Dubai Duty Free: The Perfect Retail Model

Dubai Duty Free is one of the world’s largest single operating travel retailers. Since the start of the festival or the initiation of the whole program, the Dubai Duty free (DDf) has expanded massively as a travel retailer as well as an event in itself. The most astounding feat that the entity has managed to achieve would be the ever increasing sales rates. Since the commencement of the Dubai Duty Free in 1983, the number of passengers travelling through Dubai International Airport (DXB) have increased by 10% on an annual basis whereas the sales amount generated from travelers have had an increase of 17.2% which is nearly twice that of the increase in passengers. Dubai Duty Free’s total sales stand for 50 % of the Duty Free sales made in Middle East and North Africa. These successes have seen Dubai Duty Free be included in this year GFCC best practice report.

DDF: A Lucrative Business Model

The Dubai Duty Free has worked to go beyond what is simply considered an established travel retail model. Along with an amazing array of offering they have equipped the terminals with good customer service. A part of Dubai Duty Free’s mission statement includes “to provide customers with a first class customer service”. The ever competitive nature made them work beyond just sales growth; such is the opinion of Abdullah Lootah the Secretary General of Emirates Competitive Council. The support and encouragement from the Emirates government has made DDF a leading operator on an international level.

Synchronizing the Efforts of DDF & DXB

Recently though there have been certain question marks raised over Dubai Duty Free’s devotion towards the state itself. Recently the Dubai International Airport (DXB) has been lined up for another expansion project that is said to cost around DH 28 billion. According to one of the representatives from Dubai International Airport when they initially decided to set up DDF in 2003 no banks were willing to loan $ 3 million, whereas only a couple of months ago a consortium of different banks helped raise around $ 1.7 billion. So in order to be able to carry out the new Concourse project efficiently and without complications it is necessary to have the backing DDF. However, the Vice President of the organization has informed the media that it will be parting ways with the finances of the new terminal. This may have come as a shock to most since the retail model itself has benefitted from the growth in the amount of passengers that travel through the airport. Statistics show that nearly 1 of every 2 passengers or travelers that pass through the terminal are bound to make a purchase from the DDF thanks to their amazing customer services on a retail level. Often times the minimum amount that these passengers shop for is around $49, which is one of the highest in the industry. The sales targets that were set out for DDF have been comfortably reached yet there is no confirmed reports linking them with the mega project that has been undertaken by Dubai International Airport.