The impressive CDF Mall at the Sanya International Duty Free Shopping Complex.

The world’s leading contingent of travel retailers improved their revenue haul by 9.4% year-on-year to notch $44.03 billion, TRBusiness can report.

While recovery continued in 2023, entrenched macroeconomic and geopolitical challenges colour the outlook.

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Such has been the pace of change over the past 22 months that only Gebr. Heinemann, Duty Free Americas (DFA), China Duty Free Group, Avolta and Lotte Duty Free defended their respective year-on-year positions in the inimitable TRBusiness Top 10 International Operators ranking 2024.

Position shifts characterise this year’s ranking, but the despite the changes it is worth noting that none of the familiar protagonists dropped out of the ranking entirely.

China Duty Free Group’s consolidation of its business at home matched with ambitious expansion overseas was just enough to ensure it defended its position at the summit of the ranking under parent China Tourism Group Duty Free Corporation Ltd (US$9.55 billion), nudging Avolta (US$9.49 billion), which itself has experienced a transformational period post-Autogrill acquisition, into second place.

In percentage growth terms, King Power International Group (Thailand) enjoyed a significant boost to sales (circa +86%), with Lagardère Travel Retail and Aer Rianta International (ARI) also enjoying robust gains.

Ju Nam Kim, CEO, Lotte Duty Free: “We are trying to diversify our customers’ age groups and nationalities while also targeting our existing major customers, Chinese, to get through tough times.”

Chinese travellers: The waiting game continues

The long-awaited entrance of ARI and Lagardère Travel Retail into Zayed International Airport’s Terminal A in Abu Dhabi took the headlines towards the end of last year.

In the case of the Paris-headquartered travel retailer, progress in the Middle East has been buoyed by strong performances in other regions.

“Our business has experienced a dynamic rebound particularly in EMEA and North America with key tender wins and openings,” commented Frédéric Chevalier, Deputy CEO at Lagardère Travel Retail (p23).

“We have also strengthened our focus on corporate social responsibility by reducing the environmental impact in our stores and continuing to invest in our people and the communities we operate in.”

However, Lagardère like other retailers continues to feel the dampening effect on spending from Chinese travellers.

Meanwhile, a myriad of protracted challenges in South Korea’s retail market stifled performances from Lotte Duty Free and The Shilla Duty Free.

These sentiments are echoed by Ju Nam Kim, CEO of Lotte Duty Free. Speaking in an exclusive interview with TRBusiness “(see p29), he said: “The current global economic slowdown, including in China, is unlikely to improve consumer sentiment in the near term.

“We are experiencing a reduced number of Chinese travellers and a reduction in their spending power,” he acknowledged. “This has required us to adapt our offer to a new passenger mix.”

“We are trying to diversify our customers’ age groups and nationalities while also targeting our existing major customers, Chinese, to get through tough times.”

Elsewhere, DFS and DFA returned flatter performances year-on-year.

Leon Falic, President, DFA: “For 2024, we’ve allocated substantial capital expenditure to drive growth in our border stores.”

In the case of the latter and as reported last week, DFS Group’s CEO Benjamin Vuchot is leaving the business to be replaced by former CEO Ed Brennan, effective 1 November.

DFS is continuing with an ambitious array of store refurbishments and openings, including its 128,000sq m Yalong Bay project in Sanya, Hainan due to unveil in 2026.

Unsurprisingly, it will be looking to recoup those investments in the face of pressures in preparation for a full recovery in key Asian travel and spending markets.

In the case of DFA, President Leon Falic has made no secret of his growth ambitions for full-year 2024.

“So far this year, we have made significant progress in expanding our global footprint,” he told TRBusiness. “We are actively pursuing growth opportunities and working towards ambitious targets.”

DFA’s border store business is a natural focus. “For 2024, we’ve allocated substantial capital expenditure to drive growth in our border stores, reflecting our strategic focus on this sector,” added Falic.

Inside this 27th edition of the DF&TR industry’s market-leading print reports ranking the leading travel retailers, TRBusiness brings you one-on-one interviews, in-depth analysis and commentary on the top 10 operators, plus additional bonus content from single-location operators Qatar Duty Free and Dubai Duty Free.