SOUTH KOREA. Travel retail giant Lotte Duty Free posted a +15% year-on-year gain in first-quarter sales (excluding Busan downtown and airport sales) to KRW1,262.9 billion (US$1.17 billion).
Sales in South Korea increased by +14% year-on-year to KRW1,222.8 billion (US$1.14 billion). Amid the easing THAAD dispute between South Korea and China, downtown duty free shops posted a +19% rise in sales, as Chinese tourism slowly recovered. However, airport sales dropped -2% compared with the same period last year.
Operating profit reached KRW100.5 billion (US$93.6 million) downtown and KRW67.0 billion (US$62.4 million) in the airports. Although total operating profit declined -36% year-on-year due to the THAAD crisis, various cost-cutting measures seem to have been positive, Lotte Duty Free noted.
The company said it expects to expand overseas new business this year. Offshore sales grew +52% year-on-year on the back of the company’s burgeoning duty free presence in Vietnam (which posted a profit) and Japan (which grew +35%).
“We are considering additional launches in Vietnam’s major cities such as Ho Chi Minh City and Hanoi, including Nha Trang Airport, which is scheduled to open in June, and other overseas destinations,” the company said.
Click here to read Martin Moodie’s recent interview with Lotte Duty Free Managing Director Strategy & Planning Division JongHwan Lee in the The Moodie Davitt Report Interactive Edition for May.