Dubai rings up 5pc of global duty free sales

Colm McLoughlin, managing director, Dubai Duty Free, tells SHALU CHANDRAN that even here in Abu Dhabi, Changi Airport isn’t a threat to Dubai

Dubai aims to retain its position as the top three duty free operations in the world. What’s in store for the Duty Free with the opening of the new Concourse 2?

The total Duty Free business around the world in airports is $14 billion; Dubai Duty Free alone is $700 million this year, so we in fact account for five per cent in the total world of Duty Free’s, which is fantastic. We are likely to have 8000 sqm of retail space in Concourse 2, which will be opened at the end of this year. Dubai World Central, the new airport at Jebel Ali, will also come on-stream the end of this year. We will have 4000-5000 sqm of retail space there and I have no doubt that within two years we will be up a billion dirhams at Dh3.6billion. We expect to reach a target of $1 billion in sales by 2010.
From the future point of view, I think we will continue to grow and grow. We employ 1700 people now; by the end of this year that will increase to 2500 employees and five years from now we will have 4000 to 5000 employees on board, which is good for Dubai.

What has performance been at the Dubai Arrivals Duty Free?
The figures also include the Arrivals Duty Free. And Arrivals in Dubai Duty Free is growing and accounts for eight per cent of our total business which is very encouraging. And perhaps in the future, in airports around the world the arrivals duty free will grow more and more because you have security threats and airlines not wanting to carry certain items.

Were sales affected with the recent baggage restrictions?
No, baggage restrictions did not affect figures in Dubai Duty Free in spite of affecting duty free business around the world. We did set up various services for customers like packing and belly loading on some airlines.

How does DDF compare itself to Changi airport, with its mall-concept for travellers & non-travellers? Do you see this as a distance to go? Or has DDF evolved its own identity?
We think they have copied us. We had this mall idea. Sort of a super-store idea some 20 years ago and we are very satisfied with the model we have. A lot of other airports rent out space to other retail operators, we don’t do that. Everything we do the airport operates, we have a team of buyers, we buy merchandise from them and we sell this. And this model has been working very well for us.

With Changi soon to manage the Abu Dhabi airport, do you see this as a threat?
No, we love competition. We don’t see it as a threat. We know that Changi airport is very good, we know the people over there very well and I think they will make a fantastic job of Abu Dhabi. Abu Dhabi is a good operation but in comparison to Dubai it is still very small. Our sales last year was Dh2.5 billion, Abu Dhabi had sales of maybe under Dh300million, so I think Changi will be good for Abu Dhabi.

Category-wise, what is popular and what have seen the highest increase in terms of performance last year?
The categories have changed over the years. Gold and jewellery were the top categories, but in recent times perfumes and cosmetics have been growing considerably. Electronics have been growing. One new thing can come into electronics, like an ipod or a new mobile and it makes a huge difference. So, that category is also doing very well. Other categories like food and confectionary have been grown considerably.