Osaka duty-free shop plan scrapped as tourist shopping sprees slow

Kyodo

Kansai Airports said Thursday it has scrapped a plan to open a duty-free shop in central Osaka due to a slowdown in so-called explosive shopping by tourists.

Spending by foreign visitors to Japan decreased in the July-September quarter from a year earlier, the first quarterly drop in over 4½ years, due to a decline in bakugai shopping binges, according to government data.

However, the number of foreign visitors to Japan is still on the rise, hitting 24.03 million last year and topping the 20 million mark for the first time.

Kansai Airports, which operates Kansai International Airport in Izumisano, Osaka Prefecture, and Itami airport in northern Osaka, had agreed in February with Biccamera Inc., a major home appliances and electronic products retailer, to open a duty-free shop on the sixth and seventh floors of that retailer’s mall in Namba. The Lotte group of South Korea was to operate the duty-free store.

The airport operator set a first-year sales target of ¥13 billion ($114 million) for the store.

But last month it began reviewing the plan to open the shop this spring in Namba, one of the busiest areas in Osaka, as slowing spending by foreign tourists dimmed prospects for a decent profit, it said.

Last year, duty-free shops opened in Ginza in central Tokyo and in Fukuoka, southwestern Japan.

The stores offer tax-free shopping for foreign tourists on items such as Japanese-made rice cookers and toilet seats with washlet functions.