Amid mounting losses Lotte Duty Free has decided to abandon three retail concessions in Terminal 1 (T1) at Incheon International Airport, holding onto just the liquor and tobacco contract.
Operator Incheon International Airport Corporation (IIAC) is expected to accept the notice of contract termination in March; then Lotte Duty Free will operate in T1 for 120 days before withdrawing.
Meanwhile, IIAC reported record duty-free sales in 2017 of USD2.13 billion – a 4.1% increase – more than any other airport in the world.
Lotte cited “rent burden increases as the number of Chinese tourists has plunged” for its departure. Lotte Group had sold land for deployment of US Terminal High Altitude Area Defense (THAAD) missiles in South Korea, prompting Chinese travellers to boycott the airport stores.
Although this dispute has now been resolved by the governments of the two nations, Lotte has run its activities in Incheon at a deficit of KRW200 billion (USD185 million) since 2016, and the South Korean conglomerate says these losses would have spiralled to KRW1.4 billion by 2020 without intervention.
See related article at: http://www.janesairport360.com/article/9543/regional-tensions-hit-korean-retail-operator
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