Department stores in Japan gear up for duty-free expansion

With demand for gifts and souvenirs among foreign tourists expected to increase after cosmetics, food and other products are granted duty-free status on Oct. 1, department store chains around the nation are working to expand their services for customers from overseas.

"If cosmetics were duty free, I'd want to buy them, too," said a 54-year-old Singaporean woman at Mitsukoshi's Ginza store in early September. The woman said she visits Japan twice a year for tourism and dining.

Duty-free items are currently limited to products such as electronics and clothing, but come October, consumable items including food, alcohol and cosmetics will also be available. Department store chains are busily preparing for the expansion, taking such steps as establishing special duty-free sales areas, expanding counters to process duty-free purchases and hiring more staff.

Takashimaya is setting up free wireless Internet service for foreign travelers in all its stores. The chain is also establishing a Muslim prayer room in its Shinjuku branch.

Matsuya is expanding its lineup of Japanese sake, a popular gift purchase, and moving a duty-free counter to the food floor at its store in Ginza.

Department store sales of duty-free item have increased as the number of foreigners visiting Japan has risen. The leading department store chains logged ¥33 billion in duty-free sales from January to July, according to the Japan Department Stores Association. This is near the total for all of last year, which was itself a record high at ¥38.4 billion.

"It's nearly certain this year will see record sales, which should give momentum to the duty-free expansion," a representative of the association said.

However, there are some issues to be addressed regarding the expanded lineup. For example, it is assumed that duty-free products will be consumed outside Japan, so it can be difficult to decide if desserts and other products with short shelf lives should be sold duty-free.

Department stores must also place stickers on products warning customers not to open them before they leave Japan, or use adhesive on products and packaging that will show if the item has been opened.