Dubai: Retail sales by Dubai Duty Free (DDF), the world's largest airport retail operator, will increase 4 per cent this year to Dh4 billion, managing director Colm McLoughlin predicted at the Middle East Duty Free Conference on Monday.
He said that the retailer has already generated Dh3.4 billion in sales as of November 22, up 2.7 per cent over 2008 sales at the same time.
"We expect a 4 per cent increase by the end of 2009, as the trend is indicating," McLoughlin said.
Growth is being fuelled by the passenger numbers passing through Dubai International Airport and the performance of regional carriers that continue to buck the global trend. While growth continues in Dubai, retailers in other countries suffer losses.
The Middle East was the only region where sales grew in the first half of this year, by 2.6 per cent, in contrast to the global average, a decline of more than four per cent, according to Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates Airline and Group.
McLoughlin said growth has returned to about 3 per cent, equivalent to Dh90 million. Sales at the beginning of the year were down by 6-7 per cent, but in light of the record growth of 23 per cent in 2008, he said.
Passenger penetration at DDF is currently about 47 per cent, and McLoughlin said that they would try to push it up to 50 per cent.
"I have no doubt that penetration will go up," he said.
Last year, global duty free and travel retail business rose to $37 billion (Dh135.79 billion), an 8.8 per cent increase over the previous year, of which airport sales accounted for $21.8 billion.
With sales of $1.1 billion last year, DDF accounted for 5 per cent of the airport duty free business and 3 per cent of the global duty free and travel retail business.
Paul Griffiths, chief executive of Dubai Airports, said that check-in processes need to be consolidated so passengers would have 90 per cent of dwell time in Duty Free instead of 50 per cent. "Airports have a role to play to get rid of legacy processes," said Griffiths.
"The most profitable business at airports is the relationship between retailers and airports," he said.
