Dubai: Well before visitors head for Dubai's mega malls, they can see every-thing that Dubai retail stands for right there at the entry point to the emirate: the Dubai International Airport. To do that, they just have to follow the signs leading to the Dubai Duty Free (DDF) shopping arena.
Since it took the first tentative steps 28 years ago — and well before the creation of Burj Al Arab, the Emirates Towers, The Palm and Burj Khalifa — DDF, along with Emirates airline, had been the definitive face of Dubai, and all that it stood for, for the global audience. It says much about DDF that despite the many attractions that Dubai offers, its relevance has not dimmed.
More traffic
"When Dubai Airport was probably the 10th biggest in the world, we were the second- or third-biggest duty free in the world," said Colm McLoughlin, executive vice-chairman of DDF, who has been running the operations since its inception.
"This year so far, the traffic increase through the airport is 7.6 per cent — ours is just under 16 per cent.
"Traffic (through the Dubai Airport) is growing all the time, and we could have sat and just enjoyed that growth. But there are two things we have to do — increase the sale per head and, what we call in the duty free industry, the penetration.
"If you take good airports, the general rule of thumb is they sell duty free goods to about 18 to 20 per cent of departing passengers.
"DDF sells between 49 to 50 per cent. In 1994, our sale per head was $5.50. (Dh20.19). This year it will be $47-$48.
"We are probably the top in the world at that."
All of this will come in useful when DDF launches passenger operations at the Al Maktoum International Airport in Dubai World Central (DWC).
"When passengers start using it, we will have a shop fitted out and ready to go," said McLoughlin. "It's a small area of 2,500 square metres, but DDF is eventually going to place 64,000 square metres of retail space there in the long term.
"There's an awful lot going to happen well before that. Right now, we have 18,000 square metres of retail space at Dubai International Airport. About a year from now, Concourse Three will open and we are going to put 8,000 square metres of space there.
"Recently, the Dubai Government announced the building of an additional concourse at the airport. That will open, perhaps, in 2016. This will do two things — increase the capacity of the existing airport to 95 million passengers, and we're going to put another 8,000 square metres there.
"And all of that before DWC becomes big. I love it that we will play our part in all this."
Tweaks
Given the spread that Al Maktoum International Airport offers for retail opportunities, will DDF look to do something different? Or will it take on the nature of tweaks?
"More of a slight tweak here and there," said McLoughlin. "In the duty free industry, lots of the airports rent space out to people who then do concession retailing. What happens is that they are always competing with each other and always trying to do new things.
"Here, because we run the whole operations and it is owned by the Dubai Government, we tweak things all the time to improve things. It could be to increase the merchandise and the way it is presented.
"We have found that we do such things very successfully. Then when we move to a new area, all we need to do is tweak the things we have done."
Did DDF miss out by not going in for management contacts at other duty frees? "We have been asked on a number of occasions to get involved at other places," said McLoughlin. "The reason we have never gone after it is we have always been too busy here.
"That's the honest answer — in our 28 years we have increased our business six times.
"I do not regret not going after outside opportunities — not for one minute. It would have meant setting up separate units which could have made $1 million or more. But by tidying up operations here, we could do better — that was our attitude all the time," he said.
More space: Steady growth
For Dubai Duty Free, the breakthrough year would have to be 2000, which saw the opening of the Shaikh Rashid Terminal.
"That made a huge difference," said Colm McLoughlin. "It allowed us to create a lot of space. And when Terminal Three opened more recently, that made another huge difference.
"Last year we sold 71 million pieces of merchandise.
"This year we are doing 60,000 transactions every day, delivering 400 pallets every day. On November 4 alone, we delivered 1,000 pallets of merchandise."
