Major department store operators in Japan reported a drop in duty-free sales during the Lunar New Year holiday amid China’s ban on all outbound group travel to stop the spread of a deadly coronavirus.
Three out of the nation’s four major operators, including Takashimaya Co., saw double-digit declines in duty-free sales starting in late January, with the decrease continuing into this month.
Chinese tourists make the majority of duty-free purchases, so the downturn is expected to persist.
Takashimaya reported a 14.7 percent fall in duty-free sales in the week through last Thursday from the previous year’s weeklong Lunar New Year holiday through Feb. 10.
Sogo & Seibu Co. said its duty-free purchases during the holiday period were down 15 percent compared with last year, while Isetan Mitsukoshi Holdings Ltd. said its sales fell about 10 percent.
Sales of J. Front Retailing Co., operator of Daimaru and Matsuzakaya department stores, decreased 5 percent.
The largest drop in overall sales was reported in the latter half of this year’s Lunar New Year following a ban on tour groups to Japan from China starting Jan. 27.
The fall in visitor numbers led to the overall drop in duty-free sales, as Chinese tourists comprise approximately 80 percent of the purchases at Takashimaya, and also make up the majority at other department stores.
China banned outbound group travel to curb the spread of the coronavirus, which has killed at least 360 people and sickened more than 17,000 in the country.