30th June 2025 – (Tokyo) Tax-free sales at department stores across Japan are witnessing a significant decline, indicating a shift in the shopping behaviours of foreign tourists and prompting retailers to adapt their strategies to this evolving landscape. Based on data from the Japan Department Stores Association, tax-free product sales in May experienced a sharp 40% year-on-year decrease, marking the third consecutive month of decline. Specifically, sales of general products, including luxury brands, saw a notable 45.6% drop compared to the same period last year, reflecting a slowdown in high-end purchases. The average spending per shopper stood at around ¥79,000 ($546), representing a decrease of approximately ¥47,000 from May 2024.
Moreover, the number of shoppers decreased by 5.4% during this period, marking the first negative growth in 38 months.
Yoshiharu Nishisaka, the executive of the association, noted, “There is a greater diversity among foreign tourists, and their shopping preferences have undergone a change.”
A senior official at a prominent department store highlighted that the stronger yen and price increases of international luxury brands have diminished the allure of purchasing tax-free items for many tourists. Additionally, another source from a different department store mentioned that consumer confidence has waned due to economic uncertainties stemming from U.S. President Donald Trump’s tariffs and China’s economic deceleration.
Speculations circulating on social media about an impending major earthquake in Japan have led to a decline in travellers from Hong Kong.
While major department stores are striving to accommodate foreign clientele, the extent to which these efforts will drive increased sales remains uncertain.
For instance, Isetan Mitsukoshi Holdings rolled out an app for foreign customers in March to communicate sales promotions and offer coupons. Matsuya’s Ginza branch inaugurated a guest lounge tailored for affluent foreign visitors, while Takashimaya is distributing VIP cards at its Singapore branch, providing patrons with priority services during tax-free processes at its Japanese department stores.
AloJapan.com