DUBAI // While deteriorating consumer confidence weighs heavily on the minds of retailers worldwide, a new report reveals that the global airport retail industry is set to grow by 11 per cent this year. Dubai is leading the charge, making it the fastest growing retail channel after the internet. According to The Global Airport Retailing Report compiled by Verdict Research of the UK, the Middle East has experienced the fastest growth in passenger airport traffic over the last five years in the world and will continue to boom through 2012. Retail sales in four GCC markets - the UAE, Qatar, Bahrain and Oman ? more than doubled, to US$1.2 billion (Dh4.4bn) from $461 million, and are forecast to double again and reach $2.5bn by 2012.
Global retail sales at airports are expected to be worth $30bn by the end of this year, according to the report. Increasing passenger numbers are a key driver, with the strong growth witnessed over the last five years set to continue."The key factors stimulating this growth are increased affluence, growing tourism, rapidly expanding airline networks and new routes, especially those of low cost carriers," said Nick Gladding, an analyst with Verdict Research and author of the report. "The increase in business travel as a result of globalisation is providing a further boost to airport retailers."
At the forefront of this growth is Dubai International Airport, which serves 205 destinations, more than London Heathrow, and is expected to receive 50 million passengers this year. Researchers attribute the rise in traffic to the new concourse and terminal, scheduled to open later this year, which will double the retail space, enabling it to accommodate an even broader range of jewellery, luxury and fashion items.
Revenues for Dubai Duty Free grew by 24 per cent last year to a record Dh3.18bn and are forecast to reach Dh3.67bn this year. Sales have already topped Dh1.9bn in the first half of this year, with perfumes earning Dh275.5m, up 34 per cent from a year ago, and gold sales reaching Dh227.7m. The report cites Dubai as having potential to be the world's largest international airport hub, particularly with the new $10bn Maktoum International Airport under construction adjacent to the existing airport, which will boost capacity by an additional 120 million passengers per year when it is fully operational in 2015.
Successful attempts by the UAE to promote itself as a tourism destination have led to an increase in flights from Europe and the eastern seaboard of North America. A new terminal is under construction at Abu Dhabi intended to enable it to compete more effectively with Dubai when it opens in 2010, while a third UAE airport at Ajman is due to open a year later. Officials at the Abu Dhabi Airport Company (ADAC) say passenger growth is increasing by 39 per cent per year, with footfall expected to reach 40 million by the end of this year. The airport is undergoing the first phase of a major expansion at a cost of US$68bn, with 20 different new retail brands expected as part of the new terminal.
"Abu Dhabi is very well-placed and the growth is partly driven by geography, as well as the launch of Etihad," a spokesman for the ADAC said. "It's all about higher traffic and creating a distinctive product and delivering world class retail in an environment where you have a constant flow of people passing through."
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