Dufry Group CEO Julían Díaz told financial analysts yesterday that the world’s leading DF&TR retailer is committed to ‘its first wave’ new business operating model (BOM) launch of 17 new generation duty free stores between now and FY2018.

 

Speaking to financial analysts after yesterday’s first quarter earnings results briefing, the company said that following the January 2017 launch, it will initially implement its new business operating model with the launch of the first five new-style stores where work is already in progress.

 

KEY LOCATIONS

These include the duty free shop locations of London Heathrow Terminal 3; Zürich; Melbourne; Cancun; and Madrid, although by region Dufry has also earmarked countries in both North and South America for similar attention.

 

Commenting on this initiative in his address to financial analysts yesterday, Díaz said: “The implementation of the business operating model is one of our main priorities.

“So far, the first wave includes 17 countries. All the countries, the 64 countries of the company, will be implemented from the business operating model point of view by December 2018.”

 

‘THE MOST RELEVANT INITIATIVE…’

Díaz added that the new generation store is ‘probably the most relevant initiative’ from the commercial point of view that Dufry is implementing and he says the first airport to be completed will be Melbourne in Australia.

 

He said that other major priorities for this calendar year will obviously include the dual major focus on cash generation and deleveraging debt, while continuing with its commitment to continue driving organic growth by growing its spend per passenger.

 

Dufry will also obviously be accelerating its commercial initiatives, while digitalizing its business and refurbishing its existing operations. At the store level Dufry will also increase its retail space, while focusing on cash generation and deleveraging.

 

23,000SQ M OF NEW SPACE…

The company points to 23,000sq m-worth of additional retail space coming on line in 2017 to 2018, 10,800sq m expected in Latin America, 6,100 in North America, 4,800 in Southern Europe and Africa, 1,100 in Asia, the Middle East and Australia and 200sq m in the UK, Central and Eastern Europe.

 

[The total number of square metres operated by Dufry in calendar year 2016 was 420,000-Ed].

 

Last, but not least, Dufry points to a ‘strong pipeline of potential new projects’ comprising some 32,200sq m, with North America said to be at the forefront with 43%, followed by Asia, Middle East and Australia with 27%, Latin America 22%, Southern Europe and Africa 7% and the UK, Central and Eastern Europe with 1%.

 

Commenting further, Díaz said: “Then we have a significant set of actions for driving our customer experience via digital innovation based in four pillars.

 

BIG IN-STORE CHANGES ARE PLANNED

“One, is first of all understanding better of customers through research and mystery shoppers. The second one is training all the staff and providing them with the latest technology.

 

“This is something I comment on in previous calls with the iPad technology. And then three, Omni channel digital experience, great preorder and also the initiatives in order to improve the efficiency of the operations through the internalization. Social media is going to be part of this.”

 

He said that the final pillar is the digital innovation that Dufry plans to introduce with the opening of its new generation stores.