Benefitting from the widest industry experience

Dufry shares a common goal with the facility owners, which is to maximize returns on the available space and to create a highly innovative and attractive shopping experience for customers. Dufry’s extensive expertise in all technical and regulatory aspects, its retail know-how and its worldwide presence, are core competitive advantages, as is its comprehensive range of attractive retail concepts and shop formats to satisfy any need of a landlord in both duty-free and duty-paid environments. The in-depth understanding of customer profiles is key to best designing these retail concepts and to develop successful marketing initiatives. Moreover, in order to understand the latest trends in consumer behavior, Dufry regularly carries out detailed consumer research, thus generating insights that ultimately benefit landlords through increased sales and profitability of their commercial space.

Partnerships create value for both travel retailers and facility owners

The partnership between facility owners and retailers is one of the most important aspects of travel retail. Our many years of experience in the business show that the closer both parties work together and align their common goals, the higher the value generated. By joining forces, we can create more inviting and attractive commercial spaces that maximize spend from the passengers’ arrival at the airport until their boarding.

Dufry has a long-standing tradition of working together with landlords in different operations, be they large or small, in emerging or developed markets, in airports, or seaports, border shops or cruise lines. Recent examples of refurbishments and expansions of our shops confirm the value of coordinated strategies. Projects developed at the airports of Antalya, Bali, Cancun, Fort Lauderdale, Glasgow, Las Vegas, London Heathrow T3, and Malaga are a few examples of how Dufry and landlords can work together on the structuring of passenger flows, improving the appearance of commercial space and expanding retail offerings to considerably increase sales.

6 New Generation Stores opened.

Dufry’s New Generation Store – up and running

Dufry’s New Generation Store concept makes extensive use of digital technology to increase communication with passengers at the airport. The digital route allows Dufry to approach potential customers in an even more personalized way than ever before and to flexibly adapt in-store communication during the day to the changing nationalities and customer profiles, enhancing the communication’s impact. The sense of place of our shop designs, an important aspect for landlords, is also secured in the new concept, as the format provides for a high degree of customization. Dufry knows how to perfectly match these requirements with efficient retail concepts, to best serve travelers’ needs and to generate value for landlords and Dufry alike. New Generation Stores have so far been opened in Madrid, Melbourne, Cancun T3 and T4, and Zurich as well as at London Heathrow T3.

Deployment of our digital strategy improves conversion and boosts the visibility of operations

In 2018, Dufry accelerated the deployment of its digital strategy that essentially aims at converting more travelers into customers, thus driving sales and ultimately benefitting our landlords. Besides the New Generation Stores, services such as Reserve & Collect and above all the loyalty program RED by Dufry, promote our operations online on a world-wide scale, through their global span and reaching travelers across the world. This gives airports and their retail offer additional visibility and exposure, thus promoting them as attractive shopping locations. For a more detailed description of our digital strategy and the 2018 achievements, please also refer to our strategy.

Dufry has a long-term concession portfolio.

Successful contract extensions secure future business

In travel retail, concession contracts are the key business driver for retail operators, as they provide the right to sell their products at a given operation. In 2018, Dufry continued to successfully win new contracts and to renew existing concession contracts, some of them well before the previous expiry date, thus extending the remaining average lifetime of its portfolio, which is 7 years. Within our concession portfolio, 25 % of our contracts have a remaining life-time of one to two years; 23% three to five years; another 30% between six and nine years, and the final 22% have a remaining duration of ten years or more. On average, Dufry renews existing contracts that generate between 8% to 10% of our sales every year, as well as adding new contracts,

New shops added to our first-class concession portfolio

In 2018, Dufry opened and expanded 192 new shops adding 26,800 m2 of retail space across all divisions. At December 31, 2018, the entire concession portfolio of the group included retail space of over 453,000 m2.

Dufry’s concession portfolio is highly diversified and well balanced across emerging and mature markets on all six continents. This considerably reduces risks of being exposed to single markets and operations; the largest concession only accounts for approximately 7% of turnover; while the 10 biggest concessions represent less than 35 %.

Focusing on investment returns

Dufry follows a disciplined approach on evaluating new projects and opportunities. They are analyzed individually on a commercial and financial basis. The many aspects of a project are put together including development potential and analyzing initial investment requirements, as well as the expected development of passenger numbers and profile perspectives. Through a strict evaluation of these criteria and our disciplined approach to returns, we ensure that our concession portfolio remains of the highest quality and that each concession offers attractive returns for the Group. This methodology is applied for all projects, irrespective whether we participate in a tender process, engage in direct negotiations with airport authorities or perform acquisitions.

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