UAE. Abu Dhabi Duty Free (ADDF) has returned its best-ever results in 20 years of trading during the first four months of 2004. And a surge in passenger numbers and commercial revenues has prompted an urgent rethink of the airport’s plans for a new terminal.
ADDF retail sales rose +32.7% on 2002 (2003 was depressed because of the Iraq war) during the January-April period.
All major categories have helped drive the overall growth. Fragrances & cosmetics shot up by +38.1% over 2002; liquor & tobacco rose +30.2%; food and chocolate increased +39.6%; gold rose +28.2% and electronics grew +35.7%
Managing director Mohamed Mounib said that any comparison against 2003 would be expected to be positive, “yet when we compare the performance of the first four months against the period 1999 to 2002 the figures are outstanding”.
Average spend has risen +13.3% and the sales growth is outpacing a +30% rise in passenger numbers. Mounib told The Moodie Report that the rapid evolution of El Etihad, the new national carrier of UAE, has driven the passenger increase. Largely as a result of Etihad’s ambitions, the forecast for 2004 is now 5.2 million passengers versus 4.3 million in 2003.
“El Etihad is causing enormous growth,” said Mounib. “We were planning a new terminal with capacity for six million passengers [current capacity is five million – Ed] but now we are looking at the possibility of additional replica terminals, each with additional capacity of 10 million passengers. We had not originally factored in the development of the airline to our plans.”
Mounib said a decision on the revamped plan is imminent – and he said the development would be given ‘fast track’ status to ensure opening by 2007.
Etihad currently operates three aircraft but this will rise to ten by year-end. It is expanding its route network fast to locations such as London, Munich, Geneva and Bangkok. “It’s great news for us and great news for tourism in Abu Dhabi,” said Mounib. “For us, it is a huge transformation which is bringing in a whole new sector of travellers who we’re working hard to satisfy.”
ADDF continues to focus on driving penetration, increasing conversion to purchase and raising average spend. “The increase in average spend of over US$4 (plus +13.3%) is particularly satisfying as it is a direct reflection of the commercial strategy that we are operating,” Mounib added.
The Summer Fiesta campaign – an evolution of the successful Frontier Award-winning Summer Adventure in 2003 – is also expected to drive the retailer’s business further across these core benchmarks. Mounib added: “The support that we are receiving from our supply partners has been outstanding and we are looking forward to successful summer trading period for all parties. Full details of the 2004 Summer Fiesta will be announced shortly.”
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