Mainichi: Japan Department Store Sales:

https://mainichi.jp/english/articles/20200324/p2g/00m/0bu/088000c

Article:

TOKYO (Kyodo) -- Department store sales in Japan are likely to drop 40 percent in March from a year earlier, by far the largest margin on record, partly due to a plunge in the number of foreign visitors due to the outbreak of a new coronavirus, according to industry body data released Tuesday.

Comments and Ideas:

Yes the virus situation has definitely hit department store sales in Japan, especially in the major metro areas where there are/used to be a lot of foreign visitors. How the department stores can overcome this situation is not an easy task to solve.

Article:

Duty-free purchases are also expected to plunge 80 percent in the reporting month, the Japan Department Stores Association said.

Until now, the record-high fall in same-store sales was 20.8 percent recorded in March 1998.

Same-store sales decreased 12.2 percent in February for the fifth straight month, with the total number of customers falling about 10 percent on year as many people in Japan refrained from going out, the association said.

The number of duty-free customers in the reporting month dropped 68.3 percent to 134,000 after China, at the center of the coronavirus epidemic, banned all outbound group travel on Jan. 27. Duty-free purchases were down 65.4 percent.

Comments and Ideas:

Most if not all major department stores in Japan, with duty free sales, have of course, become very dependent on foreign tourists, and of course most of them from China.

At the same time,  Japanese consumers in February also began to cutback on their shopping/spending at department stores too.

How this is going to play out in the future remains to be seen. Especially now, like in Tokyo and maybe eventually in Osaka and other metro areas, they are calling for even more "social distancing".

Article:

Department stores are among many industries in Japan highly dependent on spending by customers from China.

"The magnitude of the adverse circumstance we are under is worse than the financial crisis following the 2008 failure of Lehman Brothers Holdings Inc. and the 2011 earthquake and tsunami in northeastern Japan," said Shigeki Yamazaki, managing director at the association.

Comments and Ideas:

We are now seeing just how some business are maybe overly dependent on foreign tourists, especially Chinese tourists. As Japanese consumer spending is always a challenge for the Japanese economy, The  relaxing of tourist visas, especially related to many Asian countries like China, has been an economic boom to many businesses in the metro areas in Japan. But we are now seeing just how volatile the tourism industry is. Of course not only in Japan, but now its a global challenge.

Article:

The sales of 206 department stores, operated by 75 companies, totaled 366.1 billion yen ($3.3 billion) in February.

The sales drop was also attributed to weaker demand for winter clothing due to warm weather, the association said.

Sales of clothing fell 15.9 percent and those of cosmetic items decreased 26.4 percent.

Comments and Ideas:

Any time there is a change in the weather conditions than what was expected we see changes in consumer/shopping patterns, such as the buying of less winter clothing. It has been reported that many areas in Japan, that usually receive a lot of snow have received much less now this year. And then add in the areas where there is no snow, but just warmer weather than usual, so the clothing and fashion industries maybe saw sales much less than expected.  The decrease in cosmetics is an unknown as cosmetics are usually an industry that doesn't see much in fluctuations from season to season.

Article:

In separate data, sales at supermarkets in Japan rose 4.1 percent in February from a year earlier on a same-store basis for the first increase in five months, thanks to firm demand for food and commodities as coronavirus fears prompted consumers to spend more time at home.

Sales at 10,548 supermarkets operated by 55 companies totaled 937.6 billion yen, the Japan Chain Stores Association said.

Food sales in February increased 5.8 percent from the previous year as rice, frozen and preserved food items drew demand as shoppers braced for the viral outbreak to escalate.

Sales of household goods grew 1.6 percent, while those of clothing fell 3.9 percent.

Comments and Ideas:

In February, as the virus situation started to increase, Japanese consumers may have decided to begin stock up if not begin to horde certain products, as has been reported in the past month or so. The increase in rice, frozen food would naturally have seen an increase as consumers were stocking up to make sure they didn't have to go back to many times to a supermarket, if thing began to get worse.

And now with Tokyo, and most metro areas beginning to call for even more "social distancing" there might be more shopping at convenience stores than regular supermarkets in the future.

Everyone have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved