DDF expects retail sales to jump 13% on back of record year

Rising traffic, high-spending Chinese tourists to bolster sales at Dubai airport retailer
DDF expects retail sales to jump 13% on back of record year
DDF saw retail sales of nearly AED5.3bn in 2011
By Claire Ferris-Lay
Tue 03 Jan 2012 12:40 PM

Dubai
Duty Free expects
sales at Dubai International Airport to increase by 13
percent to AED6bn ($1.6bn) in 2012 as traffic and sales per passenger increase,
its executive vice chairman has told Arabian Business.

The
airport retailer said sales last year rose nearly 16 percent to a record AED5.3bn as it
benefited from increased passenger traffic and growing demand from Chinese
tourists.

“For 2012
we’re budgeting sales of AED6bn, which is an increase of AED700m over 2011 and
that works out at just over 13 percent,” Colm McLoughlin said.

“We are
selling a little bit more to everybody that goes through, and we’re selling to
more people. Penetration is very high at Dubai in comparison to other airports.
If you look at good airports around the world they generally sell to about
18-19 percent of departing passengers whereas at Dubai Duty Free we sell to
just under 50 percent of departing passengers,” he added.

The
retailer on Monday said it had recorded an average of 61,000 sales
transactions per day in 2011. Perfume sales, which contribute to 15 percent of
total sales, increased 22 percent to AED803m.

Liquor
and gold, the second and third best selling items, increased 18 percent and 20
percent to AED744m and AED591m respectively, said the firm.

Passengers
at Dubai International Airport increased by nearly nine percent in November
compared to the same month a year earlier, the operator said last month.
Traffic from January to November end reached 46,287,234, up 7.8 percent over
the corresponding period in 2010.

China’s
growing middle class coupled with the UAE’s safe haven status amid the
region's political turmoil helped boost sales for the world’s largest
airport retailer
in 2011, said McLoughlin.

“[The Arab Spring] has been positive
for us; people have changed holidays and they are holidaying here rather than
elsewhere,” he said.

“We’re
noticed an increase in the number of sales to Chinese people. Of our top ten
major sales for individual items, two or three of those people every day are
Chinese and one of our biggest individual items in the last year was Chunghwa cigarettes."

Dubai
Duty Free in August said it would make its first large-scale infrastructure
investment by part-financing the building of the fourth concourse at Dubai
International Airport. The retailer did not specify how much it would be
investing but said it formed part of a wider plan to $7.8bn into expanding
Dubai’s airports.

The
retailer, which plans to open its first hotel in Dubai – the Jumeirah Creekside
Hotel – this year, said it had no further plans to expand its business outside
of retail this year.

“From the point of view of further hotels and further
interest like that we are waiting to see what the response to [Jumeirah
Creekside Hotel] and how good it goes before we say let’s do another one,” said
McLoughlin.

“The
helping to fund concourse four is fairly long term,” he added.

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