Sales of Dubai Duty Free (DDF) are expected to be flat in 2015 compared to the previous year due to the weakening of certain currencies against the US dollar and fewer Chinese and Russian buyers, according to a top company executive.
DDF's total sales are expected to reach "just under Dh7 billion” in the current year, Colm McLoughlin, executive vice-chairman of DDF, told reporters at Dubai International Airport on Sunday.
"We think the drop in Russian traffic is costing us $50 million in sales this year … There has been a change in the trend of Chinese traffic. They were buying top brands and now they are buying lesser brands … The exchange rate versus the US dollar means that people buying in euros and sterling [find it] more expensive,” he said. The dirham is pegged to the dollar at 1 to 3.672 dollars. The dollar has increase significantly against the euro and slightly against the British sterling.
Asian travellers are the biggest spenders at DDF.
Total sales are likely to touch Dh7.3 billion in 2016 and grow to $3 billion by 2020, he said. DDF's average daily sales are between Dh17 million and Dh18 million.
The retailer will boost sales next year by offering discounts. It is currently negotiating with its suppliers "to offer passengers a continued discount,” McLoughlin said.
This year, around 78 million passengers are expected to pass through Dubai International and 88 million in 2016, he said.
The retailer's sales at Al Maktoum International are likely to reach Dh50 million in 2015, with daily sales of Dh140,000,
DDF continues to expand its retail operation. It will run 7,000 square metres of retail space in Dubai International's Concourse D, which is expected to open in February 2016. Concourse D will bring in new brands, such as Tiffany & Co., Burberry and Tory Burch.
"By 2022, we will have 80,000 square metres of retail space,” McLoughlin said.
DDF had a three-day sale starting on Friday to mark its 32nd anniversary, offering a 25 per cent discount on a range of items. It is expected to have generated around Dh188 million during the three-day period, according to McLoughlin.