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Duty free sales record in Japan

Japan duty free sales increase - Retail in Asia

Japanese department stores reported a duty free sales increase of +24.8% year-on-year to ¥21.7 billion (US$190 million) in January – setting a record monthly figure.

Sales per shopper fell but the growth in the number of visitors to the country – particularly those coming from China to mark Chinese New Year – helped January beat the previous sales record of ¥19.7 billion (US$172.4 million) set in April 2015.

The results are especially welcoming news after a sharp late-2016 slowdown in duty free spending by foreign visitors, seemingly bringing an end to the extraordinary Chinese buying wave, dubbed ‘bakugai’ (‘explosive buying’), which began in Japan in 2015.

As reported, that downturn prompted South Korean travel retailer Lotte Duty Free and its partners Bic Camera and New Kansai International Airport Company (NKIAC) to pull out of a planned downtown duty free shop proposed for Osaka.

According to The Japan Times, spending by foreign visitors for July-September 2016 fell, the first quarterly drop in over four-and-a-half years.

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The Japan Department Stores Association (JDSA), which compiled the January figures, said cosmetics were the number-one-selling product during the month, followed by women’s fashion accessories, food, high-end brands and women’s clothing.

JDSA said visitors from Mainland China were the biggest spenders, ahead of those from Hong Kong, Taiwan, South Korea, Thailand, Singapore and Malaysia.

Sales of general goods totalled approximately ¥14.69 billion (US$128 million), while consumables such as cosmetics and food accounted for the remainder of the revenue.

Peak performance: This graph highlights how January (far-left column with general goods in red, consumables in yellow) was a record month for duty free sales for Japan’s department stores. The only time monthly sales have surpassed ¥20 billion (image credit: Japan Department Stores Association)

Figures released by the Ministry of Economy, Trade and Industry last week showed that Japanese retail sales increased for a third straight month in January, perhaps suggesting the long-term spending slump in the country is drawing to a close.

The Ministry said sales edged up by +1% year on year and by +0.5% compared to the previous month.

(Source: Moodie Davitt Report)

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