"Airports emerge as shopping destinations"

Sunday, October 17, 2004

Airports emerge as shopping destinations
United Arab Emirates - AME Info 


Airports are emerging as shopping destinations in their own rights with
duty-free outlets racking up global sales of USD20.5 billion last year.

And with air travel returning to pre-9/11, 2001 levels and tourism booming
worldwide, travel retail industry analysts confidently 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. 

'Middle East Exclusive is one of the most important and exciting exhibitions
we have ever staged. As a dedicated business to business event it allows
companies, who have quality products of the type offered within duty free
outlets, to penetrate new markets, support their products and business
partners and network with buyers and decision makers responsible for the
lucrative and developing Middle East, African, Asian Subcontinent and
southern CIS markets.' 

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. 

Middle East Exclusive already has exhibitors from 17 countries coming with
leading brand names from the jewellery, fragrance, drinks, tobacco, fashion,
consumer electronics and fine foods industries. 

'I believe the Middle East duty free market is the most dynamic in the
world, setting new standards of retail excellence and this will only
continue to improve and evolve at key high profile airports in the region,'
said Alan Brennan, Regional Sales Manager, Nestle. 

'Sustained growth is forecast with destinations, such as Dubai, becoming a
major tourism hot spot and with other countries looking to develop their
indigenous tourism industries. 

'This can only be good news for the duty free industry as more passengers
will pass through airports and retailers are constantly seeking to increase
shop penetration and conversion,' Brennan added. 

The key role being played by new airlines and regenerated airports in
driving strong growth in the Middle East duty free and luxury goods market
is also acknowledged by Cadbury Schweppes chief, Steve Brock. 

'The expansion of both airlines and airports is bringing in more travellers
and means the Middle East is now challenging Singapore as the stopping off
point between Australasia and Europe. 

'While the Middle East provides us with a small percentage of our global
sales now, it is a crucial market for all confectionery companies in the
future.' 

Meanwhile, buyers from over 49 countries in five continents have
pre-registered for the show with its website www.middleeastexclusive.com
registering a significant increase in traffic. The show last year attracted
1,730 trade visitors from 79 countries. 

Middle East Exclusive is held under the patronage of Sheikh Ahmed bin Saeed
Al Maktoum, President of the Department of Civil Aviation, Dubai and
Chairman of Emirates Group and supported by Dubai Duty Free and the Middle
East Duty Free Association. 

It is being held in association with the Dubai Duty Free Golf World Cup
which runs from November 25 - 26 and the MEDFA Duty Free Conference from
November 27 to 28.


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