Iraq Duty Free’s number one category is fragrances, with the retailer eyeing growth across its beauty portfolio
Making the most of its newly expanded store portfolio – now across both departures and arrivals, as well as a new downtown location – has been top of the agenda for Iraq Duty Free, which tells Global Travel Retail Magazine that sales to date in 2023 have already “far exceeded expectations.”
Iraq Duty Free is the long-term travel retail operator in the Republic of Iraq, with the agreement in place until 2039, which means the well-established travel retailer with stores at Baghdad, Basra and Sulaimaniyah international airports, has the exclusive rights to run and manage all duty free business within any of the airports that are managed by the Iraqi Civil Aviation Authority (ICAA). Iraq Duty Free’s main retail operation is at Baghdad’s International Airport passenger terminal that comprises three concourses: Nineveh, Babylon and Samara, which are all names of ancient cities in Iraq. Baghdad Aiport is served by Al Arabiya, Fly Baghdad and Iranian airlines.
Over the last few years, Iraq Duty Free has been steadily renovating all of its stores for international and domestic travelers and says it wants to raise standards to match and rival nearby travel retail destinations.
The ICCA opened its third and last terminal, Samara, at Baghdad in December 2022 in order to "take the strain off" Baghdad’s other international terminal. As a result, Iraq Duty Free has benefitted from the increase in international passenger numbers and the opportunity to enlarge its retail offer within the new terminal. Iraq Duty Free now manages 510 square meters of departures retail space, as well as 92 square meters of arrivals space.
“We have been focused on upgrading our retail spaces with new design and fixtures. In terms of investment we have renovated all our existing shops to international standards with the exception of one still to come, which is in the departures area for the international concourse, known as Babylon and is due to open in the last quarter of 2023,” says an Iraq Duty Free spokesperson.
H1 is on track with a positive sales uplift for Q1 of 4% higher than 2022, according to the company. “Going into summer months and the high season for travel in Iraq, we are confident to reach our goal of surpassing the 7.5% increase in sales vs. 2019 that we reported for 2022.
“The expansion of the new Samara terminal came as a necessity to take a load off the existing two terminals and to divert the low budget airlines to this terminal. We have not yet reached the full potential of the terminal in terms of passenger numbers, but we will be moving towards that goal especially with the high traffic expectation over the summer.”
Spirits is Iraq Duty Free’s second most popular category and is growing year-on-year
Further bolstering Iraq Duty Free’s store portfolio are new boutiques at Kirkuk International Airport in northern Iraq where the shops have been completed and the retailer awaits an official opening date, due later this year.
Iraq Duty Free says its customer profile is becoming more diverse. “Our airport passengers are still dominated by Iraqis representing around 70% of travelers. Expats represent around 30% of our visitors, from various countries with a high number of Chinese that are working in the oil and gas industry in the region.”
Iraq Duty Free’s category mix is comprised of many major international brands across beauty, fragrances, cosmetics, wines & spirits, confectioney and fashion accessories such as sunglasses. “Our number one category is still perfumes, followed by liquor, confectionery, tobacco and cosmetics is also growing,” says the company.
“Spirits is our number two category and is growing on a yearly basis. In numbers, we do have room to improve these results by introducing new and alternative brands our customers are requesting, especially premium single malts which we are beginning to expand into now. Our best sellers from spirits will be from both Johnny Walker and Chivas Regal followed by single malts, vodka also wine.
“Tobacco is our number four category. We work with the existing Philip Morris and Japan Tobacco International (JTI) brands, where we have noticed increased sales and customers looking for more duty free offers. We are still in negotiations with other suppliers to expand this category.”
Iraq Duty Free has been focusing on upgrading its stores and has embarked on a retail expansion strategy that will see more downtown store openings over the next few years
Downtown concept
After just one year of operations, Iraq Duty Free’s new downtown location in the heart of Baghdad is a welcome addition for both retailer and customers.
Further to winning the ten-year contract awarded by the Iraq Ministry of Trade, Iraq Duty Free launched its first ever downtown location with the aim of targeting both international travelers, as well as local Iraqis who can buy duty free goods in-store for up to 30 days after arriving home and at the same prices as at the airport. Furthermore, the store’s success has led IDF to plan ahead for further downtown locations, with a location on the eastern side of the city likely to be the next opening, ahead of others in major Iraq cities.
“Our first ever downtown duty free store has resulted in an amazing concept launch, and since it opened in May 2022, is performing much better than our expectations,” says the company. “Initially for Iraqis the concept of coming to the shop with their passport to be able to enter the store after returning from their travels was a new mindset, but the word has spread and now our business at the downtown shop is bringing us amazing results; so much that we intend to open a second store in Baghdad very shortly.”
With new retail concepts and expansion plans on the horizon we can expect more to come from Iraq Duty Free this year.
