What: Japanese department stores achieve record 5.75 trillion yen in sales for 2024, driven by surge in duty-free purchases and return of international tourism.

Why it is important: This performance demonstrates how department stores can leverage tourism and currency advantages while maintaining domestic luxury consumption, though regional disparities persist.

Japanese department stores achieved unprecedented success in 2024, with total sales reaching 5.75 trillion yen and surpassing pre-pandemic levels. Same-store sales grew 6.8% year-over-year, marking the fourth consecutive year of growth. Duty-free sales were particularly strong, surging 85.9% to 648.7 billion yen and setting a record for the second straight year. The success was driven by multiple factors, including the return of Chinese travellers, a weak yen boosting luxury purchases, and strong domestic demand for high-end goods. However, the performance showed significant regional variation, with stores in 10 major cities growing 9.1% while regional locations declined 0.5%, highlighting ongoing structural challenges.

IADS Notes: The record-breaking performance of Japanese department stores reflects broader market transformations. January 2025 data shows J Front Retailing's success in luxury categories and high-value customer segments, while December 2024 reveals how the luxury secondhand sector is benefiting from increased tourism. However, March 2024 reports indicate ongoing challenges for regional stores, with several prefectures losing their last department stores despite the overall market recovery. This polarisation occurs as Japan emerges as a bright spot in the global luxury market, as documented in August 2024, with July 2024 data showing wealthy shoppers driving significant growth in high-end retail stocks. These developments demonstrate how Japanese department stores are successfully capitalising on tourism and luxury demand in major cities, while regional locations face continued structural challenges.

Japan department store sales in 2024 top pre-pandemic levels of 2019