Lotte targets US$243m annual sales from new MEL duty free concession

By Luke Barras-hill |

Lotte Duty Free has set its sights on ballooning its Oceania duty free business to become the largest in the region in 2024 after capturing the concession at Melbourne Airport (MEL).

As reported last week, the South Korean travel retail giant won the rights to operate the 10-year duty free contract at MEL’s international terminal following a fiercely competitive round of bidding, the final shortlist of which was first revealed by TRBusiness in December. MEL and Lotte Duty Free issued a joint statement on Monday.

Lotte Duty Free will preside over a total shopping area of 3,592sq m across the departure and arrival halls and confirmed today (25 January) plans to expand this to 5,800sq m in the future as it eyes annual sales from the operation of KRW300 billion/US$243 million.

The footprint in MEL now ranks second in Lotte Duty Free’s global airport estate next to its business operations at Singapore Changi Airport.

In a statement, Lotte Duty Free notes the busy duty free landscape in Australia and New Zealand.

DFS Group, Gebr. Heinemann, Dufry, ARI and Lagardère Travel Retail all operate in the region.

Ju Nam Kim, CEO, Lotte Duty Free, stated: “The Melbourne Airport branch, which will open in the first half of this year, will be a key base for Lotte Duty Free’s global business expansion and market recovery.”

Lotte Duty Free’s branch at Melbourne Airport will stock the full range of categories, from P&C, alcohol and tobacco to fashion & accessories. Lotte will takeover the operation currently managed by Dufry (pictured above) from 1 June.

The travel retail juggernaut, which ranked second with sales of US$4.86 billion in 2021 in the inimitable TRBusiness Top 10 International Operators 2022, has been progressively reopening its global travel retail estate.

Downtown shop inaugurations in the likes of Sydney, Australia and Danang, Vietnam were highlights of 2022.

Other high-profile openings are on the cards, with shops at Singapore Changi Airport due in the first half of this year and Hanoi, Vietnam in the second half of 2023.

Its current overseas footprint covers 13 stores in six overseas countries.

In 2022, sales from its overseas operations increased by approximately 340% year-on-year.

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