a whole. Meanwhile in North America, where the retailer has sizeable west coast operations at LAX and SFO, its reach will increase by +2.8% well below a regional forecast of +4.9%.

Referring to international traffic in North America, Air4Casts says: “Much of the recent growth, which is now easing back a little, has been driven by departing US nationals from a wide range of US airports.” The analyst points out that the percentage differences “have nothing at all to do with DFS” but are down to the forecast traffic performances of those terminals where the retailer operates.

Over the six months, the global average of international passenger departures will be up by +5.6%.

LIQUOR & TOBACCO WELL EXPOSED

From a product category perspective, the Air4Casts data reveal that DFS is significantly better exposed to international travellers in Liquor and Tobacco, than in Beauty or Confectionery, particularly in Asia (see chart below).

In Asia Pacific this year, DFS’s liquor outlets will reach 17.9% of travellers departing on international flights from the region, with tobacco at 17.8%, whereas beauty and confectionery gain just over 10% exposure.

In the Middle East liquor is also noticeably stronger versus the other categories, although in North America all categories have a similar reach at just under 20%.