'Kitchen' now gold mine

PUBLISHED : Monday, 27 November, 1995, 12:00am
UPDATED : Monday, 27 November, 1995, 12:00am

A DUTY-FREE outlet is normally not included in a book like Courvoisier's Best of the Best. But the Dubai Duty-Free (DDF) has built its reputation on such trump cards.


The achievement is more remarkable when one considers it started in a converted kitchen in the airport barely 12 years ago.


But, then, few outfits symbolise Dubai's spirit of enterprise more than its duty-free.


There is plenty more to come, says DDF's managing director Colm McLoughlin, the principal architect of the outlet's high-flier status.


'Dubai's new airport will have a fantastic new duty-free, all of 90,000 square feet, four times the size of the present one,' he said, adding that the project may require an additional US$3 million and take up to three years to complete.


Mr McLoughlin insisted the outlet would be something exciting and spectacular. However, for the moment, he was happy with the way things were progressing.


Daily retail sales on an average reach Dh.2 million (HK$4.2 million). Last year, total sales were US$144 million, up from US$132 million the previous year.


In the first seven months of 1995, sales were already showing a 20 per cent improvement over figures for 1994.


With six million passengers using Dubai International Airport annually and forecasters predicting eight million by 1997 and 11.5 million by the turn of the century, things can only improve.


Gold jewellery is the biggest seller, accounting for 18 per cent of total sales. Between January and June this year, 1,034.97 kilos of gold were sold.


Liquor and cigarettes and tobacco combined accounted for 16 per cent of total sales.


'A recent survey showed that Singapore Duty-Free has the lowest liquor prices in Asia. What we do is check prices of liquor in Singapore, then sell our stocks at 10 per cent 'less',' Mr McLoughlin said, explaining what made Dubai one of the best 'value-for-money' duty-free outlets in the world.


Set up at an initial cost of US$144 million, DDF appears to have paid for itself.


But Mr McLoughlin insists that the reason behind DDF is not money or profit.


'The objectives are altogether different,' he said.


Owned by the Government of Dubai, it has become an important element in the promotion of the emirate.


'We want to ensure the best value in the world by offering unparalleled service and range of merchandise.' DDF also contributes to boosting the local economy. It stocks around 60,000 product lines, '72 per cent of which are sourced locally, and provides direct employment to 580 people'.


Another factor which keeps the DDF adrenalin flowing is international awards and accolades.


In 1985, just 20 months after opening, the Dubai Duty-Free won the first of its major awards; the Frontier Marketing Award for Airport Duty-Free Operator of the Year.


Since then, DDF has walked away with more than 50 of the world's top tax-free and travel industry awards. Last January, Germany's Business Traveller voted it the 'World's Best Airport Duty-Free Shopping'.


Mr McLoughlin was awarded the 'Duty-Free Person of the Year' in 1986 and the 'Award for Excellence' by the Pak Emirates Forum in 1991.


He recalled how he had come to Dubai for a four-month period to set up the duty-free operations on behalf of the Duty-Free in Ireland and how he had been persuaded to stay. He has had no regrets. There were still challenges and goals to attain, he said.


The interesting thing had been DDF's association with the usual and the unusual, he said.


Take the Dubai Duty-Free Finest Surprise Promotion. Since its inception in 1989, it had delivered more than 345 luxury cars to winners around the world.


'It's made us the single biggest purchaser of BMW 850s, with 443 cars having been given away so far,' he said.


The car promotion, limited to 1,000 ticket holders and featuring a luxury car worth GBP86,000 (HK$1.05 million) being given away for a GBP90 (HK$1,098) ticket, had proved so durable and successful that one car a month, last year's average, was increased to two a week.