Key facts
- Nearly 40% of Japanese department stores anticipate higher international tourist spending this fiscal year.
- Inbound tourist spending at Japanese department stores hit a record 59.9 billion yen in April.
- Duty-free sales at major department stores like Takashimaya and H2O Retailing surged in May.
- Luxury brands such as LVMH and Hermes reported significant revenue growth in Japan.
- The weak yen is a primary driver for increased tourist spending, particularly on luxury goods.
Nearly 40% of department stores in Japan anticipate an increase in sales from international tourists for the current fiscal year, according to a report. This rise is being driven by visitors from Europe, the U.S., and Southeast Asia, who are helping to offset a decline in travelers from China.
Japan's duty-free sales saw a significant surge in May, with major retailers like Takashimaya and H2O Retailing reporting a 20% increase. This growth is largely attributed to the persistently weak yen, which encourages tourists to spend more on luxury goods, jewelry, watches, and cosmetics. While purchases from Chinese visitors have decreased, the overall inbound traffic from regions like Taiwan, South Korea, and Southeast Asia has been increasing.
Inbound tourist spending at Japanese department stores reached a record high of nearly 60 billion yen in April. This contributed to an overall 8.9% increase in total department store sales for the month compared to the previous year. The number of customers entering stores also saw a 2.4% rise, marking the 26th consecutive month of growth. Luxury brands are experiencing substantial benefits, with LVMH reporting double-digit revenue growth in Japan and Hermes seeing a 25% sales hike.
The influx of tourists, exceeding 3 million in March 2024, has boosted tourism spending by nearly 50% in the first quarter of 2024 compared to 2019 levels. This trend is expected to continue, although the long-term sustainability of the boom may depend on currency fluctuations.