LS Securities: Full-Scale Restructuring Expected for Airport Duty-Free Stores

LS Securities analyzed on September 29 that despite the recovery in the number of foreign arrivals, duty-free store sales remain sluggish, and a full-scale restructuring of airport duty-free stores is expected.

Yonhap News Agency

According to the Korea Duty Free Shops Association, duty-free store sales in August 2025 amounted to 730 million dollars, a 20.5% decrease compared to the same period last year.

Orina Oh, a researcher at LS Securities, stated, "Sales to domestic customers have remained relatively stable, but the recovery in foreign customer sales is still slow. The recent delay in the recovery of duty-free sales suggests that the consumption patterns of foreign tourists have changed."

She explained, "For example, looking at card spending data from foreign tourists in July this year, there was a significant increase in daily consumption and experience-based areas such as Olive Young, museums, and PC cafes, rather than at duty-free stores. This shift shows that the focus of foreign tourism is moving from 'duty-free shopping' to 'experiential consumption,' which explains the structural slowdown in the duty-free industry."

She went on to predict that airport duty-free store restructuring will accelerate. Recently, Shilla Duty Free returned its DF1 zone business rights. The penalty is 190 billion won, and the store is scheduled to close on March 17, 2026. She said, "Following Hotel Shilla's decision, there is a possibility that Shinsegae Duty Free will also reconsider its business operations. Although the duty-free industry has entered a phase of declining sales, downtown duty-free stores are maintaining profitability, recording a surplus. After having weathered the worst during the THAAD crisis and the COVID-19 pandemic, the risk of further decline is limited."

She added, "Structural challenges such as changes in foreign tourists' consumption patterns and weak demand from Chinese customers still persist. However, it is a positive development that the industry is restructuring the airport duty-free sector, which has been posting large deficits for some time."

This content was produced with the assistance of AI translation services.