x Abu Dhabi, UAEMonday 24 July 2017

Dubai Duty Free sales rise

Dubai Duty Free improved its position as the biggest travel retailer in the world as holidaymakers and business travellers bought more than US$900 million of perfume, cigarettes and other goods in the first nine months of the year.

Dubai Duty Free improved its position as the biggest travel retailer in the world as holidaymakers and business travellers bought more than US$900 million (Dh3.3 billion) of perfume, cigarettes and other goods in the first nine months of the year.

Sales swelled 14.5 per cent compared with the same period last year to hit $902m, putting the retailer on track for a record $1.25bn in sales for this year.

The rising sales are in line with the trend for Middle Eastern duty free and travel retailers, whose revenues for the first eight months of this year are up 18.7 per cent over the same period a year earlier to $1.8bn, according to the latest data from Generation Research, an independent industry research company based in Sweden.

Trevor Lloyd-Jones, a Middle East specialist with Generation Research, said it was a "golden period" for the region's travel retail industry. Sales are rising on the back of increased global travel through the region's airports and investments in new airport infrastructure.

"There is a new terminal now in Cairo, with brand new duty free shops. In Saudi Arabia, there are lots of major airport terminal projects going on, and there's a plan to refurbish and relaunch airport retail shops," said Mr Lloyd-Jones. "It's kind of a golden period when you have tourism and airport environments in the Middle East being taken to another level."

Dubai Duty Free has been the leading duty-free retailer in the world based on total sales for two consecutive years, edging out London's Heathrow Airport and Seoul's Incheon International Airport.

Colm McLoughlin, the managing director of Dubai Duty Free, expects it to hold on to its reign based on this year's performance.

"We are pleased that our penetration level and average spend has been consistently high," he said. "We are heading into a busy sales period in the final months of the year and are optimistic that the year will result in record turnover."

The region's travel retailers are outpacing most of their counterparts around the globe.

Duty free sales in the Middle East in August were up 16.5 per cent compared with the same month last year, according to Generation data. In the Americas and Europe, sales growth was pegged at just 13 per cent and 7.1 per cent respectively. Africa is also trailing behind the Middle East, as August travel retail sales rose 16.3 per cent. Only Asia-Pacific, with its strong economy and growing numbers of travellers, is ahead of the region, with sales growth of 24.9 per cent in August compared with the same month last year.

But in the long run, the Middle East is forecast to win the race.

The global travel retail industry is expected to reach $85bn in 2020, up from $34.5bn last year, Generation Research predicts.

During that period, travel retail in the Middle East is expected to grow by an average of 15.3 per cent annually, the largest increase globally, said Mr Lloyd-Jones .

"Apart from the bigger airports, like Dubai, there are so many other countries in the Middle East that are at a high growth point. And all the signs indicate that they will continue at a high growth phase next for the next 10 years."

aligaya@thenational.ae