Many major department stores are zeroing in on foreign tourists and other visitors exempt from paying the consumption tax if they spend over a certain amount, anticipating that sales of luxury items will plunge following the sales tax hike next Tuesday.
Department stores have enjoyed solid growth in the past few months thanks to robust sales of luxury products such as jewelry and paintings as well as a rise in foreign visitors.
Since last May, the monthly number of foreign visitors shopping at department stores has doubled on a year-on-year basis on the back of the weaker yen.
Despite the soured relations between Tokyo and Beijing, wealthy Chinese customers flocked to Japan’s department stores during the Lunar New Year holidays from the end of January through early February.
Data released by the Japan Department Stores Association also showed that monthly tax-free sales at the main outlets of the department store operators surveyed have been around twice the level of a year earlier on a same-store basis since last May.
In an effort to attract Chinese customers, the Mitsukoshi department store in Ginza, Tokyo, hired four workers who can speak Chinese last October.
It also offered items with the number “8,” which is considered lucky in China, during the Lunar New Year season, including New Year’s lucky grab bags priced at ¥8,800.
The department store’s total tax-free sales to Chinese customers were up nearly fivefold from the previous Lunar New Year season, according to Mitsukoshi.
A 64-year-old tourist from Taiwan who was shopping at the store said, “Japanese department stores are clean and wonderful.”
The number of foreign visitors at Takashimaya’s Shinjuku store in Tokyo soared 40 to 50 percent during the Lunar New Year season from a year earlier.
A Takashimaya official said the surge was largely attributable to the store’s speeding up last fall of tax exemption procedures.
Matsuya’s Ginza store logged an 8.4-fold increase in tax-free sales from Feb. 1 to 6, and about 80 percent of foreign visitors who came to shop during the period were from China.
“We plan to enhance our steps to further increase the number of foreign customers so as to make up for an expected drop in sales shortly after the consumption tax increase,” a Matsuya official said.
In a related move, the government has decided to expand the scope of tax-free products, making cosmetics and other items newly exempt from tax, to attract more foreign visitors.