Duty-free sales in Mideast airports go up
Airports, including those in the Middle East, are emerging as shopping destinations in their own rights with duty-free outlets racking up global sales of US $20.5 billion last year. And with air travel returning to pre-9/11, 2001 levels and tourism booming worldwide, travel retail industry analysts predict 2003 sales figures will be exceeded.
According to the recent annual survey by Swedish research house, Generation, airport business dominated distribution channels with a 50.3% market share, followed by other shops (downtown and border stores) with 32%, ferries and cruise lines with 10.6%, and airlines 7.1%, of the total global duty-free market.
The Middle East accounted for US$ 889.5 billion of total sales. The market share according to category was 44.9% for luxury goods, 22.2% for perfumes & cosmetics, 12.6% for wines & spirits, 11% for tobacco goods and 9.2% for confectionery and gourmet food.
Increasingly, global retailers are eyeing the region with growing interest, giving sales in the luxury goods, duty free and travel retail sectors a major boost, a fact that will be reflected in Middle East Exclusive 2004, which will be held at Dubai’s World Trade Centre from November 29 to December 1.
According to Justin Boutros, Managing Director of Channels Exhibitions, organisers of Middle East Exclusive, more than 150 exhibitors are forecast to participate in the show.
The Middle East travel retail market, in particular, is vibrant, thanks to the global average growth in international passenger traffic numbers. For the 12-months ending July 2004, from July 2003, the region saw 16.2% annual growth, compared to the world average of 10.2%.
Not surprisingly, the rises in passenger numbers are reflected in higher duty free sales. In the first half of the year Dubai Duty Free posted sales 43% up on the same period in 2003; Kuwait 29%; and Jordan a massive 77%. Duty free outlets in Bahrain and Oman also reported significant sales increases.
Kuwait Duty Free attributes its strong performance to maximising space per square metre and spend per head with the addition of a number of specialised product areas to encourage greater dwell time in the stores. The retailer’s ‘hot promotional points’ also played a significant role in lifting sales. Food category sales rose 19% due to multi-purchase and special offers; 1,000 cigarette packs were up by 300% and fragrance sales up 42% on 2003 figures.
The opening of a new 700 sq m duty free shop at the Jaber border crossing, at a cost of US $846,600 in July, contributed to Jordan Duty Free Shop’s (JDFS) exceptional performance.
JDFS has seen sales rise by 42% year-on-year. Meanwhile, expansion by Emirates helped to drive Dubai Duty Free’s growth in the first six months of 2004. (menareport.com)
© 2004 Mena Report (www.menareport.com)