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Japan Times
21 hours ago
- Business
- Japan Times
Department stores' tax-free sales drop as tourists' shopping patterns change
Tax-free sales at department stores nationwide are plunging due in part to a change in the shopping patterns of foreign tourists, prompting retailers to rethink their business strategies. According to the Japan Department Stores Association, sales of tax-free products at department stores in May fell 40% year-on-year, with the decline being for the third month in a row. Broken down by category, general products sales, which includes luxury brands, decreased 45.6% from the same month last year, showing a slowdown in high-end items. The average amount each shopper spent was about ¥79,000 ($546), down by about ¥47,000 from May 2024. The number of shoppers decreased 5.4% in the same period, shifting to negative growth for the first time in 38 months. 'There is a greater diversity of foreign tourists, and their shopping priorities have changed,' said Yoshiharu Nishisaka, the association's executive. A senior official at a major department store pointed out that the stronger yen and price hikes of foreign luxury brands make buying tax-free items less attractive for many tourists, while a separate department store source said consumer sentiment is weaker due to uncertainty in the economy over U.S. President Donald Trump's tariffs, as well as China's economic slowdown. Travelers from Hong Kong have declined due to rumors on social media that there will be a major earthquake in Japan soon. Major department stores are doing their best to cater to foreign customers, but it's unclear if it will lead to more sales. Isetan Mitsukoshi Holdings introduced an app for foreign clients in March, for example, to send information about sales campaigns and coupons. Matsuya's Ginza outlet opened a guest lounge for wealthy foreign customers, while Takashimaya is issuing VIP cards at its Singapore outlet so customers can enjoy priority treatment when going through tax-free procedures at its department stores in Japan. Translated by The Japan Times
Straits Times
2 days ago
- Business
- Straits Times
Tax-free sales at department stores drop in Japan as foreign tourists curb spending
In the hopes of drawing back foreign customers, department stores are taking targeted measures. PHOTO: REUTERS TOKYO - Visitors to Japan have been key customers for department stores, but now they are tightening the purse strings. Foreign visitors spent about 42.5 billion yen (S$374.4 million) at department stores nationwide in May, down by a massive 40.8 per cent from the same month in 2024, the Japan Department Stores Association announced on June 24. Department stores will try to adapt, such as by offering an app exclusively for overseas customers, but it remains uncertain whether sales will rebound. May 2025 was the third straight month for tax-free sales to fall from 2024. The number of foreign shoppers fell 5.4 per cent year on year, to about 536,000, dropping below the previous year's level for the first time in three years and two months. With sales for luxury brands and other high-priced items sluggish, average purchases per individual dropped by 37.4 per cent, to about 79,000 yen. Foreign visitors are believed to have found shopping in Japan less of a bargain after the recent rise in the yen and price hikes by high-end brands, which were prompted by a surge in raw material costs. Some also argue that Chinese tourists went on fewer shopping sprees due to the slowdown in the Chinese economy. From January to March, visitors to Japan spent about 222,000 yen on average, up 5.2 per cent from the same period in 2024, according to a survey by the Japan Tourism Agency. That suggests that overall consumption by foreign tourists has not declined. However, during that quarter, Chinese visitors spent significantly less on total purchases, with the average dropping by 13.7 per cent to 256,000 yen. 'The decline in the average spending per Chinese customer is particularly noticeable. Inbound tourists are diversifying their spending, and they are changing the types of shopping that they value,' said Mr Yoshiharu Nishisaka, managing director of the department stores association. In the hopes of drawing back foreign customers, department stores are taking targeted measures. Isetan Mitsukoshi Holdings Ltd launched an app for overseas customers in March. At its stores, the company encourages visitors to Japan to sign up for the app, offering discount coupons in return. Takashimaya Co issues VIP membership cards to its top customers at its Singapore store. The cards grant priority treatment when buying tax-free at branches in Japan, a perk meant to encourage them to visit. In April, the Daimaru Umeda department store began stocking plastic models and other items related to the Mobile Suit Gundam anime series. 'Japanese content such as anime is enormously popular overseas, and many customers visit us for these sorts of items,' said an employee from parent company J. Front Retailing Co. 'The real question for department stores is how to get foreign customers to stop in,' said senior researcher Naoko Kuga at the NLI Research Institute. 'They need to have a steady outreach to overseas customers.' THE JAPAN NEWS/ASIA NEWS NETWORK Join ST's Telegram channel and get the latest breaking news delivered to you.
Yomiuri Shimbun
3 days ago
- Business
- Yomiuri Shimbun
Tax-Free Sales at Department Stores Drop 40.8% in May, as Foreign Tourists Curb Spending
Visitors to Japan have been key customers for department stores, but now they are tightening the purse strings. Foreign visitors spent about ¥42.5 billion at department stores nationwide in May, down by a massive 40.8% from the same month last year, the Japan Department Stores Association announced Tuesday. Department stores will try to adapt, such as by offering an app exclusively for overseas customers, but it remains uncertain whether sales will rebound. May was the third straight month for tax-free sales to fall from a year earlier. The number of foreign shoppers fell 5.4% year on year, to about 536,000, dropping below the previous year's level for the first time in three years and two months. With sales for luxury brands and other high-priced items sluggish, average purchases per individual dropped by 37.4%, to about ¥79,000. Foreign visitors are believed to have found shopping in Japan less of a bargain after the recent rise in the yen and price hikes by high-end brands, which were prompted by a surge in raw material costs. Some also argue that Chinese tourists went on fewer shopping sprees due to the slowdown in the Chinese economy. From January to March, visitors to Japan spent about ¥222,000 on average, up 5.2% from the same period last year, according to a survey by the Japan Tourism Agency. That suggests that overall consumption by foreign tourists has not declined. However, during that quarter, Chinese visitors spent significantly less on total purchases, with the average dropping by 13.7% to ¥256,000. 'The decline in the average spending per Chinese customer is particularly noticeable. Inbound tourists are diversifying their spending, and they are changing the types of shopping that they value,' said Yoshiharu Nishisaka, managing director of the department stores association. In the hopes of drawing back foreign customers, department stores are taking targeted measures. Isetan Mitsukoshi Holdings Ltd. launched an app for overseas customers in March. At its stores, the company encourages visitors to Japan to sign up for the app, offering discount coupons in return. Takashimaya Co. issues VIP membership cards to its top customers at its Singapore store. The cards grant priority treatment when buying tax-free at branches in Japan, a perk meant to encourage them to visit. In April, the Daimaru Umeda department store began stocking plastic models and other items related to the Mobile Suit Gundam anime series. 'Japanese content such as anime is enormously popular overseas, and many customers visit us for these sorts of items,' said an employee from parent company J. Front Retailing Co. 'The real question for department stores is how to get foreign customers to stop in,' said Naoko Kuga, a senior researcher at the NLI Research Institute. 'They need to have a steady outreach to overseas customers.'
