For Japanese, Hawaii’s Hottest Spot May Be a Discount Mall : Retailing: Other chains follow Costco in filling niche for bargain-hungry tourists. Local shoppers also benefit.

The last time Makoto Fukumoto tried to do some shopping here, the Home Outlet discount store was closed. So Fukumoto and his new bride, Natsuko, came back.

From Osaka, Japan.

The 32-year-old Japanese banker said the low prices at Waikele Center, Hawaii’s first discount mall, and the chance to spend a few hours at the beach were reason enough to travel 4,000 miles just four short months after he and his wife came here to get married.

“We are a young couple and we don’t have a lot of money,” Fukumoto explained. “So that’s why we are shopping here. Prices are much cheaper than in Japan.”

For years, shopping has been a popular pastime for Japanese travelers whose buying power in the United States essentially doubled after the yen began its dramatic climb in the mid-1980s, leading to purchases of billions of dollars in U.S. real estate as well as in luxury merchandise.

But the crash of their “bubble” economy in 1990 has spawned a new value consciousness among the Japanese, whose overseas shopping lists today are more likely to include golf balls than golf courses or designer bedsheets instead of million-dollar waterfront condominiums.

That lust for bargains is now being satisfied with gusto here in Hawaii, particularly among the young “office ladies” and families who make up a growing share of the tourists from Japan.

One of Japan Travel Bureau’s popular new offerings is a half-day excursion to the Waikele Center, in the Honolulu suburb of Waipahu, and Sam’s Club. Another factory outlet mall is opening on the former Dole cannery site in downtown Honolulu. Costco and other discount clubs offer tourists one-day memberships.

With the Hawaiian economy in the doldrums, this shift in Japanese buying habits has been an unexpected boon for the off-price retailers and warehouse outlets that have also captured the hearts and pocketbooks of local residents. Japanese tourists are departing Honolulu International Airport carrying bags of bath towels or kitchen gadgets in addition to the typical omiyage , or gifts, such as macadamia nuts and T-shirts.

“The surprise to a lot of us was the Japanese tourists clamoring for off-price goods,” said Jan Berman, president of Retail Merchants of Hawaii, a 100-member trade group. “We were not prepared for that kind of impact.”

Not that the discounters have hurt business in the upscale shopping districts of Waikiki, where the Chanel, Louis Vuitton and Ferragamo boutiques still do a brisk business. Even at full price, a pair of designer shoes or a handbag is much cheaper in Hawaii, because of today’s still-strong yen, than in Japan.

But other Hawaiian retailers have not been able to survive the new discount competition. The hardest hit have been small operators like Arakawa, a turn-of-the-century general store in Waipahu that closed earlier this year.

The winds of discount retailing have been blowing across America for years, but Hawaii’s high land costs, shipping expenses and limited population of 1.1 million scared mainland companies away. But those factors also shielded Hawaii’s retailers from the fierce competition that claimed some of the mainland’s biggest department store chains over the past decade.

When Hawaii residents visited the mainland, they would take an empty suitcase and stock up on school clothing and other major purchases at the discount malls that populated every large city.

In the late 1980s, Kirkland, Wash.-based Costco bucked the trend and opened its first outlet in Pearl City, a Honolulu suburb. It quickly became the retail chain’s most profitable operation. Wal-Mart, Kmart, Ross Stores Inc. and Eagle Hardware followed with similar success. Last month, Wal-Mart opened three new stores in Hawaii--one in Honolulu and two on the island of Hawaii.

Indeed, Leroy Laney, an economist with First Hawaiian Bank, predicts some of the discounters will pull up stakes because the Hawaii market is becoming saturated, particularly on the neighbor islands. But he said the influx of the mainland giants has been good for locals and has provided a boost to the island’s tourist economy.

“This is no big deal for mainland tourists to find a Kmart,” he said, “but the Japanese are kind of starved for it.”

Dolores Hansen, a Honolulu-based shopping center consultant, said she has seen a dramatic shift in Japanese buying habits over the past decade. Brand names are still the ultimate draw. But price is also a factor. Coupons, once considered an embarrassing admission of poverty, are now chic among the Japanese. “They really think they’re getting a bargain, and that’s the American way,” she said.

On the days that the Japanese tour buses roll out to Waikele, Robert Tyler, a customer service representative at the Sports Authority outlet, braces himself for lines of Japanese customers stretching from the counter to the rear of the store. Their purchases, which can add up to several thousand dollars, include everything from Ray-Ban sunglasses to fishing poles. “They’ll buy 30 T-shirts at a time with Hideo Nomo on them,” Tyler said.

Some Japanese tourists are leaving these discount stores empty-handed, confronted with the bare shelves and empty hangers that are evidence of a tour bus invasion. The Fukumotos could only find a couple of sets of Laura Ashley sheets, which sell for $9.99 to $19.99 at Home Outlet and are twice as much in Japan.

Akiko Yukizaki, 23, a Japanese insurance company employee, also came away from Waikele with far less than she had hoped for. She wanted a new swimsuit and a pair of Ferragamo shoes but couldn’t find anything small enough. Instead, she bought several kitchen utensils.

For some, the prices are just too good to pass up. Hansen, the marketing consultant, tells the story of a friend who took a Japanese visitor to the Levi’s outlet, where he bought several pairs of jeans. Her friend expressed surprise that the small-framed man was able to find jeans in his size.

“Too big, but cheap,” was his reply.