Japan Supermarket Sales Still Weak:

https://mainichi.jp/english/articles/20200226/p2g/00m/0bu/103000c

Article:

TOKYO (Kyodo) -- Japan's supermarket sales showed a fourth consecutive monthly fall in January, remaining pressured since the consumption tax hike last year, while a warmer-than-usual winter caused many vegetables to grow faster and their prices to decline, an industry body said Wednesday.

Comments and Ideas:

I usually tend to be positive about the Japanese economy and considered the 8 to 10 percent sales tax event to have a short to at least most medium term affect on the economy. Perhaps what we are seeing is the medium term affect. But at the same time, this might not be normal circumstances, and with any country and any situation. the news is getting gloomy, which can have an affect on consumer confidence, and as a result consumer might begin to think twice about their normal everyday consumer spending, such as at supermarkets.

However, with normal supply and demand, whenever there is a so-called surplus of a product, which might have been caused with a warmer-than-usual winter, prices will tend to decrease as the more supply than expected suppliers need to sell more than usual, and as result reduce the price of the product to lower supplies. And as such maybe the lower prices might have been enough or an incentive for consumers to buy more, meaning more sales, but maybe that didn't happen in this situation, and maybe Japanese consumers have now become even more price conscious than they already were.

The idea that these two different events can cancel each other out is not exactly a good way of thinking, but lower prices can sometimes means higher sales, or act as an incentive for consumers to buy more. But this might not have been the case. Other factors are definitely in play here.

Article:

Sales in the reporting month declined 2.0 percent from a year earlier on a same-store basis, according to the Japan Chain Store Association.

Sales at 10,543 supermarkets operated by 55 companies totaled 1.00 trillion yen ($9.1 billion), the association said.

The data reflected the country's sluggish personal spending since the consumption tax was raised in October to 10 percent from 8 percent and the effect of the warm winter on sales of food, the main revenue source for supermarkets.

Comments and Ideas:

The idea of a 2.0 percent decline from a year earlier is not as bad as it could have been. What remains to be seen is what the overall Q1 will be now with the virus situation fully in play. How much will consumers really but back on supermarket spending. The cutbacks maybe in restaurants and department stores maybe can be expected, but supermarkets and convenience stores are related to everyday needs and everyday products. Perhaps the decrease related to the virus situation won't have a huge affect on supermarkets compared to department stores and restaurants.

Article:

Food sales in January declined 0.1 percent from a year earlier on the same-store basis. Sales of clothing fell 8.0 percent, and those of household goods sagged 6.2 percent, the association said.

An association official said the impact on supermarket sales of the coronavirus spread appeared to be limited in the month, but added, "There are fears of consumer sentiment being further cooled" if the economic fallout from the virus lingers.

Comments and Ideas:

If related to supermarkets, then the 0.1 percent decrease may not be that big of a deal. While the decrease in sales of clothing might be as the prices for clothing are higher, and as such maybe consumer have become a little more price conscious about clothes. However, it should be noted, the winter was rather mild in most parts of Japan, and as such, it would be expected that maybe clothing sales were less than the year before. The decrease in household goods, whatever they mean exactly, maybe consumer have become a little more price conscious on these items too.

Yes consumer sentiment is a challenge if the virus situation becomes even more prevalent in Japan, as consumers, besides the hording of certain products, such as paper type products, maybe might begin, if not already, to do less supermarket shopping to avoid crowded places.

Which means, online supermarkets and other online shops of everyday things might dramatically pickup and see sales of these places grow substantially in the future.

In any economy there are positives and negatives. Unfortunately the virus situation and consumer sentiment maybe not so good to go out and go to crowded supermarkets, it might be a positive for online shops.

© 2020, Tom Metts, all rights reserved