TR Consumer Forum 2024: Ramesh Cidambi gives keynote speech

By Benedict Evans |

“It’s a great moment.” Ramesh Cidambi on his new role within DDF, following the retirement of Colm McLoughlin, former Managing Director.

Ramesh Cidambi, who became Managing Director for Dubai Duty Free (DDF) prior to the TR Consumer Forum 2024, welcomed delegates on the second day of the forum with a candid, humorous and insightful look at the present and future performance of DDF.

“I’ve been in this job for 4 days, Colm was in it for 41 years. Already I have great appreciation for what he did. He built a fantastic platform in terms of the team, the retail offer, and in terms of the connections he built.”

“Meeting the budget in 2024 has been challenging,” added Cidambi, noting DDF was only AED3.3m under budget YTD, though did note DDF had already revised its pax forecast twice, upgrading to ninety-three million passengers for 2025.

Cidambi also spoke to a general softening in consumer sentiment, and thus spend, at key times of the year, referring to data recently collated specifically for the TR Consumer Forum.

Regional variation

“Tech has been the story of Apple, which constitutes 65% of our elctronics business and is down 28%. Iphone sales are down 23%, especially impacted by Russia,” said Cidambi.

“We think a lot of parallel imports and increased western and MEA imports have increased the domestic offer, so there’s less motivation for Russians to spend at DDF,” added Cidambi.

Chinese pax saw a ‘huge jump’ acording to Cidambi, but he expressed discontent at the performance of the region.

Breaking down share by area (sales), total departing pax went from 313,286 in 2023 to 660,023, but total sales only saw a 26% rise to $66.05m, and spend per shopper dropped from $362 to $277.

Cidambi afforded delegates an in-depth look at DDF performance trends from January to May 2024 versus the same time last year.

Cidambi wryly noted of his own presentation: “If I was listening to myself I’d be saying ‘fantastic analysis’, but what are you guys doing about it?”

Cidambi’s response to himself? “We’re focused on utilising our 800 or so employees and energising them in terms of customer service, shop floor upselling and with an urgent focus on improving our communication.

We mustn’t rest on our laurels. We must take full advantage of available technology to reduce friction at POS, and look much more closely at market dynamics within and between countries.”

Category performance

“Overall from January to May this year, our strongest categories were perfumes, tobacco, and confectionery, but for May our concern is the following; every major category other than perfumes and tobacco, is down,” said Cidambi.

He heralded the 19% year-on-year growth of the perfume category as a major boon to DDF, though made mention of the continued lacklustre performance of cosmetics, which has never fully recovered since the pandemic, and continues to “plod along.”

During May, business across some of the major cosmetics boutiques at Dubai International Airport (DXB) dropped by 11%, with Cidambi pointing to this as – once again – a clear sign of softening consumer sentiment.

Cidambi especially spoke to the performance of the Wines & Spirits segment across DDF: “We see a big volume drop in terms of litre when compared with 2019,” noted Cidambi, adding: “Wines & Spirits makes up nearly 39% of the total DDF business, and while brands push premiumisation and price increases, this will reach a tipping point.

We’re already seeing fewer new customers, less customer retention, and lower penetration in this category. All these things are a worry for us.”

New developments

“It would not be right to talk about our record breaking 2023, it’s more important for everyone here to talk about the here and now than that of last year,” said Cidambi, joking with moderator John Rimmer about the somewhat sombre tone he had adopted during the keynote.

There was much to celebrate however for DDF, both through 2023 and in more recent times.

“We’ve opened new liquor shops in Concourse A and B as of May 2024, we’re renovating the arrivals lounges in all three terminals, we’ve added Louis Vuitton and Cartier Boutiques to Concourse A, and we’re renovating the watch offer in Concourse B,” commented Cidambi.

Cidambi offered delegates a look at plans for the extensive series of renovations either planned or underway for the arrivals lounges at DXB.

“That’s 30-35% of our total retail offer in terms of space, which totals 38,000sq m, and represents more than $50m investment and AED2bn in turnover.”

TRBusiness recently provided in-depth coverage of these various developments at DXB for its Top 10 Airports report, linked below the sponsors banner.

Cidambi also made mention of the news that DDF will move primary operations to Al Maktoum Airport, but noted DDF was still duty-bound to continue innovating at DXB.

“We have a project to upgrade the retail offer at DXB because we’re still there for at least eight more years while continuing to work on Al Maktoum,” commented Cidambi, adding: “Our biggest challenge now is continuing to meet the expectations of passengers in such large numbers with the retail landscape developing so differently at a regional level.”

READ MORE: OUT NOW: June/July issue + Top 10 Airports

READ MORE: DXB defends ACI top spot as DDF announces new management

READ MORE: Schiphol retains ACI passenger ranking as commercial expansion steps up

 

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