Dubai Duty Free now the largest airport retail business in the world

Dubai: Colm McLoughlin, Executive Vice-Chairman, Dubai Duty Free (DDF), is an accomplished time traveller.

The Irishman who helped set up DDF in 1983, in what was once the first of Dubai’s three airports, and took the brand to a position where even the sky seemed within limits, traverses back and forth over a span of three decades upon the path that he has contributed in fashioning into the making of a super brand in the world of retail.

DDF has been growing since its inception in terms of business, profits and manpower. As it stands between completing 30 years in the business and spreading its retail penetration even wider, thanks to the growth of Dubai’s aviation industry, McLoughlin testifies that he and his team now oversee the largest airport retail business in the world.

He has another confession to make. It is in keeping with the constant innovations that the brand makes in reaching out to its ever widening base of customers.

“We are always on the lookout for new trends and innovative ways to do business,” said McLoughlin. “If something new arises we will watch for it and be ready for it. We have a study group going on at the moment and at the end of February we will have a full launch of 3,000 products available online. Customers can go in and pre-order and collect their goods at the arrival and departure lounges in the airport before they board flights. We will test this idea to gauge its merits and demerits and if we can do more to improve it then we will. The technical infrastructure for the launch is almost in place.”

These little tweaks to their already successful report card is what keeps DDF sharp.

Time travel will have to be put on hold. The focus for McLoughlin and his team is on the future when the UAE hosts the Expo 2020. Dubai’s growth plans in the aviation industry and other platforms will have synchronised perfectly into the organisation of this event when the country showcases its development to the rest of the world.

“DDF will be opening more than 7,000 metres of retail space in Concourse 3, which is being built in the existing airport. We have 2,500 metres available for business at the Maktoum International Airport and this will keep growing. The projections for that airport are a capacity of 160 million passengers and 64,000 square metres of retail space for DDF to do business in.

“By 2018, we will have business in excess of $3 billion and will be hoping to employ 9,000 people. All this has been boosted by the announcement that we will host Expo 2020.”

The business numbers that McLoughlin puts on the table are not meaningless, over-amplified digits. “A brand new metropolis will have been created in Dubai by then,” he explained. “There will be more people, communities, hotels, apartments and golf courses. Growth will be visible everywhere. Business at the airport will be a reflection of that advancement.”

Such a rapid pace is bound to have potential red lights, but McLoughlin believes, “there have been red lights for the past 30 years and they have been surmounted. There has been a fantastic job done on the infrastructure in Dubai and this has to be looked at with population and transport systems growing. So the thinking is in place there for any potential red lights that might come. It’s all very positive.”

In the course of this frenetic pace of advancement DDF is putting its own plans for growth into place.

“We are excited about the 7,000 square metres of additional space in the existing airport. This should be finished in a year’s time. Maktoum International Airport will continue to grow and discussions are on with the airport company about the infrastructure. There will be four hubs with space for 30 million passengers and we will be servicing the duty free spaces there. There is a royal decree in place which says DDF will do that. This means more penetration for us. We are growing all the time from the point of passengers using the airports we will have to do two things: increase sale per head – we have been doing that for 30 years – and, secondly, to sell to more people.

“We sell something to 49 per cent of everyone who go through the airport. So we are at the top of the world in that. Other airports are at 18-19 per cent. By 2020 our numbers will be more than 11 billion dirham in sales and our sales per head will be at $60 (right now it’s $47). Our penetration rates should be at 55-56 per cent.”

Like every responsible corporate citizen, DDF too is actively involved in the build-up and progress of Dubai Inc. When Dubai airports announced that it would invest $7.8 billion in an airport expansion programme for Dubai International, with an aim to boost its passenger capacity to 90 million by 2018, DDF pitched in by raising finance towards this project.

“We will probably be borrowing more money,” testified McLoughlin. “We have borrowed $1.7 billion in the last two years and these were given to the projects in the airport. Last year we borrowed $700 million and I think soon we will be raising a further $1 billion.”