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Abu Dhabi, UAEMonday 25 June 2018

Dubai Duty Free first quarter sales surge 11%

The company is on track to beat last year's record revenue

DDF, which posted record sales of Dh7.05bn last year, said the month of March had a monthly record of Dh660.4 million. Sarah Dea / The National
DDF, which posted record sales of Dh7.05bn last year, said the month of March had a monthly record of Dh660.4 million. Sarah Dea / The National

Dubai Duty Free said on Thursday its first quarter sales rose 11 per cent year-on-year to Dh1.91 billion, as the implementation of VAT in January, which is not applicable in Dubai airports' departures, boosted sales.

DDF, which posted record sales of Dh7.05bn in 2017, said March hit the monthly record of Dh660.4 million, a 10 per cent increase from a year-earlier period.

“Sales are ahead of passenger [growth] numbers at Dubai International Airport and we are seeing double digit growth across a wide number of categories,” said Colm McLoughlin, executive vice chairman and chief executive of DDF.

“While the introduction of VAT and Excise duty in our Arrivals Duty Free has resulted in a drop in revenue in these areas, the fact that VAT is not applicable for the majority of sales in Departures has contributed to an increase in certain categories for departing and transit passengers.”

DDF expects sales to grow by more than half to $3bn by 2022 as Dubai International Airport, the world’s busiest for international travel, boosts capacity to meet a rise in tourist arrivals, Mr McLoughlin told The National in February.

DDF, which grew its annual revenue by 5.6 per cent in 2017, expects sales to reach Dh7.3bn this year. Expansion work at DIA, which is expected to boost capacity by around a third to 118 million by 2023 is also benefiting DDF.

The uptick in sales is in part due to an increase in the number of Chinese tourists, the biggest buyers who account for 9 per cent of total sales, as well as the return of Russian tourists. Both nationalities have been granted visas on arrival by the UAE.

The number of passengers at DIA from Russia climbed 28 per cent to 1.3 million in 2017, while visitors from China surged 19.4 per cent to 2.2 million thanks to the relaxation in visa restrictions.

Liquor, perfumes and tobacco held the top three spots of goods categories sold in the first quarter of the year. Perfume sales rose over Dh276m, accounting for 14 per cent of total revenue. Sales of Tobacco increased by 37 per cent to Dh220m while cosmetics was up by 25 per cent to Dh183m, representing 10 per cent of total sales,

Electronics sales grew 34 per cent to Dh169m, while watches rose by 16 per cent to Dh127m, according to DDF.

“There are a number of factors behind the sales growth, including the refurbishment of Concourse C, which will be fully completed shortly and other ongoing projects,” said Mr McLoughlin.