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March 29, 2024

Duty-free sales recover for 2nd straight month

PUBLISHED : July 23, 2017 - 16:52

UPDATED : July 23, 2017 - 16:52

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[THE INVESTOR] South Korea’s duty-free stores posted an increase in sales for the second month in a row in July, recovering from monthslong sluggish sales due to declining Chinese visitors amid diplomatic tension between Seoul and Beijing.

According to the Korea Duty Free Shops Association last week, sales of local duty-free stores to foreign visitors increased by 5 percent on-month to reach $688 million.

Around 1.06 million foreign shoppers visited duty-free stores in Korea in June, a 3.9 percent increase from May, the data also showed.

The sales in June, however, were still 22 percent lower compared with February’s figure, before the Chinese government started its alleged trip restriction in retaliation against Seoul’s hosting of the Terminal High Altitude Area Defense system.

The number of foreign visitors to the stores nationwide in June was also 34.8 percent lower than the number in February.

Korea’s duty-free stores said that it will take more time to fully recover their sales and operating profit.

Industry sources explained that the recoveries in the combined sales over the last two months were backed by increase in marketing costs and discounts. The actual operating profit might remain low or would decline further, in trying to maintain the sales figure, they added.

By Shim Woo-hyun/The Korea Herald (ws@heraldcorp.com)

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