The number of foreign visitors to local duty-free shops, meanwhile, plunged 44.7 percent from 1.91 million in July 2016 to 1.05 million last month.

The drop in the number of visitors is largely due to Beijing's ban on selling package tours to South Korea in an apparent retaliation over the deployment of a Terminal High Altitude Area Defense battery here.

Last month, the number of Chinese visitors declined nearly 70 percent, marking a drop for five straight months. Chinese visitors accounted for nearly half of some 17 million foreigners in the country last year.

Local duty-free stores say the latest increase in sales is attributable to large discounts and marketing efforts, adding it will take some more time for their business to fully recover.

Hotel Lotte's duty-free unit, operator of the country's top Lotte Duty Free, logged an operating income of 7.4 billion won ($6.5 million) in the January-June period, a sharp fall from the operating income of 233 billion won a year earlier, according to its semi-annual business report. (Yonhap)