UAE. Dubai Duty Free has delivered a stunning +50% year-on-year increase in sales for the first four months of 2004, with April revenue rising +72% on the same month last year.
“We’re up to US$160 million in sales for the first four months, which is an increase of US$53 million on last year, so we’re thrilled,” managing director Colm McLoughlin told The Moodie Report.
What makes the figures even more impressive is that the January to April 2003 period was itself up +12% on 2002 (many retailer’s year-on-year percentage sales comparisons this year, especially during the first half, will be distorted by the negative impact of SARS and the Iraq war in 2003). Dubai Duty Free’s January-April 2004 figures represent an increase of 70% over the same period in 2002.
“Our penetration is doing very well and our number of transactions in April rose +41% over the previous April to 886,000,” said McLoughlin. “That’s an average of 29,000 transactions a day.”
McLoughlin attributed the increase to a combination of increased traffic (especially from Emirates) plus the retailer’s own intensive efforts to drive spending, including a lot of special offers, enhanced service, better staff training and new initiatives. He also praised the company’s new senior management team which he said had performed excellently following the recent retirements of Michel Paux and Brendan O’Shea.
McLoughlin highlighted the performance of the digital photography category, which posted a +97% increase in sales for the first four months. Digital cameras alone were up +130%. A dedicated Swarovski area has also proved a hit, with sales of the brand rising +87% over the same period.
One of the biggest successes has come with the extended cosmetics area – a key category for Dubai Duty Free. Sales are up +80% on last year, a performance McLoughlin described as “fantastic”.
He singled out Crème de la Mer, the cult skincare brand owned by the Estée Lauder Companies, for an outstanding performance. The line was launched in 2003, making Dubai Duty Free the first duty free door in the Middle East or Europe. “It already represents 8% of our cosmetics sales which is fantastic,” said McLoughlin. “Sales for the first four months reached AED 1.2 million (US$334,000), so it offers very high value.”
Other fine performances have been registered by watches, largely thanks to the new dedicated shop opened earlier this year. Sales are up +70% for the first four months over 2003. Sunglasses have also benefited from a revamping of the new shop built a year ago and sales for the period rose +99% year-on-year.
The retailer is also planning two big new initiatives in coming months. A spectacular Arabic themed “˜Gifts from Dubai’ store will open in a central area of the departures hall in June. And in a big step, the retailer is doubling its arrivals shop space within a revamped arrivals hall.
“This is very important to us,” said McLoughlin. “Arrivals are almost 8% of our sales but it’s always very busy and congested. I think sales per head are not as good as they should be.” He said the new store should open in four to five months time.
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