ANA Trading Duty Free Co Ltd (ADF) has recently redesigned the layout of several of its duty free shops and boutiques at Narita, Haneda and Kansai airports to attract more customers and boost sales, following a drop in spending among Chinese travellers.

 

In an exclusive interview, Shimoda Hiroki, General Manager & Senior Manager of Section 1 Team for ADF’s Merchandising Department, told TRBusiness that the company registered total duty free sales of about JPY 12bn ($116m) in the financial year ending 31 March, 2016 (FY2015).

 

This meant that sales for the airport duty free division of All Nippon Airways Trading Co. LTD, increased almost 20% compared with FY2014.
“Last year a lot of Chinese visitors came to Japan and we got a lot of benefit from their shopping,” Hiroki remarked. “We had good sales for our luxury brands Bulgari, Burberry, Tumi and Montblanc, at different airports; it was the same for all operators.

 

 

“FY2015 revenue was up almost 20% compared to FY2014, we were happy, but now the trading conditions are very hard, particularly luxury brand sales are down. From April to June 2016 sales are down 15% compared to last year for boutiques.

 

 

“After October the situation changed, one reason was Chinese customs inspections were more strict. Also, Chinese people did not go to South Korea because of MERS in mid-2015, but that ended in August and then they went to South Korea again. Another thing is the Chinese travel pattern has changed from shopping to sightseeing.”

 

ADF SALES AT NARITA HIT JPY7.5BN

Narita Airport is ADF’s largest duty free operation accounting for about 60% of all its Japanese airport sales. Haneda TIAT is ADF’s second largest duty free operation, slightly ahead of Kansai Airport.

 

ADF sales totalled about JPY 7.5bn at Narita Airport in FY2015, where ADF operates three boutiques and the mixed category T1 Satellite 4 shop.
Perfume and cosmetics were the top selling category, accounting for almost 50% of sales at Narita, followed by boutiques with a 22% share of revenue.

 

ADF’s T1 and T2 Bulgari boutiques were the highest selling boutiques followed by the T1 ANA Duty Free Shop Men boutique, which sells Dunhill, Montblanc and Tumi.

 

 

Tobacco accounted for another 22% of Narita sales, followed by souvenirs which contributes 13%.

 

RECENT SHOP MODIFICATIONS

In FY2015 sales were about JPY 2.5bn in Haneda Airport TIAT terminal, where ADF operates a mixed category duty free shop and a beauty boutique under a subcontract from Jatco.

 

Recent shop layout modifications follow last year’s important change for ADF’s Narita International Airport operations, which involved moving its Terminal 2 mixed category shop to Terminal 1 Satellite 4. It is now close to departure gates used mainly by parent company All Nippon Airways and other Star Alliance member airlines.

 

 

Changes at Narita Airport this year include a complete renovation of the Bvlgari boutique in T1 South Wing.

 

“Our Bulgari boutique renovation was completed in March, it’s changed to a Peter Marino (the architect) design,” says Hiroki. “It’s one of the first in a Japanese airport.”

 

NEW DOWNTOWN SHOP

Elsewhere, ADF recently has reorganised the perfume and cosmetics display in its mixed category duty free shop at Haneda Airport’s Tokyo International Air Terminal (TIAT).

 

Meanwhile, in June 2016, All Nippon Airways (ANA) established A&S Takashimaya Duty Free Co Ltd with partners Takashimaya Co Ltd, the Japanese department store operator, and Shilla Duty Free of South Korea to set up and operate a downtown duty free shop in Shinjuku, one of Tokyo’s liveliest entertainment, shopping and business districts, and a major transport hub.

 

Planned to open in March 2017, the new A&S Takashimaya downtown duty free store will have a total retail space of 3,000 sq m and occupy floors 8 and 9 in Shinjuku Takashimaya Times Square Department Store.

 

Read the full-length interview inside the Japan Report in the October issue of TRBusiness Magazine.