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Dubai Duty Free eyes Dh10b sales
posted on 25/01/2012: 30 views
Duty Free expects to double its current annual sales to Dh10 billion by 2018 as it expands its retail space at Dubai International Airport and Dubai World Central.
The US$7.8 billion expansion plan will include adding 8,000 square metres of retail space at the new Concourse 3 which will be dedicated to the Emirates A380, scheduled to open by the end of this year.
"The government also recently approved that a Concourse 4 will be built in 2016 at the existing airport. Dubai Duty Free and Dubai Airport Company will finance that at a spend of Dh28 billion. Around 60 to 65 per cent of that spend will be provided by Duty Free," said Colm McLoughlin, executive vice chairman of Dubai Duty Free.
Last year traffic through Dubai International Airport was 51 million passengers, up 8 per cent from the previous year.
According to McLoughlin, they are expecting 56 million this year. The new building will bring the capacity of the airport to over 95 million which is expected to be reached by 2020.
Dubai World Central, currently being used by freight and executive jets, is expecting passenger traffic sometime this year.
Dubai Duty Free also has a small shop set up in that location. In the future, the plan is to have 64,000 square metres of retail space. According to the government decree that will be operated by Dubai Duty Free. "My own view is that traffic will be delayed a bit because of the decision to enlarge the existing airport," said McLoughlin.
Sales figures posted by Dubai Duty Free last year made it the largest airport retailer in the world in terms of turnover.
In 2011 Dubai Duty Free achieved sales of Dh5.31 billion, a 15.69 per cent increase over the previous year.
Sales were led by perfumes which retained their position as the best selling category with an increase of 22 per cent year-on-year. This year Dubai Duty Free is budgeting for an increase of 13.5 per cent in turnover which will bring the retail outlet to Dh6 billion in sales.
"We have to sell 72 million pieces of merchandise in order to meet that target. We currently deliver between 5-600 pallets of merchandise to our Duty Free outlets daily which is a huge logistical difficulty.
"Our store management is currently 70 per cent automated and we're increasing that to be 90 per cent automated at an investment cost of US$20 million," said McLoughlin.
"Dubai Duty Free has doubled its business six times in the last 28 years. Two things we do well each year since the beginning of operations is we have increased our sales per passenger and we have increased our penetration," he added.
While the Duty Free in other international airports sold to 18 to 20 per cent of departing passengers, Dubai Duty Free sells to just under 50 per cent. – Gulf News
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