TBY talks to Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free, on expanding its core operations and minimizing wastage.

Colm McLoughlin
Born in 1943, Colm McLoughlin began his retailing career in the 1960s, working at Woolworths, before moving back to Ireland to work for Shannon Duty Free. In 1983, he was invited by the government of Dubai to set up Dubai Duty Free.

How do all of Dubai Duty Free's businesses complement each other and its core operations?

When we started Dubai Duty Free in 1983, our brief from HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, was that we would help promote Dubai and its tourism industry. Around that time the Department of Civil Aviation had built a leisure club; it was called the Aviation Club, and Dubai Duty Free was asked to manage it. We identified sport as a good route through which to promote Dubai, and we founded our tennis tournament and after that grew a number of other things. We built a 5,000 seat Dubai Duty Free Tennis Stadium, and we created The Irish Village and on the other a group of around 10 restaurants known as The Century Village. Finally, we decided to build a hotel, the Jumeirah Creekside Hotel, which last year had an occupancy rate of 87%. The Irish Village was named The Best Irish Pub in the World outside of Ireland in 2016. All of our businesses complement each other, and it is all part and parcel of Dubai Duty Free Leisure Group. We now have a second Irish Village, built on the new Dubai Parks and Resorts, where Bollywood, Riverland, Motiongate, and Legoland are, in addition to a new outlet mall.

How has Dubai Duty Free implemented new technology, particularly in logistics?

We have embraced new technology, for example our distribution center, which covers an area of 27,000sqm, is 95% automated. At the touch of a button, our staff in duty free know what stock we have at any given time. In our warehouse and distribution center, our staff activate the orders and a crane locates the individual items and delivers it directly to the operator. Without this level of technology we would not be able to effectively manage our business; last year we delivered 147,000 palettes of merchandise to our retail operations, all of which goes through police x-rays. This helped us turnover a total USD1.85 billion of business, and sold 74 million pieces of merchandise. We are also using technology to speed up the purchasing process with systems such as Samsung Pay. Technology is helping to make our country paperless, effective, successful, happy, and green.

In terms of passenger numbers handled by the airport and your sales, how do arrival and departure passengers compare to transit passengers?

Arrivals are 13% of our total business and the departing business is 87%. A large number of Emirates passengers are business transfers and would be included in the latter. The average spend of departing passengers is around USD36, which is good compared to many airports around the world.

How will the expansion and capacity for a further 40 million passengers develop your business?

At the moment we have 38,000sqm of retail space in operation. Of that, 2,500 is at Al Maktoum International Airport, with a capacity of 5 million passengers per year. By the end of this year it will be 26 million. Dubai Duty Free will have 4,000sqm of retail space by the end of this year and if you go forward to 2025 there will be a new terminal building at Al Maktoum International, two new concourses, a six-track rail system underground for passenger movements, three runways in operation, and the capacity of the airport will have risen to 135 million and Dubai Duty Free will have 80,000sqm of retail space. Around 72% of everything we buy and sell in duty free is bought locally from the agents, so we are contributing largely to the economy in Dubai. We are expecting that our business by 2020 will be USD3 billion a year in sales; it was USD1.85 billion last year. At the moment we have over 5,900 staff. By then, we will have 9,000.