What: Japanese department stores achieve record-breaking duty-free sales in 2024, driven by tourism recovery and strong luxury goods performance.

Why it is important: This success illustrates how department stores can thrive by effectively combining international tourism appeal with strong domestic luxury consumption in favourable market conditions.

Japanese department stores achieved unprecedented growth in 2024, with duty-free sales soaring 85.9% year-over-year to reach ¥648.7 billion. This performance was driven by strong sales in jewelry, luxury brands, and cosmetics, supported by increased international tourism and the yen's depreciation. The number of duty-free shoppers reached a record 6,037,000, representing a 74.3% increase. Overall department store sales, including domestic transactions, grew 6.8% on a same-store basis to ¥5,772.2 billion, surpassing pre-pandemic levels. While luxury categories showed robust growth, food sales declined 0.6% amid rising prices, highlighting the contrasting performance across different retail segments.

IADS Notes: Japan's record-breaking duty-free sales in 2024 reflect broader trends in the country's retail transformation. J Front Retailing's January 2025 performance shows particularly strong growth in luxury categories and high-value customer segments, while November 2024 data revealed unprecedented tax-free sales of ¥50.8 billion. This success builds on momentum established in April 2024, when department store profits first exceeded pre-pandemic levels, driven by robust luxury sales. Japan's emergence as a bright spot in the global luxury market, documented in July 2024, demonstrates how the weak yen and returning tourism have created unique opportunities. The trend extends beyond traditional retail, as evidenced by December 2024's surge in the luxury secondhand sector. These developments collectively show how Japanese retailers have successfully leveraged tourism and currency advantages while maintaining strong domestic luxury consumption.

Duty-Free Sales at dept. stores in Japan Soar 85.9% in 2024