Kuwait Duty Free forecasts 26% growth in sales

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The operator projects revenues of $34m in 2004 as it bounces back strongly from the effects of war in Iraq

Kuwait Airport Duty Free Shops is projecting sales of $34m this year, a rise of 26% on last year's performance.

In 2003 the operator recorded sales of $27m, 11% more than in 2002. This was particularly impressive given the effects of the Iraq war on neighbouring Kuwait. Sales suffered badly during the US-led conflict in March and April 2003, during which Kuwait was the centre of troop deployment and movement into Iraq.

For the rolling 12-month period ended March 2004, turnover peaked at $29m (an increase of 11% over the year to March 2003).

The company has grown its annual turnover from just $9m in 1994 to its current level, an increase of more than 188%. Spend per head increased by 126% and penetration by 109% over the same period.

The company said: "Those results were generated without the luxury of being able to sell liquor as Kuwait is a conservative Muslim country. Unlike many of its regional competitors, Kuwait Duty Free is not permitted to operate an arrivals shop or a "pick up on arrival" service. Additionally, it is unable to offer the lucrative car draws and cash raffles associated with other retailers in the region, due to government regulations."

These activities would add 40% to its income if permitted, Kuwait Duty Free said.

For the period January-June 2004, overall sales rose by 29%. This year, the retailer's new "hot promotional points" at the entrance to its stores have aided sales. These promote multi-pack offers, gifts with purchase and new launches. In the food category, sales have risen by almost 19% due to multi-purchase and special offers. Packs of 1000 cigarettes are up by 300% with some references.

In the first six months, sales of fragrances are above last year by 42%, while gold sales have risen 35%, cigarettes have risen 17%, electronics by 36% and watches by 30%.