What: Major department store chains in Japan have reported net profits surpassing pre-pandemic levels for the year ending February, boosted by robust sales to overseas tourists and renewed confidence among domestic shoppers.

Why it is important: This financial rebound is significant as it highlights the recovery and growth of the retail sector in Japan following the economic downturn caused by the COVID-19 pandemic. The surge in profits reflects not only the return of international tourism but also an increase in domestic consumer spending, indicating a strong resurgence in both global and local economic activities.

J. Front Retailing and Takashimaya, major players in Japan's retail market, have both reported exceptional annual earnings. J. Front Retailing, which operates Daimaru Matsuzakaya Department Stores, announced a net profit of approximately 30 billion yen (USD 194 million), more than doubling its profits from the previous year and exceeding earnings from four years prior. The company attributed this performance to high sales of luxury items to domestic consumers and record-breaking tax-free transactions with international tourists. Similarly, Takashimaya posted a record group net profit of 31.6 billion yen (USD 205 million), marking a 13.6% increase from the year before. These results underscore a robust recovery and optimistic outlook for the retail industry in Japan, propelled by both returning tourists and spending by local consumers.

Department store profits in Japan top pre-pandemic levels