Airport Retailing

DUBAI DUTY FREE – An Overview

Established in the year 1983, Dubai Duty Free is the single largest airport retail operation in the world, ahead of London Heathrow. The airport retailer was one of the first Dubai Government organizations to actively promote Dubai as a leisure destination. Today Dubai Duty Free has become one of the most prestigious brands in the industry due to its 5 point strategy of providing high quality goods, wide range of products, value for money, convenient shopping and first class customer and after sales service. From its humble first year turnover of US$ 20 million, Dubai Duty Free announced its first quarter sales of US$343 million in the year 2011. Much of this success can be attributed to its first class management and the guidance of Executive Vice-Chairman Mr. Colm McLoughlin and his competent staff which started out as 100 but today has reached nearly 4,400 employees.

HOW IT ALL BEGAN

The story behind this successful organization started early in 1983. Director General of Dubai’s Department of Civil Aviation, Mohi-din Binhendi was planning a new retail sales area for Dubai International Airport. The Director General was impressed by the operations of Michael Geoghagan, manager of Irish airports operator Aer Rianta that ran duty-free operations at Shannon airport, in Ireland. Mr. Colm McLoughlin and Shannon airport finance manager Michael Hanrahan were invited to Dubai in July 1983 for exploratory talks. With their Irish negotiation skills Aer Rianta managed to secure a six month contract to get Dubai Duty Free up and running before the end of the year, with an initial funding of 3 million AED (US$ 800,000) from the Government of Dubai. By September, a ten man team from Aer Rianta was in place in Dubai. Their brief was to ‘develop the best-every duty free shops in the industry’. Of that original 10, both Colm McLoughlin and George Horan have been with Dubai Duty Free ever since.

DEVELOPMENT STAGES 

The following stages describe the growth and expansion of the Dubai Duty free over the span of 28 years. From its inception in the year 1983 till present year 2011, Dubai Duty Free has had a fascinating journey and the following sections will capture all the events that stood out in the past 28 years.

1. Stage 1 (1983 – 1991) - The Empire Forms

The eight man team dispatched from Aer Rianta had a very difficult task in their hand – developing the best duty free shops in the industry in only four months’ time. The inauguration of Dubai Duty Free was scheduled on the 20th of December 1983 and a host of complex tasks had to be undertaken. However, they were able to set up the new duty free area, comprising 24 different shops, write procedural manuals for every aspect of the complex retail operation, establish security procedures with police and custom authorities, arrange for a storage warehouse and acquire delivery trucks and fly in staff from India and Philippines. Most daunting of all was the task of sourcing and buying the thousands of different items needed to stock the duty free shelves (around 70% of the items for sale had been bought locally). The design and fitting of the new facility itself was done by renowned British companies: Fitch and Co, and Ruppel and Co, respectively. On ‘the day’, as the clock struck 7, Dubai Duty Free opened for business for the very first time. A few minutes later, a bottle of whiskey and a carton of cigarettes became the first ever purchases in this brand new world class shopper’s haven.