What: Duty free in Japanese department stores is exceeding expectations.

Why it is important: Thank the touristic influx fuelles by the weak Yea.

In March, Japan witnessed a substantial increase in duty-free sales at its department stores, which escalated almost 2.5 times year-over-year to a record-breaking 49.5 billion yen ($320 million). This surge, the highest since records began in October 2014, was primarily fueled by the weak yen and coincided with a high influx of tourists during the cherry blossom season. This period also marked the ninth consecutive month that sales exceeded pre-pandemic levels of 2019. Additionally, the number of duty-free shoppers reached a new high for March, totaling 454,000 according to the Japan Department Stores Association.

Overall, same-store sales among 177 stores run by 71 companies rose by 9.9% to 510.9 billion yen, continuing a 25-month streak of growth. Despite the positive impact of the yen's depreciation on sales, an association official highlighted the accompanying challenges, notably the increased costs of imported goods due to the currency's weakness. The yen fell to a 34-year low against the U.S. dollar by the end of March, prompting concerns about the need for a more balanced economic approach.

Japan’s March duty-free sales at department stores surge to record high