One of the world’s best-known travel retailers, Dubai Duty Free, notched up sales of $1.74 billion last year. While that was 78% ahead of 2021, it was still significantly behind pre-pandemic 2019’s $2.03 billion. And what’s more, beauty has had a rougher ride than one might have expected, given the overall rebound.

In 2021, perfume increased its dominance at Dubai International Airport, Dubai Duty Free’s main retail location, but that lead has narrowed. This time around, the category managed to hold the top spot with sales of $311 million, but liquor closed in, reaching $280 million, and it is now just two percentage points behind. Respectively the two categories accounted for 18% and 16% of the retailer’s total annual sales.

Meanwhile, cosmetics—yet again—was not ranked in the top five despite the relaxation of COVID rules on touching and testing products during the course of 2022. Another issue for cosmetics could be the supply chain, which Dubai Duty Free’s Chief Operating Officer Ramesh Cidambi said had severely disrupted deliveries across multiple categories. Equally, it looks as though brands had focused more on the easier sell of perfumes to drive volumes.

Cosmetics used to be the third bestselling category in 2019 with $232.5 million, but in 2022 sales had dropped to, at most, $137 million. That is based on the fact that the fifth biggest product group at Dubai Duty Free was electronics, with $137.6 million (8% of total annual sales). The retailer did not release category sales data below fifth place.

Interestingly, cosmetics did make it into fourth place during Dubai Duty Free’s annual three-day, 25% price off promotion in December, generating sales of £2 million. This might herald the resurgence of the category in 2023. The perfume category led the promotion with sales of $7.3 million over the three days.

Is Consumer Sentiment Changing?

Dubai Duty Free is confident it is on track for a strong recovery after two challenging years. Executive Vice Chairman & CEO Colm McLoughlin said: “We are thrilled to announce such a positive year as travel returns, during which the operation went from strength to strength.”

Exactly how well the business holds up in 2023 is another issue. Last year, in the eight months through August, the retailer recorded a 104% year-over-year increase in sales to reach $1.06 billion. But after a full 12 months, the growth rate fell back to 78%. In addition, while average transaction values were higher in 2022 versus 2019 (respectively $10 and $8.36), during the December sale it was the opposite.

The three-day event saw passengers spending $142.75 on average per transaction, lower than the $160.10 spent in 2019. Traveling consumers are clearly looking for bargains, but it seems they have also tightened their belts as the year has progressed.

In total, Dubai Duty Free recorded over 17.3 million sales transactions throughout the year, averaging out at almost 47,000 sales transactions per day. Some 47.3 million units of merchandise were sold across all categories. Online sales accounted for 2.5% of the overall sales tally for 2022 and reached $44.2 million.