Japan Hotel Occupancy:

 https://mainichi.jp/english/articles/20210130/p2g/00m/0bu/020000c

Article:

TOKYO (Kyodo) -- The number of people who stayed at hotels and other accommodation facilities in Japan plunged 48.6 percent in 2020 from a year earlier to a record low, government data showed Friday, as entry restrictions into the country were imposed and domestic travel demand was dented due to the coronavirus pandemic.

The cumulative total of hotel guests stood at 306.18 million, the lowest since comparable data became available in 2007, according to the preliminary data released by the Japan Tourism Agency. The figure includes people who may have been counted twice or more.

Although hotel occupancy improved at one point due to the government-subsidized "Go To Travel" campaign begun in July to boost the virus-hit domestic tourism sector, data showed the program could not weather the impact of the virus on stays at accommodations.

Ideas:

Its not surprising that the hotel occupancy rate decreased in 2020. But what's even more surprising is the actual number of those who did stay in hotels at  306.18 million.

Since are are only about 125 million people in Japan, it seems there were some who stayed at hotels more than once.

But as I survey websites such as Jalian.net it seems some hotels have really lowered there prices and some seem to have kept their prices almost the same.

For example the hotels that cater to the average business person have lowered their prices but those that target the upper middle class or the wealthy have not lowered their prices.

Most likely the higher prices hotels want to maintain their image as a higher prices hotel that targets the rich and the upper middle class.

Article:

The government halted the program on Dec. 28 as a resurgence in infection cases since November took a toll on the tourism industry. With no prospects for restarting the campaign, a growing number of hotels are being forced to close temporarily or go out of business.

In 2020, the cumulative total of domestic guests stood at 288.10 million, down 40.0% from a year earlier.

The number of such guests fell 81.6 percent in May from the same month the previous year before trending upward until November, which saw a smaller drop by 16.1 percent.

Ideas:

For example one hotel which I used to use a lot when I traveled to Yokohama, kept several of its hotels closed in the Yokohama area.

Most likely these might have been used for those who needed to isolate because of the virus situation.

And when looking at the hotel webpage and reservations for those that were open, they were special rates for those who wanted to use the hotels during the day, for example for telework and so on instead of going to their office.

But now it seems as of March 1 all of the hotels, of this hotel chain will be open for bookings.

However, as I check each hotel site for those staying, it appears there is no one staying at any of this companies hotels until mid April.

Of course not having a million Chinese tourists arriving each month has not been good for the hotel industry.

Article:

But the figure for December dropped 24.4 percent to 28.69 million, marking the first time in four months the rate of decline expanded, likely due to the suspension of the travel subsidy program and people refraining from making business trips in the wake of Japan's third wave of the pandemic.

As for foreign guests, the annual figure fell 84.4 percent to 18.08 million because of virus-induced travel curbs by Japan and other countries.

Ideas:

Maybe during the "Go to Travel" program there were more business people out and about traveling as they felt is was safe to travel around the country.

And then the program was suspended and people stopped traveling again.

As a previous article has stated most of those 18.08 were in January and February of 2020 and not much after that.

The hotel industry, whenever the virus ends has a long way to go to get back to normal, if ever.

But in the meantime, the government should do everything possible to help the tourism and hotel industry survive.

This is not the time for the common economic saying of "let the market" decide who will survive and who will die.

This is not normal times. Governments need to step and help as much as possible.

Have a nice day and be safe! 

Toyota Sales:

 https://mainichi.jp/english/articles/20210128/p2g/00m/0bu/071000c\

Article:

NAGOYA (Kyodo) -- Toyota Motor Corp. group ranked top in global auto sales in 2020 for the first time in five years on a robust pickup in sales in China and the United States, overtaking Volkswagen AG of Germany, data showed Thursday.

Toyota said it sold 9.53 million vehicles globally last year, including those sold by its group's minivehicle maker Daihatsu Motor Co. and truck manufacturer Hino Motors Ltd., down 11.3 percent from a year earlier.

The Japanese auto giant, however, suffered less of an impact from the coronavirus pandemic than other carmakers.

Ideas:

Perhaps consumers in the China and the US felt they needed a new car despite the pandemic and went ahead and purchased a new car.

And or Toyota was able to offer enough incentives to that motivated new car buyers to go ahead a purchase a new car.

And perhaps other car companies either didn't have the same incentives as Toyota and or were unable to match the possible incentives that Toyota offered.

Article:

Toyota's global annual sales logged their first decline in five years, after they fell sharply in the April-June quarter due to the worldwide economic fallout from the pandemic.

However, sales recovered in its main markets such as China and the United States from the fall, posting three consecutive months of increase from October, Toyota said.

A Toyota official said the company's aggressive sales strategy, which saw it roll out a series of new models, contributed to relatively solid sales in 2020 compared with other automakers.

Ideas:

Perhaps the pandemic forced consumers to postpone buying a new car in the Q2 and Q3 but by Q4 pent-up consumer demand could wait no longer and might have been buying spree in Q4.

And then again too, Toyota may have rolled out some new models and some new sales strategies to entice consumers who were waiting to buy a new car.

But you never know exactly the reasons for the increase in sales. Mostly a combination of factors; pent-up demand, new models, and aggressive sales strategies all contributed to the increase in sales in Q4.

Article:

"Our sales dropped from a year earlier amid the pandemic, but the decline was limited to around 10 percent level," the official said.

In 2020, the Toyota group sold 2.16 million vehicles including minicars in Japan and 7.37 million in overseas markets, while producing a total of 9.21 million units worldwide, down 14.1 percent from the previous year.

Toyota alone sold 8.69 million cars, down 10.5 percent, while production decreased 12.6 percent to 7.91 million vehicles.

Ideas:

A 10 percent dropped, while not good, is most likely not as bad for a large company as some smaller companies.

The only problem might be some shareholders who only think about short-term stock dividends instead of looking at the big picture.

Even a 12.6 decrease in production, while not good, could have been worse. But looking at big picture and long-term a one year drop is not going to affect Toyota that much. 

It might of course have an affect on smaller or medium sized businesses who don't have the same resources as a Toyota does.

Article:

Meanwhile, Volkswagen's global sales last year fell 15.2 percent to 9.31 million vehicles.

The total sales of the three-way alliance of Nissan Motor Co., Renault SA and Mitsubishi Motors Corp. stood at 7.8 million vehicles, down 23.2 percent, due to its slower sales recovery in its main auto markets including the United States and Europe.

Nissan's sales plunged 22.2 percent to 4.03 million vehicles after it abandoned the expansionary production strategy of former Chairman Carlos Ghosn.

Renault's sales fell 21.3 percent to 2.95 million units, while Mitsubishi logged a 33.1 percent decline to 819,904 vehicles.

The combined auto sales of Japan's eight major automakers sank 15.9 percent to 23.49 million vehicles, with all manufacturers posting declines amid the pandemic.

Ideas:

First how much does brand value have an affect during something like a pandemic, meaning do consumers think of the brand more or less during a pandemic.

For example Mitsubishi dropped 33.1 percent in terms of vehicles sold. Is this related to brand image or is it related to sales strategies, the price of cars etc. Or 

Of course Nissan is an entirely different story as it might still be feeling the affects of the Ghosn saga and maybe also in the future. But do consumers really care about it.

The Japanese auto industry saw a decrease but it could have been worse. But what is always very interesting is the idea that there are still eight major automakers in Japan, while in many advance countries there might be at most three or four. 

Its says something about how Japan does business as we "we aren't going to force you out of business, there is room for everyone."

Have a nice day and be safe!

Deflation and Slow Wage Growth:

 https://mainichi.jp/english/articles/20210127/p2g/00m/0bu/014000c

Article:

TOKYO (Kyodo) -- A return to deflation is a nightmare scenario for Japanese policymakers after years of arduous efforts to prevent prices from falling, but the coronavirus pandemic is raising fears that it may become a reality.

The Japanese economy is increasingly facing downside risks following a second state of emergency declared over the novel coronavirus that will be in place until Feb. 7 in Tokyo, Osaka and some other populous areas, hitting demand especially in the services sector.

With annual wage negotiations between management and labor unions getting into full swing in February and March, companies appear reluctant to raise pay after a difficult 2020 and ahead of an uncertain 2021.

Ideas:

While deflation might not seem a positive for an economy, it might be such as bad thing in the pandemic period. As businesses try to survive, a temporary reduction in prices might be needed for some businesses to survive if the subsidy they are getting is not enough for them.

Most likely businesses don't want to reduce prices and it will reduce their profits, but at the same if its needed to attract customers then maybe they have no choice if they can do it.

Company employees while always wanting and most probably needing a salary increase at this point probably recognize the companies might not be in the position to give a raise at this time.

Article:

Tepid wage growth bodes ill for consumption, a key component of the economy, as households would become even more cautious about spending.

Economists say there is also a question mark over how fast and by how much demand will recover once the current resurgence of coronavirus cases is brought under control.

"The battle to prevent deflation is only beginning," said Shunsuke Kobayashi, chief economist at Mizuho Securities Co. "We have not stepped into the (deflation) zone. But inflation expectations have been weakening and it's hard to predict prices will follow an upward trend now."

Ideas:

Wage increases are always an important part of an economy. So much so that the Bank of Japan and the government has been encouraging Japanese companies for years to use the huge cash savings they have and give salary increases to their employees as a way to increase consumer spending in the economy.

Yes, a very good observation regarding how fast can demand return to the pre-pandemic level or some kind of "new normal" in demand.

And correctly no one really knows how long it will take for the Japanese economy to get back to some kind of normal or even a "new normal."

And at the same time an economy does not grow and or recover at the same rate. An economy is very complex and has many different players, meaning not all businesses or even sectors grow equally and or even can get back to normal equally.

While some businesses and sectors might come back quickly there might be just as many that will not not come back very quick and some maybe not at all. 

Article:

In December, Japan's core consumer prices plunged 1.0 percent from a year before, marking the steepest fall in over a decade and the fifth straight month of decline.

Prime Minister Yoshihide Suga's drive to spur domestic tourism, reeling from the pandemic, through a subsidy program and to achieve substantial cuts in mobile phone fees by major carriers are seen as negative for the CPI, a gauge of inflation.

At the same time, Suga has stressed the importance of pay hikes this year to prevent Japan "at any cost" from reverting to deflation.

Ideas:

While 1.0 percent doesn't seem that much but when it involves trillions of yen it can be a lot in the economy. But the positive side was that it could have been worse.

The "Go to Travel" strategy was probably a good idea and or attempt to spur economic growth but no one expected a resurgence in the pandemic situation.

While decreases in mobile phone fees by some might see it as a negative for the CPI, it might be a positive for consumers who need or want lower mobile phone fees. 

And the positive side of it they can now they the savings from the reduction on phone fees and use it on other things in the economy and some of course might use it for savings.

Pay hikes sound good and are probably needed but how many companies can really afford it.

But at the same time, it has been reported that many companies have kept salaries low just in case the economy hits a not so good period like now in order to be able to retain their employees with a large cash savings which can be used in periods such as this if sales and such decrease and they don't have to resort to laying off employees and or reduce empoyee salaries.

Article:

After a 0.5 percent fall in the current fiscal year through March, the core consumer price index excluding volatile fresh food is predicted by the Bank of Japan to rise 0.5 percent in the upcoming year.

The projection is viewed as rather upbeat as planned fee cuts by major mobile carriers have not been factored in. Taking heed of government pressure, NTT Docomo Inc., KDDI Corp. and SoftBank Corp. have announced cheaper options for data usage, starting in March or April.

Downward pressure on prices is building as the BOJ is reviewing its policy tools now that the spread of the coronavirus has pushed its 2 percent inflation target further away.

Ideas:

Like the 1.0 percent above and 0.5 percent doesn't seem like much but again when you are taking about trillions of yen it can be a substantial drop for the economy.

However, a 0.5 percent increase in the upcoming year is just as big as a 0.5 percent decrease.

Yes the BOJ sometimes likes to take a somewhat positive view but most central banks will do the same thing. 

Even with the expected phone cuts, a 0.5 percent still seems reasonable if the Japanese economy gets back to some kind of normalcy or even a "new normal" for a post-pandemic era.

The BOJ has been pushing the idea of a 2 percent inflation target for many years. Maybe now is not the time to be concerned with a 2 percent target.

Perhaps now it the time to think about helping businesses survive the pandemic and then when economic activity can get back to some kind of normal then begin to re-focus on the 2 percent goal.

Article:

BOJ Governor Haruhiko Kuroda views low crude oil prices and the "Go To Travel" campaign as "temporary" factors weighing on the CPI and has not sounded the alarm.

"Consumers are intentionally reducing (the use of) face-to-face services to prevent infections now, which is different from falling demand under normal times," Kuroda said after a two-day policy meeting in January. "We have to bear in mind that under such circumstances, companies would have little incentive to draw demand with price cuts."

"At present, we don't think the risk of deflation is extremely high," the governor said. In deflation, prices continue to fall.

Ideas:

For the most part the reduction in oil prices should not be too much or a worry as it might just be a temporary situation. And the "Go To Travel" program too as it provides subsidies and as such can't be used as a true indictor of the actual or potential consumer spending taking place in the economy.

Of course consumers are intentionally reducing face to face services as much as possible to prevent infections and as such the present level of consumers spending on goods and or services can't be compared to pre-pandemic spending on either.

And yes, companies might try to reduce prices as an incentive to get more customers but if consumers/customers are too worried about face to face meetings no amount of price reductions is going to entice customers to return at this time.

Yes there might be some continued deflation, but in these not so normal times, it might just be a situation that can at best just be managed and not try to come up with strategies to reduce it completely, meaning just let deflation run its course but keep a careful watch on it.

Article:

Economic activity has yet to return to normal as people are urged to stay at home and restaurants requested to close at 8 p.m., while 11 of the country's 47 prefectures are under the state of emergency.

The current state of emergency is limited compared with the nationwide one in the spring of 2020. Japan's output gap, a gauge of supply and demand, was negative for the second straight quarter in July to September, according to BOJ data.

In the aftermath of the collapse of U.S. investment bank Lehman Brothers, the Japanese government started to use the term deflation in its monthly economic report in November 2009 and continued to use it until December 2013.

Ideas:

Complete and full economic activity might not return for a long time. Even though it seems, for example, where I used to travel to before the pandemic, the Yokohama eki area and Sogo, might seem like there is a lot of people/customers, overall, from what I've been told the numbers are somewhat down even now.

In the spring of 2020 I would often look at on You Tube Shibuya crossing and noticed that there were almost no one crossing the roads. But today it seems like SC is always very crowded. 

That doesn't mean people are actually shopping. It most likely means people have learned how to protect themselves during the continued pandemic.

And or they are just tired of staying at home and want to be out and about.

Yes it could it should be no surprise that the July to September period would be less than the previous year.

Article:

Some retailers have already offered cheaper products to help households, including supermarket operator Seiyu G.K. that last year cut prices on over 700 daily necessities by some 5 percent on average.

The focus is now on how companies will tackle this year's "shunto" wage talks because the outcome would affect people's mindsets and the prospects of Japan reverting to deflation.

Suga's predecessor Shinzo Abe repeatedly asked companies to raise wages during his time in office that ended last year. This year, many companies have seen their earnings severely hurt by the global health crisis and base pay hikes would be difficult, according to economists.

Ideas:

Its nice when companies see more than just their bottom line or profits in this pandemic era. The cutting of prices on daily necessities is a very nice example of how companies can help during the pandemic situation.

It might be very difficult for some or many companies to give salary increases this year. Salary increases has always been seen as a positive and more importantly can influence consumer sentiment or feeling as to whether the salary increase is enough to make them feel good about spending some of it in the economy.

And the reason Abe was able to ask many companies to raise salaries was because many companies were sitting on huge cash savings and not using the cash to increase salaries of their employees which in turn might be used in the economy to increase consumer spending which might help increase inflation, which can sometimes be seen as a good level of economic activity taking place in an economy.

Article:

The Japan Business Federation, the country's most powerful business lobby also known as Keidanren, has said it is "unrealistic" to expect pay increases across the board.

For the current fiscal year through March, big companies in both the manufacturing and nonmanufacturing sectors expect pretax profits to plunge 34.6 percent from a year ago, according to a BOJ survey.

"The extent of damage (to earnings) from the pandemic is different among companies, but the overall push on the part of labor unions calling for base pay hikes will be rather weak," said Yoshiki Shinke, chief economist at the Dai-ichi Life Research Institute.

Ideas:

Some companies might be able to give some kind of salary increase but will they. If many companies are not able to then maybe even those who can might not do it.

Labor unions most likely see the current economic situation and as such realize the chance of getting a salary increase is not likely.

Some might even think " we are lucky to even have a job now" so why ask for a salary increase.

Article:

Management and labor unions would pay more attention to maintaining employment and avoiding pay cuts this year, with workstyle reforms another key agenda item.

Annual wage negotiations would result in a 1.86 percent pay increase among major Japanese companies covered in a government survey, falling below 2 percent for the first time since 2013, according to Shinke. The figure for 2020 was a rise of 2.00 percent.

Economists say changes to basic pay and consumption have strong correlations. "It's the basic salaries that will determine the path forward (for households)," 

Ideas:

The ideas of just maintaining employment is probably what most employees are thinking now and not so much of a salary increase

If they got even a small raise they might be happy but it probably is not enough to go out and spend on things except for maybe daily necessities.

Even 1.86 percent is better than nothing and most likely can just be used for some daily products and not much else.

An 1.86 percent increase of course is not going to spur any kind of consumer spending spree in the present of future situation.

Have a nice day and be safe!

Japan Dept. Store Sales:

 https://mainichi.jp/english/articles/20210123/p2g/00m/0bu/013000c

Article:

TOKYO (Kyodo) -- Department store sales in Japan in 2020 dropped a record 26.7 percent from a year earlier, sinking to its lowest level since 1975 due largely to dried-up demand from inbound visitors during the novel coronavirus pandemic, an industry body said Friday.

Sales by all department stores totaled 4.22 trillion yen ($40.73 billion), the Japan Department Stores Association said. The decline was the largest since comparable data became available in 1965. Sales on a same-store basis sank 25.7 percent.

The sharp drop came as stores temporarily closed during the state of emergency declaration last April and duty-free sales dived 80.2 percent from the previous year, the association said.

Ideas:

Its amazing that in just a few short years, since the government revised in immigration policies to allow more tourists from Asian countries and especially China, that some or many department stores in the Tokyo area became almost completely dependent on international tourism to survive.

Of course the closing of stores in April of 2020 didn't help but at the same time, a 90+ percent drop on tourists from China didn't help either.

It just  shows, yes difficult, how department stores need to diversify their customer base, and if possible not rely on one group such as Chinese tourists who seem to really like Japanese products.

But of course that is easier said than done and how can a department store really diversify?

Of course, if not already doing or implementing, department stores need to have more of an online presence. And even more, if possible, have a online presence in Chinese and English as possibly Chinese customers might actually buy from the Japanese department stores while they are in China.

And then the department stores need to collaborate with logistics companies to get the Japanese products to China in a timely manner.

I'm sure the department stores have thought about all of this already.

Article:

Sales at stores in 10 major cities including Tokyo and Osaka on a same-store basis tumbled 28.1 percent, while those in other regions dropped 19.4 percent.

By product, clothing sales sank 31.1 percent as demand for suits and dresses shrank due to increased teleworking.

Sales of luxury products, such as artwork and jewelry, fell 22.8 percent. The decline was not so large compared with other products as wealthy individuals apparently spent money on luxury products instead of on traveling due to the pandemic.

In December alone, sales on a same-store basis fell 13.7 percent from a year earlier. The decline was smaller than that in the previous month due partly to strong demand for "osechi" New Year dishes as the pandemic forced people to spend more time at home.

In the first 18 days in January, sales at 41 major department stores sank about 35 percent due partly to shortened business hours after the second state of emergency was declared in early January.

Ideas:

Most likely sales at department stores will continue to decline for the time being, until consumers feel more positive about the future.

For the time being though, consumers are worried about jobs, income etc. and not as interested in going to brick and mortar department stores.

They might however, if they have some extra income to spend, might shop online for products and services they might need or want from departments stores.

So again, to try and regain lost sales or lost customers department stores, like other places such as restaurants, supermarkets, and other places need to have the best online presence with as many products available for online purchases.

And then of course collaborate with as many logistics companies as needed to make it easy for consumers to get the products the want in a timely manner.

Unfortunately, but not completely, consumer shopping might be heading to a substantial presence online instead of shopping in a brick and mortar store.

However, the idea that an Amazon or Rakuten can completely replace the brick and mortar shopping experience is unrealistic as consumers want to be in stores, be around other consumers/people, and want the personal customer service at times.

So most likely a blending or a balanced consumer shopping experience, for consumers as they want; sometimes online shopping experience  and sometimes a brick and mortar shopping experience.

But department stores need to be able work in both modes in order to maximize customer sales. 

Japan Consumer Price Index:

 https://mainichi.jp/english/articles/20210122/p2g/00m/0bu/038000c

Article:

TOKYO (Kyodo) -- Japan's core consumer prices dropped 1.0 percent in December from a year earlier, the steepest fall in over 10 years, due largely to lower energy prices and the government's travel subsidy campaign amid the coronavirus pandemic, official data showed Friday.

Nationwide core consumer prices, excluding volatile fresh food items, logged the largest drop since a 1.1 percent fall in September 2010 and declined for the fifth straight month, according the Ministry of Internal Affairs and Communications. The core consumer price index fell 0.9 percent in November.

In 2020, the core CPI dipped 0.2 percent on average, marking the first decrease in four years and remaining far below the Bank of Japan's 2 percent inflation target.

Ideas:

The core consumer price index can be very complex to see how it might actually affect the "real word" of an economy, as it can include many different areas and sectors.

The idea of lower energy prices might be that suppliers, when there is a rise in oil prices, might "pass on" the higher oil prices to their customers, but when the prices remain low, then maybe the customers of the suppliers also will see lower prices.

The idea of lower prices of course can be b both a positive and a negative. It can be a positive and negative to the suppliers as maybe they don't have to pay higher prices for the supply and then maybe a negative as they don't get or charge a higher price to their customers.

Of course the customers are happy that they don't have to pay a higher price for the oil.

Fresh food prices can be very volatile, meaning prices can change easily a lot depending on variables such as weather, the growing season, the supply available and so on.

Once again the Bank of Japan is kind of focused on the 2 percent inflation rate, while it should be focused on keeping or helping people keep their jobs and not focus or worry about the 2 percent inflation rate until the economy back to normal after the pandemic is finished.

Article:

BOJ Governor Haruhiko Kuroda on Thursday shrugged off concerns that the Japanese economy could slip into deflation.

"Recent falls in the CPI are temporary as they have resulted from lower crude oil prices and the travel subsidy program," he told a press conference following the central bank's two-day policy meeting, adding that the risk of deflation is "not high."

"The yearly fall is largely attributed to lower crude oil prices amid the global coronavirus pandemic and the government's free preschool education program launched in October 2019," a ministry official said.

Ideas:

Yes the CPI can be very cyclical and or cycles related to what is called the "business cycle", meaning the economy always goes temporary period of ups and downs.

Yes there are many factors that might affect prices and even deflation, as deflation is always on the Bank of Japan's area of concern.

And of course, in many cases, central banks globally try to communicate a positive tone as a way to show confidence in the economy.

Because if they too negative in their communication about the economy, then there is the potential for stock markets, not just in Japan but globally to react negatively.

For example, what happens on the NYSE, the New York Stock Exchange can have direct affect with the Japanese stock market, whether positive or negative related to the NYSE the same thing will happen globally.

Article:

In December, electricity and gas bills fell 7.9 percent and 9.5 percent, respectively, reflecting lower energy prices in the first half of 2020.

Gasoline prices lost 8.9 percent due to falling crude oil prices in the reporting month, while prices for kerosene products dived 14.4 percent.

Accommodation fees plunged 33.5 percent from the previous year due to the "Go To Travel" subsidy program, the government's bid to revive the domestic tourism industry hit hard by the pandemic.

Ideas:

Exactly! The overall decrease in oil prices is seen across the board relate to business consumers or family consumers having to pay lower prices.

Of course may oil company suppliers might not be happy, but at the same time, they might be able to make up for it with consumer actually using more, as the price of electricity and gas is lower, meaning maybe they will use the electricity and gas more than usual, when the prices are higher, for the consumers, they might actually cut back on their use.

Supposedly the "Go to Travel" program pay as subsidy to either the travelers or the hotels as an incentive to increase domestic tourism.

Of course the idea was good idea to stimulate domestic tourism but no one expected an increase in the pandemic situation or a big of an increase.

Article:

The survey was conducted Dec. 4 and 5, before Prime Minister Yoshihide Suga halted the nationwide travel campaign in late December due to a resurgence of virus infections across Japan. The program effectively lowered the CPI by 0.4 percentage point in the month, the official said.

"Weak consumption in the services sector put pressure on overall prices, as people refrained from traveling and having parties in the year-end and New Year holidays following a resurgence of virus infections," said Takeshi Minami, chief economist at the Norinchukin Research Institute.

"COVID-19 vaccinations could revive demand if proven to be effective, but it remains unclear whether consumption will recover to the pre-pandemic level," he added.

So-called core-core consumer prices, which exclude fresh food and energy items, dropped 0.4 percent in December from a year before, marking the third straight month of decline.

Ideas:

The services sector, of course, has been affected the most by the virus situation. Anything from restaurants, travel companies, airlines, hotels, etc all have been heavily affected along the thousand and thousands of small businesses in the service sector.

The Bank of Japan and the Japanese government needs to and do focus on helping as many businesses as they can, and of course the are trying to do it.

And of course this is not the time to "let the market" decide the fate of all the businesses that are affected by the virus situation.

Have a nice day and be safe!

Japan Supermarket Sales:

 https://mainichi.jp/english/articles/20210122/p2g/00m/0bu/024000c

Article:

TOKYO (Kyodo) -- Japan's supermarket sales in 2020 rose 0.9 percent from the previous year on a same-store basis, increasing for the first time in five years on higher food sales, as more people ate at home during the novel coronavirus pandemic, an industry body said Thursday.

Sales at supermarkets, including newly opened ones, operated by 56 companies totaled 12.76 trillion yen ($123.34 billion) in 2020, up 2.6 percent, according to the Japan Chain Stores Association.

While food sales on a same-store basis climbed 4.7 percent, those of clothing dropped 16.9 percent, as increased teleworking caused demand for business suits to decline, the association said.

The year's rise was partly trimmed by a decline in overall private consumption as sales in 2019 were partly lifted by a temporary spending increase ahead of the nation's consumption tax hike from 8 percent to 10 percent in October that year.

"The trend of consumers trying to save money and protect lives will continue under the new life style of living with the new coronavirus," an association official said in a press conference.

In December alone, supermarket sales rose 2.7 percent from a year earlier on a same-store basis for the third straight month of increase.

Ideas:

Its only logical that supermarket sales would increase during the pandemic period, and very logical that consumers were avoiding going to restaurants.

Of course there is also the idea that maybe some workers were working at home and didn't go to restaurants near their place of work and or wherever they go after work.

And it logical that clothes stores would see a drop in business suits. But at the same time maybe sales at Uniqlo or GU might have increased as consumes opted for more relaxed clothes that they could wear at home.

Yes, the idea maybe that consumers overall might be down because of the pandemic situation and the worry about jobs and incomes. 

The increase from last year of course was the decrease 2019 due to the sales tax increase from 8 percent to 10 percent. So its only natural that there might have been a slight increase from a year ago despite the worries about the pandemic situation.

Supermarket sales most likely will continue to increase and of course as restaurants innovate they will be begin to offer more online orders for takeout and delivery as a way to survive.

Its possible, it not already, supermarket will begin to have an online presence related to offering pickup service and delivery services as a way to boost sales.