2021 started well for Dubai Duty Free, which returned to profitability from January and in each month since. Sales year-to-date (January to 22…
2021 started well for Dubai Duty Free, which returned to profitability from January and in each month since. Sales year-to-date (January to 22 October 2021) have reached US$670 million, which is 27% higher than the same period last year.
“This year we are expecting our sales to be up on last year,” explained Colm McLoughlin, Executive Vice Chairman & CEO, Dubai Duty Free. “In 2020 we had US$680 million and this year we are certainly going to break US$700 million, so the outlook is positive.”
From a category perspective, very little has changed in terms of purchasing trends. “We have seen the category split remain the same in recent months with Perfumes as the top category, followed by Liquor, Cigarettes & Tobacco, Electronics and Gold,” said McLoughlin.
Sales of Perfumes reached US$126 million and accounted for 19% of total sales. Liquor in second place recorded sales of US$117 million and accounted for 17%, Cigarettes & Tobacco had US$68 million in sales and contributed 10% towards total revenue. Electronics came in fourth with sales amounting to US$56 million and accounted for 8% while Gold came in fifth with sales of US$51 million and contributed 8% to total revenue.
As a result of the decision by the UAE Government, Dubai Duty Free’s retail operations across Dubai International and Al Maktoum International airports closed from 25 March 2020 for three months. Yet, despite the challenges and the drop in revenue, it managed to transform and reinvent the business to maximise performance and continued to achieve a number of highlights during the year.
Colm McLoughlin, Executive Vice Chairman & CEO, Dubai Duty Free: “This year we are expecting our sales to be up on last year. In 2020 we had US$680 million and this year we are certainly going to break US$700 million, so the outlook is positive.”
“Dubai Duty Free came together as a team to respond positively to the rapidly emerging crisis,” said McLoughlin. “During these unprecedented times, we implemented and introduced initiatives and quickly responded to the situation by proposing an alternate retail channel to appeal to local customers – and the Home Delivery Specials service within the UAE was launched in June 2020. So far, our sales for the Home Delivery since we launched it in June 2020 have now reached over US$13 million with 198,097 units of merchandise sold.”
When it came to re-opening, and in keeping with the UAE authorities’ guidelines, Dubai Duty Free ensured that all appropriate preventative measures were in place for the safety of staff and customers.
“We also adapted our marketing strategy and retained a marketing budget, although reduced, in order to reach a global audience and enhance our reputation as well as reaching out more directly to our own community,” McLoughlin commented. “From pioneering promotions, including the world-famous Finest Surprise Luxury car draw, to organising world-class events such as the US$3.6 million Dubai Duty Free Tennis Championships, the Dubai Duty Free Irish Derby and the Dubai Duty Free Irish Open. For our employees, we implemented and introduced initiatives to ensure their safety and well-being. We coordinated with the Ministry of Health & Prevention (MOHAP) and Dubai Health Authority (DHA) to have them vaccinated. To date, a total of 2,891 Dubai Duty Free staff have been fully vaccinated which is almost 98% of our total workforce. So far, no more active COVID-19 case and zero fatalities.”
Overall, despite the enormous challenges of 2020, which included a dramatic decline in passenger numbers, Dubai Duty Free gradually and safely re-opened 65% of its retail operation and returned to profitability from January 2021.
Increased digital engagement
“Dubai Duty Free has just opened the Christian Dior store in Concourse B of Dubai International Airport, and it is gorgeous, both Cartier and Christian Dior stores cover 100sqm, with the Cartier store scheduled to open in January next year,” said McLoughlin. “In the meantime, Louis Vuitton will occupy 254sqm of space in Concourse B and is scheduled to open in December. It is a very exciting development for us and will energise our fashion offer further.”
Dubai Duty Free has just opened the Christian Dior store in Concourse B of Dubai International Airport.
Meanwhile, Dubai Duty Free has increased its digital engagement with customers over the past 18 months, including the launch of its Home Delivery Service for UAE residents and through the promotional engagement for the Millennium Millionaire and Finest Surprise promotions.
“Our customers welcome the engagement and appreciate our efforts to keep in touch when people could not travel,” McLoughlin explained. “Total online sales now account for 6% of Dubai Duty Free sales, which in 2020 generated a total of US$44.5 million, an indicator of the importance of the digital side of the business.”
McLoughlin recognised as one of 100 Images RetailME ICONS
Colm McLoughlin, Executive Vice Chairman & CEO, Dubai Duty Free, was recently recognised as one of the 100 Images RetailME ICONS.
McLoughlin was recently recognised as one of the 100 Images RetailME ICONS. “It was an honour to be named one of the 100 ICONS in the retail industry in the MENA region,” he said. “I’m delighted that Images RetailME has taken the initiative to put together this comprehensive list which acknowledges the retail industry’s contributions to the wider economy. I do get a lot of credit at times, and I am always very mindful of thanking the Dubai Duty Free team and those who work behind the scenes at Dubai Duty Free to ensure that our operation runs 24 hours a day and 7 days a week. Of course, I am very appreciative of my own boss, H.H. Sheikh Ahmed bin Saeed Al Maktoum, who is an absolute superstar and I feel very honoured to have worked closely with him over the years.”
Promoting Dubai as a leading sports, business and leisure destination
Sinead El Sibai, Senior Vice President Marketing, Dubai Duty Free, presents the trophy to the 2021 Dubai Duty Free Irish Open Winner, Lucas Herbert.
Dubai Duty Free is renowned for its sports sponsorships. Despite the difficulties of organising sporting events during a global pandemic, it made the decision to proceed with its major events which would ultimately provide TV coverage and therefore brand exposure worldwide and enable sporting bodies to provide their athletes with playing opportunities.
A classic example of this is the Dubai Duty Free Tennis Championships, which is owned and organised by Dubai Duty Free. The 2021 Championships was held behind closed doors as per the guidelines by the UAE authorities from 7-20 March and required massive health and safety protocols to be put in place by Dubai Duty Free for the tournament to go ahead. “The tournament was a great success, was watched by a potential one billion people and generated US$1.5 billion worth of TV coverage, of which US$586.7 million was for the Dubai Duty Free brand alone,” McLoughlin commented. “The WTA week was won by two-time Grand Slam winner and former World No.1 Garbiñe Muguruza, while Wild Card entrant, Aslan Karatsev, won his very first ATP title.”
Dubai Duty Free also went ahead with its horse racing sponsorship, both in the UK and Ireland. Dubai Duty Free returned to Newbury for the start of the flat race season in the UK with the Dubai Duty Free Spring Trials Weekend that took place at the historic Newbury Racecourse on 16 and 18 April.
“26 June saw the 14th running of the prestigious Dubai Duty Free Irish Derby at The Curragh Racecourse which offered a rich purse of €1 million,” said McLoughlin. “The race meeting marked the return of spectators to sport in Ireland and while the numbers are limited at this time for safety reasons, Dubai Duty Free was delighted to be part of the gradual return to normalcy. The event was won by Godolphin owned Hurricane Lane, trained by Charlie Appleby.”
Meanwhile, the 7th Dubai Duty Free Irish Open took place at Mount Juliet Estate and Golf Club from 1-4 July. The 2021 tournament was one of the first test events proceeding with spectators as agreed by the Irish Government, although limited to smaller numbers than previous years, the event was broadcast to over 350 million homes worldwide. The 2021 tournament with a prize fund of €3 million was won by Australian golfer Lucas Herbert, who claimed his second European Tour title.
“Through these high-profile sponsorships and events, Dubai Duty Free was able to promote the city of Dubai as a leading sports, business and leisure destination,” said McLoughlin.
“Offering great customer service and the latest products”
Looking ahead, Dubai Duty Free is excited and looking forward to opening the luxury boutiques mentioned earlier. “We expect to have a lot of interested customers, and it will be fantastic once the Asian market opens up again,” McLoughlin explained. “We will also continue to drive sales in the current operation, ensuring that we are offering great customer service and have the latest products both in store and online.”
Dubai Duty Free will also continue to enhance its Home Delivery service, which has given the operation incremental income since the launch in June 2020. “Likewise, we will continue promoting our product offers and sales through digital channels,” McLoughlin noted. “We are also looking forward to opening those retail areas that are still closed including Concourse A and Al Maktoum International Airport.”
Expo 2020 has started (1 October to 31 March 2022) and Dubai Duty Free is hugely optimistic about the impact that Dubai Expo 2020 will have on the UAE. The six-month event, which will also take place when the UAE marks its 50th anniversary in December, is expected to attract an additional 18 million visitors, many of whom will travel through Dubai International Airport.
Meanwhile, Expo 2020 has started (1 October to 31 March 2022) and Dubai Duty Free is hugely optimistic about the impact that Dubai Expo 2020 will have on the UAE. The six-month event, which will also take place when the UAE marks its 50th anniversary in December, is expected to attract an additional 18 million visitors, many of whom will travel through Dubai International Airport.
“This of course will lead to our 38th anniversary in December, and as a tradition, the Dubai Duty Free anniversary promotion is a highly-anticipated event with people choosing to travel on the days (usually over three days) when we offer a 25% discount on a wide range of products,” McLoughlin added. “While shopping with us may look a little different right now, we are as committed as ever to marking this anniversary celebration and to thank our customers, whether in person or online, for continuing to shop with us.”
