This week airport retail operator Dufry has unveiled its revamped duty free retail sites at Casablanca and Marrakesh airports. Competitor Lagardère has also revealed more about its plans to expand in Africa and has acquired a diplomatic duty free outlet in Nairobi, Kenya.
Dufry has operated in Morocco since 2002. Its Africa division is headquartered in Madrid (as part of Southern Europe and Africa) and operates in Cape Verde, Egypt, Algeria, Ghana, Côte d’Ivoire, Kenya, Morocco and Nigeria. The renovation of its stores in Morocco is part of airport operator Office National des Aéroports (ONDA) plan to upgrade its retail offering at its two flagship airports. Casablanca’s Mohammed V and Marrakesh’s Menara International airports handled 10m and 5m passengers respectively in 2018, making Casablanca’s airport the fourth busiest in Africa.
Dufry competes in Morocco with longtime incumbent International Duty Free Shops (IFDS), which previously held the monopoly for airport retail in the country and has operated since 1989. IFDS operates outlets in Casablanca, Marrakesh, Agadir, Tangiers, Rabat Salé, Oujda, Ourazate, Fes and Essaouira. In total, its airport retail outlets have a floorspace of 4,065sqm². In addition, it operates two non airport diplomatic outlets in Morrocco, totalling 750m². Crucially, in 2016, Dufry won the bid to operate the post immigration outlets, which attract the higher spend (especially for the single largest duty free sales category, tobacco).
Lagardère opened its Aelia Duty Free and Relay shops in 600m² of space at Libreville’s Leon Mba International Airport in May this year, and opened a foodservice outlet in September 2019. In September 2017 it won a 10 year contract for the 1,000m² duty free concession at Senegal’s new Blaise Diagne International Airport, outside Dakar. In both cases, the company has talked about the challenges of introducing more sophisticated duty free retailing. In September 2019, Lagardère acquired leading Belgian travel retailer International Duty Free, gaining a non-airport diplomatic duty free store in Nairobi.
International passenger volumes in Africa grew by 8.3% in H1 2019, while overall air passenger traffic grew by 7.1%. Within the next fifteen years, eight of the ten fastest-growing aviation markets will be in Africa. Several countries have recently opened new flagship international air terminals in a bid to position themselves as regional hubs and gateways to Africa. Most notably in January 2019, the new Addis Ababa Bole International Airport terminal opened (although all parts of it will only open later this year). It is the biggest airport aviation hub in Africa with the capacity for 22m passengers a year. Ethiopian Airlines as Africa’s largest carrier and has been talked about as a possible buyer for South African Airways, the second largest African carrier. In September 2019, the new international Terminal 3 at Julius Nyerere International Airport in Dar es Salaam, Tanzania, opened. In December 2017, Dakar’s $575m Blaise Diagne International Airport opened. In addition, several countries are expanding capacity at existing airports – notably in Kenya’s Jomo Kenyatta International Airport, the plan to build a second $160m, 4.8km runway, to accommodate larger jets such as the Airbus A380.
There is still a considerable amount of white space in airport travel retail in Africa: firstly in headline international airports in secondary markets such as Kinshasa’s N’Djili International Airport (capacity 1m passengers) or Uganda’s Entebbe International Airport(set to be completed in 2021, with an upgraded capacity of 3m passengers). But also in regional gateways that will primarily serve intra-African passengers as well as domestic traffic – notably in Nigeria, but also in Kenya and Ethiopia.
