UAE. Dubai Duty Free recorded a 14% jump in sales growth in 2010 over the previous year with turnover reaching a record AED4.66 billion last year.
This largest single retail operation in the world operating the retail area at Dubai International Airport, is now looking at sales reaching around US$1.35 billion in 2011 which is 10% ahead of last year.
In an exclusive interview, Salah Tahlak, Dubai Duty Free’s Director of Corporate Communications, discusses how being a Strategic Partner of Dubai Events and Promotions Establishment – an agency of Dubai Department of Economic Development and organizers of Dubai Shopping Festival, Dubai Summer Surprises and Eid in Dubai – presents a perfect opportunity for Dubai Duty Free to promote its brand further.
Q- Dubai Duty Free partnership with DEPE takes a new enhanced form this year by being a strategic partner for all the festivals organized by DEPE in 2011. What are the reasons behind your decision for this support?
A- The main reason behind our decision to support DEPE is that we believe this is a good initiative and it makes strategic sense for Dubai Duty Free to endorse the combined events in this way. For our part, Dubai Duty Free is heavily involved in the promotion of Dubai as a leading sports, business and leisure destination and as a result we are involved in sponsorship of major events both at home and overseas. The DEPE events are perfect opportunities for us to promote our brand further.
Q- In your opinion, what sort of impact does the festival industry has on the retail sector in general, especially with events such as the Dubai Shopping Festival this year?
A- Any event that brings visitors to Dubai has a positive impact on the retail sector and the likes of the Dubai Shopping Festival definitely has made its mark as a major attraction for regional and international visitors. Dubai’s reputation as a retail destination is well deserved and from the very early days of Dubai Duty Free, our marketing campaigns positioned Dubai as a shopping destination. Our strapline back in the 1980’s was “Fly Buy Dubai” and it is incredible to think that people even back then re-routed their flights so that they could transit through Dubai and shop at the Dubai Duty Free.
Of course, now there are many organizations such as DEPE, Emirates, Dubai Golf, who are also doing a great job in continuing to promote all that Dubai has to offer the global traveller and it is great that we are a part of that.
Q-How has the event helped boost your sales this year compared to last year? Could you support your answer with some statistics?
A- At present, sales at Dubai Duty Free are running almost 14% ahead of last year. In 2010 our sales reached US$1.27 billion, which was 14% ahead of the previous year and are very happy that the upward trend has continued.
Q- What are your sales target for this year? DDF hit record sales of US$1.27 billion in 2010. Do you plan on exceeding that number in 2011? If so, by what per cent?
A- We are looking at sales reaching around US$1.35 billion in 2011 which is about 10% ahead of last year. We are looking at increasing both the penetration levels, which are currently around 50% (which is very good when compared to the rest of the industry) and increasing the average spend for both departing passengers, which is currently around US$47 and arriving passengers, which is around US$10. In order to achieve this we are looking at several aspects of our business including our promotions, our product range, positioning and marketing drives.
Q- How soon do you see DDF attaining the top slot in the global airports’ duty free list?
A- Dubai Duty Free is actually the largest single retail operation in the world based on sales figures over the past few years. This has been independently researched and confirmed by Generation Research, the industry specialists who monitor sales among all duty free retailers in the world.
We are obviously very pleased with this position and based on our development plans in the coming years, including the opening of Concourse 3 at Dubai International Airport next year, we hope to retain this for some years to come. At present Dubai Duty Free operates around 18,000 square metres of retail space at Dubai International Airport and that will grow to around 26,000 square metres next year once Concourse 3 has opened.
Q- What are some of the biggest challenges faced by DDF currently? How do you plan to tackle them?
A- The global retail industry has of course been impacted by the global recession, but thankfully Dubai Duty Free has continued to show an increase in sales both in 2009, when sales rose by almost 4% and in 2010 when sales returned to a double digit-growth of 14%.
The challenge continues to be to try and convince shoppers to spend, and the return of consumer confidence is obviously the goal of all retailers. We are definitely seeing this at Dubai Duty Free where sales across all sectors, including the high end luxury goods have rebounded and seen double digit growth. We are also seeing positive sales growth amongst specific nationalities and the Chinese travellers in particular have been a great boost to the luxury sector.
We are looking forward to another positive year. Our staffing levels are currently 4,000 and we will continue to recruit in line with our expansion needs.