Dubai Duty Free posts 14% surge in sales

Wednesday, Apr 04, 2012

Gulf News

Dubai: Dubai Duty Free (DDF) yesterday posted first quarter sales of Dh1.42 billion marking a 14 per cent increase over the same quarter last year.

The airport retailer said in a statement that the performance signalled a positive year ahead for the company, which is on track to achieve its full year sales target of Dh6 billion.

We have had a very good start to the year and are very much on track for our sales forecast of Dh6 billion. Terminal 3 continues to be the biggest in terms of accumulative sales and accounts for almost 58 per cent of our total turnover. However, the average spend of passengers in Terminal 1, which accounts for 35 per cent of sales, is higher, Colm McLoughlin, executive vice-chairman of Dubai Duty Free, said in a statement.

He added that the continued growth of flydubai provided DDF with an opportunity to boost sales in Terminal 2, which accounts for over seven per cent of the companys sales and is growing.

Sales in all three airport terminals rose in the first quarter, by 15 per cent year to date in Terminal 1, 21 per cent in Terminal 2 and 12 per cent in Emirates-dedicated Terminal 3, DDF said, adding that beverages, perfume and gold categories led the first quarter sales. Perfume sales inched up 22 per cent over the previous years first quarter to Dh213 million.

Traffic

Commenting on factors that led to a strong first quarter growth for DDF, Dermot Davitt, a market expert on travel retail sector, told Gulf News: Surging traffic increases at Dubai International play a part, but so do penetration levels of close to 50 per cent and strong sales per passenger, now close to $50.

In other categories, confectionary was up 20 per cent (Dh112 million), electronics 19 per cent (Dh107 million), cosmetics 23 per cent (Dh96 million).

Asked if the retailer is expected to continue to record an increase in sales through the year, Davitt said: Double-digit growth quarter by quarter has been a feature of Dubai Duty Frees recent performance; that looks set to continue.

He was, however, quick to add that political and social unrest in the Middle East remains a perennial concern and will continue to pose a challenge to the airport retailers growth. But to date Dubai has been a beneficiary of shifting travel and tourism patterns in the region following the Arab Spring, he said.

Chinese presence

Chinese passengers, meanwhile, continue to dominate the sale of high-end products, such as luxury watches and fashion, while also buying more mid-range brands across these categories, McLoughlin pointed out.

Echoes Davitt: The growing importance of the Chinese traveller will be a vital influence on the business in the years ahead, with positive implications for luxury goods sales in particular at Dubai airport.

Dubai Duty Free said it recruited 230 new sales assistants in the first quarter of 2012, bringing the total employee count to 4,013.

By Shweta Jain, Senior Reporter