Lotte Duty Free has won the highly profitable contract to operate the duty-free shops at Melbourne Airport.
The South Korean travel retail giant, with global sales of $US4.86 billion in 2021, beat off strong competition to secure the 10-year concession and will take over from current operator, Dufry, at the end of May. The move marks the first time Melbourne Airport has changed duty free operators in 30 years.
Lotte has big plans for its new venture. The current total shopping area in the Melbourne international terminal is 3592 square metres. But in a bid to reach annual sales of US$243 million, Lotte intends to expand facilities to 5800 square metres.
Other major international travel retailers operators in the Australia and New Zealand market include DFS Group, Heinemann, Dufry, ARI and Lagardere, making the Oceania region very competitive. Prior to the Covid-19 pandemic, the trans-Tasman duty-free market was worth close to US$1 billion.
Melbourne ranks second only to Singapore’s Changi Airport in Lotte’s global network and the company aims to become the largest travel retailer in ANZ by next year.
International traffic at Melbourne Airport is already back to 70 per cent of pre-Covid levels with higher figures predicted by the end of the year.
Beauty is a major money-spinner globally in travel retail, alongside fashion, wine and spirits and watches and jewellery, for both international and Australian brands. Lotte clearly demonstrated the strong connection with the opening of its multi-storey Sydney CBD and Da Nang in Vietnam stores last year.
In the second half of this year, Lotte is on track to open stores in Changi and Hanoi airports to boost its current network of 13 stores in six overseas countries.
Lotte entered the ANZ market in 2018, following the acquisition of five duty-free shops from JR Duty Free. Over the past five years, the company has opened stores in Brisbane, Darwin, Canberra and Wellington airports.
According to Kim Ju-nam, CEO of Lotte Duty Free – “Lotte Duty Free’s Melbourne Airport store will be a focal point for further overseas expansion and recovery. With successful operation of the store, Lotte Duty Free will step up to be a leading travel retailer in the Oceania region.”
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