DFA talks growth opportunities and strategy to stimulate customer spending

Duty Free Americas President Leon Falic.

Teaming a significant investment in its border store business with a bold growth strategy, Duty Free Americas (DFA) is doubling down on ambitious plans to expand its global footprint while utilising promotions and strategic marketing to help boost consumer spending. 

DFA President Leon Falic confirmed to TRBusiness for the 2024 Top 10 International Operators report, that the company’s final revenue figure in 2023 was $2.07 billion, consistent with its earlier forecast.

“The forecast of $2.1 billion for 2024 remains unchanged,” he added. “We are confident in our projections and continue to expect this level of revenue based on current market trends and our strategic initiatives.”

The duty free retailer’s footprint encompasses more than 250 stores in airports and at border crossings in the US, Chile, Colombia, Dominican Republic, Haiti, Panama, El Salvador and Uruguay, as well as in Israel and China. 

“So far this year, we have made significant progress in expanding our global footprint,” he said. “While I can’t provide specific numbers for new openings at this moment, we are actively pursuing growth opportunities and working towards ambitious targets.”

Customer spend ‘falling short of expectations’

Falic previously told TRBusiness that customer spend was “not as expected” in Q1 2024 and, so far, not much has changed.

DFA store at Punta Cana International Airport.

“Customer spend so far this year is still not meeting our expectations,” he said. “We’re not very optimistic about seeing a significant improvement in the near term.

“To address this, we plan to implement more promotions and strategic marketing efforts to encourage increased spending and better align with our targets.”

Recent activities include the January 2024 launch of three speciality retail stores at Dallas Fort Worth International Airport (DFW): the first ever travel retail store for Toys“R”Us, DFA’s debut sunglasses store in the US, Shade; and the inaugural Lego store at the hub.

The move sees DFA operating a total of seven stores at DFW, which handles around 73 million passengers each year.

Brazil business stifled by ‘complexity & complications’ 

DFA’s border store business is, of course, a primary focus and is getting the financial boost it needs to grow and develop as planned.

“For 2024, we’ve allocated substantial capital expenditure to drive growth in our border stores, reflecting our strategic focus on this sector,” said Falic. “We aim to enhance our store formats, expand our presence, and improve the customer experience.

“In Latin America, the market continues to grow and presents numerous untapped opportunities. We’re particularly focused on diversifying our product categories and introducing new brands to meet evolving consumer preferences.”

As reported by TRBusiness earlier this year, DFA has closed its Brazil border business and is putting a strategic focus on the Uruguayan side.

“The decision to close our border business in Brazil was primarily driven by the complexity and complications related to internal duties and taxes,” said Falic. “The regulatory environment posed significant challenges, making it difficult to operate efficiently and profitably.”

Toys”R”Us store at Dallas Fort Worth International Airport.

Outside of the Americas, DFA is making sure and steady gains in line with its strategic global expansion plan. Its Dubai office is now home to six employees. 

“Our new office in Dubai is performing well and has been a valuable addition to our operations,” said Falic.

“Having a presence on the ground in the UAE is proving instrumental in executing our regional strategy, allowing us to better understand and respond to local market dynamics. This strategic location helps us manage expectations and seize opportunities across the entire region more effectively.”

India, with its rapidly growing travel and retail markets, is also “a key focus”.

Said Falic. “We are keen to explore opportunities in India that may be coming to the market shortly.”

Monitoring in Macau

Meanwhile, DFA is optimistic of a stronger comeback in the second half of the year.

“Our operations in Macau are holding steady, although not as robust as in the past,” added Falic. 

“The spending patterns of the Chinese customer have shifted to looking for promotions as a primary purchase motivation, and we are closely monitoring this trend, anticipating a positive change this year.”

TWG Tea at The Venetian Macao.

Further to the above, the travel retailer has been hinting about expanding into Europe for some time, although the exact details are still under wraps.

“We’re excited to announce that we will be revealing details about our European expansion very soon,” he revealed.

“Stay tuned for updates as we finalise and share our plans for growth in this key market.”

Finally, DFA is continuing to invest and expand in Israel, where it is the second largest distributor of liquor in the country.

Said Falic: “We remain committed to growing our presence and exploring new opportunities in the market.”

This interview first appeared in the 2024 Top 10 International Operators report.

READ MORE: Duty Free Americas optimistic on surpassing $2.1 billion revenue in 2024

READ MORE: Duty Free Americas raises $1 million in the fight against cancer

READ MORE: Duty Free Americas opens trio of retail firsts at Dallas Fort Worth Airport