Dubai Duty Free surpasses $1 billion in sales during the first half of the year, triggering the question: What lies ahead for the flourishing retail operation?
Dubai, United Arab Emirates - Dubai Duty Free (DDF), the iconic retail destination at Dubai International Airport (DXB), is gearing up for a prosperous second half of 2025. The retailer experienced robust growth in April, May, and the first half of June, setting a positive tone for the upcoming months.
The optimism is further bolstered by several factors. Firstly, preparations are underway for a busy summer, a period that traditionally boosts travel and spending. The expansion of luxury retail presence, including new boutiques from luxury brands such as Louis Vuitton, Chanel, and Cartier, is expected to enhance sales. The first half of 2025 saw strong performance in luxury goods, a trend likely to continue.
While geopolitical tensions can impact global travel, Dubai’s strategic position as a major travel hub and its historical resilience in such scenarios suggest that it might maintain its appeal to travelers. The state-owned operator, Dubai Airports, mentioned that some delays and cancellations occurred in June due to the wider regional situation, but Dubai has shown resilience in the past.
The first half of 2025 showed a 5.34% year-on-year increase, with strong sales in categories like perfumes, confectionery, and gold. This momentum is expected to continue, driven by increased passenger spending and new retail offerings. In fact, Ramesh Cidambi, DDF's managing director, stated that the spend per passenger is likely to be better than June 2024.
Dubai International Airport welcomed a total of 92.3 million passengers in 2024, the highest annual traffic in its history. Daily volumes during the summer season are forecast to average over 265,000 passengers at DXB. Meanwhile, Al Maktoum International Airport, also known as Dubai World Central, primarily serves cargo, charter, seasonal flights, private aviation, and low-cost carriers.
Dubai Airports is investing $35 billion into expanding Al Maktoum International Airport, which is expected to become a bigger successor to Dubai International Airport. The projected capacity of Al Maktoum International Airport on final completion is 260 million passengers annually. DDF will play a central role in shaping the retail landscape of Al Maktoum International Airport, the mega-hub.
In 2024, over 700,000 of the 1 million passengers processed at Al Maktoum International Airport were Russians, who are traditional high spenders in duty-free. Around 3.4 million passengers are expected to travel through DXB between June 27 and July 9.
The confectionery category, particularly Dubai chocolate, saw a significant boost with 2.5 million bars sold, accounting for 40% of the category's share. Three arrivals shops underwent successful renovation in the first half of the year, contributing to a combined growth of 6.3% in May. All key passenger regions showed positive sales during the period, with Europe up 16.9%, Russia up 4.4%, the Middle East up 8.2%, and the Indian-sub continent trailing at 1%.
While specific projected sales figures for Dubai Duty Free in the second half of 2025 are not detailed in the available information, the factors mentioned suggest that Dubai Duty Free is well-positioned for continued growth. However, Cidambi cautioned that while summer volumes may rise, spending might not always match, as a family of four may not spend the same as four individuals.
DDF added approximately $57 million to last year's half-year result, primarily due to a surge in travel during the Eid holidays and early summer getaways. Despite the challenges posed by the ongoing regional situation, Dubai Duty Free remains optimistic about its future.
- The luxury retail expansion at Dubai Airport, including new boutiques from brands like Louis Vuitton,Chanel, and Cartier, coupled with the strong performance in luxury goods, suggests a continued growth trend for Dubai Duty Free in the lifestyle sector.
- As Dubai World Central (Al Maktouum International Airport) prepares to become a bigger successor to Dubai International Airport, Dubai Duty Free is expected to play a significant role in shaping the retail landscape of this mega-hub, potentially attracting high spenders from countries like Russia during key travel periods.
