China travel restrictions impacted Japan's duty-free sales in December.
Japan's duty-free sales fell sharply in December due to decreased Chinese tourist visits amid ongoing geopolitical tensions.
December hit Japanese department stores hard, with duty-free sales at Daimaru and Matsuzakaya plunging 17% year-on-year. Overall sales took a hit, dropping 1.9% for the month. Takashimaya's tax-free sales fell 11%, while Matsuya's flagship store in Ginza saw an 11% decline due to the absence of Chinese tourists. Isetan Mitsukoshi’s numbers weren't any better, dropping 14% in duty-free sales. You see, China's travel advisories have thrown a wrench in the whole retail game.
Chinese tourists have been vital for Japan’s recovery post-COVID, driving about 20% of the country's ¥8.1 trillion tourism revenue. Now, with travel restrictions tightening and fewer flights, that support feels wobbly. Hiromu Komiya from the Japan Research Institute warns we could lose up to ¥1.2 trillion in tourism revenue this year if things don’t improve. It’s a tough setup that could really hurt the economy.
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