Japan April Industrial Output:

 https://mainichi.jp/english/articles/20210531/p2g/00m/0bu/018000c

Article:

TOKYO (Kyodo) -- Japan's industrial output in April rose 2.5 percent from the previous month, with the index of production at factories and mines exceeding the level before the coronavirus pandemic, government data showed Monday.

The seasonally adjusted index stood at 99.6 against the 2015 base of 100, above the 99.1 registered in January 2020 before the global spread of COVID-19, the Ministry of Economy, Trade and Industry said in a preliminary report.

Ideas:

Quite possible the level exceeding before the pandemic was a lot of back orders and or bent up demand finally being filled.

Japan's industrial output increase in April of course was business sentiment improving meaning businesses were feeling better about the future.

But at the same time, no index is perfect and its only an estimate at what businesses might be feeling, but its never an exact measurement, as businesses themselves can't predict exactly what they are going to do 6 months down the road.

Article: 

The figure marked the second straight monthly rise, following a downwardly revised 1.7 percent increase in March. A ministry official said firm demand for capital investment abroad led to robust output in sectors related to machinery and information technology.

The April index hit the highest level since September 2019, before Japan's consumption tax was raised from 8 percent to 10 percent, the data showed. After being battered by the emergence of the coronavirus pandemic, production has been on a gradual recovery trend since June last year.

The ministry retained its assessment of the data, saying industrial output is "picking up."

Ideas:

Indexes are never a 100 percent accurate measurement concerning what companies might think or what they might do, but indexes do try to guess or guesstimate what might be happening.

A guesstimate is nothing more than trying to figure out what is going on or what might happen, thus the emphasis on the word guess.

It was very interesting during the 2019 fall period, as a lot of happening during that time. There were the typhoons that through Japan, the Kanto region, and especially the Chiba area was hit hard.

Then there was the constant talk/buzz everywhere in Japan about the sales tax hike from 8 percent to 10 percent. There was a lot news on the media, speculating about the sales tax hike, and consumers were in a frenzy about what to do.

There were a lot of news reports about consumers over-buying of some products such bulks of tissue paper and then the same consumers saying later they shouldn't have bought so much.

Then there were all the stores offering all kinds of campaigns and pre-sales tax bargains to entice consumers to buy before the Oct. 1 sales tax came into affect.

And then there was the 2019 Rugby World Cup going on at the same time, so it was  a frenzied time period in Japan.

Looking back, as I was in Japan, in Yokohama, for a short trip in September and a short trip October it was special period in Japan compared to what the world is like now.

If only the Olympics could capture the good feelings that Japan was experiencing at that time it would be wonderful.

Article:

But the official warned of downside risks going forward due to the spread of more contagious variants of the coronavirus as well as the global shortage of semiconductors.

In April, output of general-purpose and business-oriented machinery, such as steam turbines, air pressure governors and pumps, gained 16.1 percent, while that of production machinery, including chip making tools, rose 7.8 percent, contributing to the overall increase in the index.

Output in the electrical machinery as well as the information and communication electronics equipment sector grew 10.9 percent, thanks to strong demand for batteries used for cars.

Ideas:

Yes, there are many downside risks still as many sectors are not doing as well as the manufacturing sectors.

The demand and increase of machinery tools shows that demand in the manufacturing industry is increasing and the demand for tools and machinery used in factories.

Of course part of it could be back demands or bent up demand from the spring and summer of 2020 when supply chains and logistics chains were not a full strength and overall global demand was still not so good.

But overall global demand seems to be the driver for manufacturing companies in Japan.

Article:

Meanwhile, output in the auto sector slipped 0.8 percent amid a global chip crunch.

Based on a poll of manufacturers, the ministry expects output to fall 1.7 percent in May and increase 5.0 percent in June.

Looking ahead, Taro Saito, executive research fellow at the NLI Research Institute, said he expects the upward momentum to continue in the coming months despite the current virus state of emergency, which will be in place until June 20, saying it has little impact on factory activities.

Ideas:

The global chip challenge was something that was not expected maybe one or two years ago.

If companies could have known about the chip shortage challenges they could have prepared ahead of time for the supply challenges.

Manufacturing output is never linear. There are periods of growth and periods of not so good growth.

For example, the Golden Holiday period could have an impact of output during that period.

Factory activities most likely will remain stable as the current virus situation seems to be a challenge for the services sector areas but not so much for the manufacturing areas.

Article:

Although he warned of the risk that the global chip shortage may continue to cast a shadow over auto production, he said that "many other sectors are expected to see firm gains, which will improve Japan's overall output."

The index of industrial shipments increased 2.6 percent to 97.3 while that of inventories fell 0.1 percent to 94.7.

Ideas:

This might be an important lesson for auto production companies and other manufacturing companies or any companies. Maybe its possible or not possible to order a supply of chips in the future to avoid supply shortages. Or maybe Toyota's just in time policy, for example, might not allow the stocking of too many parts and supplies, in order to avoid such scenarios in the future.

Perhaps now with the algorithm programs and big data programs available future scenarios such as the shortage of chips and be more easily predicted and overcome where there are less challenges with supplies and logistics in the future.

The decrease in inventories could be related to several things; one being demand or global demand has exceeded supply and manufacturing firms are not able to keep up. The second being firms have were able to reduce their supplies during the downturn of 2020 and they are not yet up to speed with demand. And they are not producing as much as before the pandemic due to concerns about the pandemic.

Have a nice day and be safe!

APEC Growth:

https://mainichi.jp/english/articles/20210529/p2g/00m/0bu/035000c

Article:

TOKYO (Kyodo) -- The combined gross domestic product of the 21 member economies of the Asia-Pacific Economic Cooperation is expected to grow 6.3 percent this year, turning around from a 1.9 percent decline in 2020 as they gradually reopen while COVID-19 vaccines fan optimism, an APEC report showed.

The organization's Policy Support Unit said GDP is pushed up by "pent-up demand unleashed following a year of subdued spending," but cited an "uneven recovery" largely due to "differences in vaccine access and availability" in the region.

The unit forecast the region's growth will persist in 2022 and 2023 but at a more moderate pace of 4.4 percent and 3.4 percent, respectively, according to the report.

Ideas:

When this article was written, it seemed like there was going to be some optimism as the vaccines globally were beginning to show some promise.

In the weeks almost immediately there was increase globally and especially in the APEC region of the virus variants that is going to dampen an APEC economic recovery.

Yes pend up demand is there but so is the uncertainty of the virus situation.

Even as more people become vaccinated, it seems some still have challenges with the new variants.

And it has to be remembered, even in normal times, economies don't grow in a linear fashion, as there are many different sectors and markets, and unfortunately there are always winners and loser in a market economy, and even quasi-market economies.

Article:

"The region continues to face significant uncertainties, largely linked to how the pandemic is evolving, while job losses due to the pandemic and expectations of higher inflation this year could surpass consumer spending," said Denis Hew, director of the unit.

The report said the 1.9 percent contraction last year was less than the 2.7 percent decline projected a year ago as member economies, such as the United States, China and Japan, stepped up fiscal stimulus and monetary easing measures.

The report was issued ahead of an APEC trade ministers virtual meeting slated for June 5, where pandemic response through trade is expected to be on top of the agenda.

Ideas:

Most countries probably had some kind of stimulus packages to help their respective economies, but not stimulus packages work the same way and or help in the same way

So while the US and China might have appeared to come out of the pandemic, in terms of its economy a little better than other countries, it must be remembered and economic growth or GDP growth alone is not the real economy.

In those countries and globally the real economy is jobs and salaries. So while GPD may have grown, what about the the lives of real people. How many are still without jobs, and not just in the US, but globally, how many businesses have failed or gone under, how many people are living on minimal wages still because of the pandemic.

Article:

Ministers are likely to focus on ways to ensure open markets, enable the safe and efficient distribution of vaccines and steer the region toward economic recovery while reaffirming their commitment to the multilateral trading system, according to the APEC Secretariat.

The report said that confirmed vaccine purchases vary from as low as 40 percent of the population to as high as almost 800 percent among the APEC members.

With a population of around 125 million, Japan currently has agreements to receive 50 million doses of COVID-19 vaccine from Moderna Inc. by September, 120 million doses from AstraZeneca Plc and 194 million doses from Pfizer Inc.

Ideas:

Once the populations of the APEC countries can get their populations vaccinated and can control the variants now running wild in all countries the APEC countries can begin to really focus on trade within APEC.

Of course trade doesn't stop because of the pandemic. Of course it did somewhat in the spring of 2020 because of low demand and logistics challenges globally.

At the time of this writing, both South Korea and Japan are in the middle of a variant spreading crisis. But at the same time both countries exports are booming, as they tend to compete in the same markets with similar products.

And both countries have similar lockdown procedures and similar challenges with services, restaurants and so on.

Article:

The COVID-19 pandemic has weakened trade, with countries shutting down borders, disruptions in global supply chains and sharp reductions in overall demand, resulting in a contraction in the volume of merchandise exports of 2.6 percent and imports, 5.7 percent, last year, the report showed.

The value of merchandise trade remained in negative territory in 2020 relative to the level in 2019, with exports decreasing by 4.7 percent and imports by 6.3 percent.

It was better compared to the rest of the world, which recorded a 10.3 percent decline in the value of merchandise exports while merchandise imports also contracted by 9.0 percent.

The 21 APEC economies are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

Ideas:

Yes exports were not so good in 2020 but in some countries, again, Japan and South Korea, have come back in a very strong way, with cars and electronic devices to the US and China leading the way.

As supply chains in the APEC region get back to normal in 2021 and consumer demand begins to increase in the region, and all countries begin to control the variant situation, the APEC region no doubt is going the lead the world globally in economic growth.

But it may take some time and maybe not until the fall or winter of 2021 because of the new variants sweeping through the APEC region.

Have a nice day and be safe.

Japan Jobless Rate:

 https://mainichi.jp/english/articles/20210528/p2g/00m/0bu/029000c

Article:

TOKYO (Kyodo) -- Japan's unemployment rate worsened to 2.8 percent in April, increasing for the first time in six months, as hiring in the service sector softened under the government's third coronavirus state of emergency, government data showed Friday.

The jobless rate climbed from 2.6 percent marked in March, but it was lower than 2.9 percent registered in February, according to the Ministry of Internal Affairs and Communications.

Separate data from the Ministry of Health, Labor and Welfare showed the job availability ratio in April worsened to 1.09 from 1.10 a month earlier, meaning that there were 109 job openings for every 100 job seekers. It improved 0.01 point in March.

Ideas:

Japan's jobless rate might be the envy of the world and or much less than many countries especially during the pandemic.

But the jobless or unemployment rate doesn't tell the full story. As there might be a large number of employed workers who are working part-time jobs, contract jobs, or even temporary type jobs with low wages and or no real benefits.

And at the same time, it doesn't show how many have stopped or given up looking for work. In many countries a person is not counted as unemployed unless they can show they are looking for work, report to an government unemployment agency with documents showing attempts to find work.

So who really know how many people have given up because they just can't find work.

And it has to be remembered, a country's unemployment or jobless rate will never be zero. There is always a certain number of people, in any economy, for whatever reason, who are out of work. 

Some maybe by choice, some maybe have left a job, quit a job, was laid-off, and now are looking for work. So no economy will have a zero percent jobless late.

Article:

In late April, Prime Minister Yoshihide Suga declared a third state of emergency in Tokyo and three western prefectures in response to a fourth wave of COVID-19 infections driven by highly contagious virus variants.

It entailed stricter and broader virus prevention steps than the second emergency, effective from January to March for the capital and other areas, seeking not only alcohol-serving establishments but also major commercial facilities such as department stores to close temporarily, in addition to stay-at-home requests.

The total number of unemployed people increased 200,000 from a year earlier to 2.09 million, while people in work rose 290,000 to 66.57 million.

Ideas:

Again while the total number of unemployed people increased by 200,000 for a  year earlier, it might not tell the full or real story.

And maybe the real story is how many people in the economy are working part-time, temporary, or contract now because of the pandemic, as opposed to full-time jobs with real benefits.

Maybe companies have no choice and they can only offer part-time for awhile. 

If there are supposedly 120 to 125 million people in Japan and only 66.57 million are working, or better how many of 120 million are work eligible, meaning lets say university age plus, who might have a chance for some kind of job.

For whatever reasons, to change the topic a little, the emergency measures don't seem to be working, and maybe its not the government fault.

Article:

By sector, however, accommodation and restaurant services, hit hard by the prolonged pandemic, saw a larger fall in the number of workers than any other, losing 200,000 from the previous year to 3.53 million.

The deterioration in the unemployment rate is likely to reflect whether the emergency declaration was in place in the final week of each month, when the survey is conducted, a government official told reporters.

The second emergency declaration was lifted on March 21 and the third one was effective from April 25.

Ideas:

Yes, the accommodation and restaurant services type businesses have been hit the worst. And especially those hotels that really focused on international tourists in the major metropolitan areas, such as Tokyo and Osaka. 

But of course many of the resorts, such as spas and onsen areas may have been hit hard because of the drop in international tourists.  

The restaurant situation is a little different as they of course rely on domestic customers, and unfortunately are subject to the feelings and fears of customers coming back to their places of business.
Most likely the restaurant industry is not going to get back to normal until everything begins to calm down, with more people vaccinated, with the virus variants under control.

And at the same time, whether good or bad, people/families might have adopted a different lifestyle of eating more from home and or even getting more takeout instead of eating at a restaurant like before the pandemic.

Restaurants, if they are able, if they haven't already, should have transitioned to more takeout services to offset the losses of customers coming to their restaurant.

Article:

Suga had initially planned to lift the latest emergency on May 11, but as the number of daily new infection cases showed no sign of abating during the Golden Week holidays through early May, the declaration was extended to May 31 and expanded to 10 prefectures.

In the reporting month, 35.68 million of those with jobs were regular workers, rising 50,000 from the previous year and up for the 11th consecutive month, while 20.39 million were nonregular employees, growing 200,000 and up for the first time in 14

Ideas:

And here is the real story, the 20.39 million who are nonregular employees. Maybe companies feel they have to choice, in order to survive, they only hire or only want to hire nonregular workers.

There are always positives and negatives. While a company might think they are saving money by only hiring non-regular workers at a lower wage than regular workers, its doesn't really help the economy, in that the nonregular workers have less income and then after maybe whatever expenses they have they have less extra income or less disposable income to use in the economy related to buying products or services.

So then consumer spending is less then what is needed or wanted in the Japanese economy.

The trend seems to be nonregular workers, but it might help the bottom line of companies it doesn't help the real economy in the long run.

Have a nice day and be safe!

BOJ Reduces Economy Assessment:

 https://mainichi.jp/english/articles/20210526/p2g/00m/0bu/078000c

Article:

TOKYO (Kyodo) -- The government downgraded on Wednesday its key assessment of Japan's economy for the first time in three months as consumption was further dampened under the extended state of emergency over the coronavirus pandemic.

The Japanese economy shows "further" weakness in some components and remains in a severe situation due to the coronavirus pandemic, the Cabinet Office said in its monthly report for May describing the overall situation for the Japanese economy, but added there are continued signs that it is picking up momentum.

In the previous month, the report said the economy showed weakness in some components but did not use the word "further."

Ideas:

Consumer spending will continue to remain below pre-pandemic levels for a while, most likely through the summer and even into the fall until there are enough people vaccinated and there are no more variant outbreaks and or emergency measures.

Yes, as reported in many articles and reports, manufacturing and exports seem to be coming back but.

But because the spring of 2020 was so bad, the news of record levels of exports need to be tempered with the idea of how bad in was a year ago.

An economy is very complex, and all sectors or industries don't grow or change exactly the same way. 

While the manufacturing industry might be doing much better, the service sector industries/companies are not doing so good

It might take months or even a year or more for them to get back to pre-pandemic levels.

Article:

By component, the office revised downward its view on consumer spending, the first downgrade in three months.

With people asked to stay home and restaurants and bars to close early under the nation's third state of emergency over the virus since late April, it said consumption "shows weakness further recently, especially in service spending."

In April, the report said private consumption had shown "a weak tone recently."

Amid a fourth wave of infections triggered by highly contagious virus variants, the third emergency initially declared for Tokyo, Osaka and two other prefectures was scheduled to end on May 11.

Ideas:

To be fair and honest, even before the pandemic, consumer spending in Japan consumer spending was./has always been a challenge for the Bank of Japan and the Japanese government.

The Bank of Japan has been trying different strategies to boost inflation to the 2 percent level, which is a good benchmark for any economy, which shows a solid amount of economic activity, including a good level of consume spending.

But it hasn't been able to reach the 2 percent inflation goal in 7+ years of trying.

Yes spending in the services sectors or part of the economy is the major challenge for the Japanese economy now, because in the services sector, it might require face to face meeting such hotels, restaurants, stores, or any other business where customers and company service employees need to meet.

Article:

But the government has extended it to next Monday and expanded areas under the restrictive measures to 10 prefectures. With the virus spread showing no signs of abating, it plans to make a final decision later this week on whether to extend the emergency into June, a senior government official said.

"Consumption began to decline in mid-April and plunged to quite a low level during the Golden Week holidays" from late April to early May, usually one of the busiest times of the year for the tourism sector, a government official told reporters.

"Spending on goods has been relatively solid, but that on services remains sluggish," the official added.

Ideas:

Consumer spending on goods or products can easily be done online, for many products, and even going to a store might not be that much of a challenge, especially if its done when there are not a lot of other customers in the store or at times which are not peaking shopping times.

Of course many food supermarkets now have either delivery services and or unique pickup type services to help the customers.

The idea is to minimize contact with as many people as possible, so get your in-store shopping done early if you have to do to a physical store or late night if the store is open.

Of course, maybe many stores now have a presence or online platform which customers can use instead of going to the physical store.

But that doesn't work for many small stores and shops as they don't have the resources or need an online presence.

The challenges of course remain for all of the services not related to food or goods, which can possibly be bought online.

For example restaurants, hotels, tourism businesses, movie theaters etc. which require more face to face interactions and or where a larger group of people/consumers can be in contact.

Article:

The monthly report also downgraded its view on corporate business assessments for the first time in four months, saying they "appear to be pausing" in recovery, while "some severe aspects still remain."

As for exports, the office retained its evaluation but adopted a different wording. It said that exports "continue to increase moderately," compared with the phrase "increasing at a slower pace" in the April report.

Assessments on other major components were unchanged, with the latest report saying that business investment and industrial production are "picking up."

Looking forward, the government said the economy is expected to continue picking up but warned "full attention should be given" to a further increase in downside risks due to the spread of virus infections in Japan and abroad.

Ideas:

Exports appear to be improving at a steady rate. But again, it must be understood just how bad spring 2020 was. So if we see a 30 percent plus increase from month to month from a year ago, it has to be tempered with the idea, that is just showing an increase from spring 2020, not spring 2019 before the pandemic.

It can never be assumed that business investments are always going to go up in a linear fashion like a line on a graph.

Business investments, like any other economic activity is subject to human interaction, meaning business sentiment. If the businesses feel the economy looks good six months down the road, the they might invest some, but if the economy doesn't look so good six months down the road they might hesitate or wait until they feel the economy is going to look better.

Have a nice day and be safe!

Japan April Supermarket Sales:

 https://mainichi.jp/english/articles/20210526/p2g/00m/0bu/072000c

Article:

TOKYO (Kyodo) -- Supermarket sales in Japan rose 6.0 percent on a same-store basis in April from a year earlier, the second consecutive month of growth, supported by stronger demand for clothing, an industry body said Wednesday.

Sales of clothing items jumped 74.3 percent in reaction to a drop in April last year, when people were asked to stay home to help prevent the spread of the novel coronavirus.

Ideas:

Perhaps maybe it should be a little more specific and say clothing store sales instead of just the broad general idea of supermarkets.

Or maybe use department stores sales instead of supermarkets to be more specific.

Supermarkets might be considered places to buy food and similar items, maybe not exactly clothing.

It would be interesting to see a breakdown of what percent were online sales and what percent were in-store sales.

Article:

Overall sales of 11,804 supermarkets operated by 56 companies totaled 1.08 trillion yen ($9.9 billion), according to the Japan Chain Stores Association.

Sales of home appliances increased 52.6 percent as liquid-crystal display TVs and air purifiers sold well as people spent more time at home due to the coronavirus pandemic.

Ideas:

Again perhaps there should be a distinction between supermarkets and department stores instead of what looks like just a combining of everything in one classification.

Maybe the Japan Chain Stores Association should have several classifications; department stores and then supermarkets.

For example home appliances are not usually associated with supermarkets but instead departments stores or even more specialized stores like Yodobashi camera.

As workers maybe begin to go back to their office, it will be interesting to see how much the sales of home appliances decrease in 2021 compared to 2020.

Of course, as the summer season begins, the sales of air-conditioners will most likely increase which might keep the sales of home appliances at a reasonable level.

Article:

Demand for such products as picnic sheets, pet goods and sportswear continued to be robust. But sales of food products slipped 3.2 percent from a year earlier, although those of fresh and carry-out items were brisk.

Atsushi Inoue, a senior official of the association, said the overall sales growth in the reporting month largely resulted from the sharp fall a year ago and it is not mirroring the current situation of consumption.

He said the situation is "severe" and predicted that "saving-oriented" consumption will continue for the time being.

Ideas:

Yes, it must be remembered, that an increase one year to the next, doesn't mean sales are back to pre-pandemic levels.

Sales were so bad in 2020, any increase in 2021 might look good.

But yes, sales are not back to the pre-pandemic levels and consumer spending is still not where it should be.

Consumers are still in a wait and see mindset and some if not many might still be worried about their jobs, especially if they are in the services oriented industries.

Have a nice day and be safe!

Bank of Japan:

 https://mainichi.jp/english/articles/20210525/p2g/00m/0bu/012000c

Article:

TOKYO (Kyodo) -- Bank of Japan Governor Haruhiko Kuroda said Monday he is starting to see the light at the end of the dark pandemic tunnel thanks to the rollout of COVID-19 vaccines but warned of risks from an uneven economic recovery.

In his opening remarks at a conference hosted by the BOJ's research institute, Kuroda said the pandemic has brought various changes to society and accelerated digitalization, which will likely boost productivity and benefit individuals and companies.

Ideas:

There are always some positives and some negatives in every situation. Sometimes more positives and sometimes more negatives.

Of course the pandemic has brought more negatives than positives but it also has accelerated some positives in the economy.

Or some positives for some. For every positive for a company or others it might be a negative for someone else.

Unfortunately, sometimes that is the market economy.

Yes many economies globally, and not just Japan are going through and uneven economic recovery.

While manufacturing might be improving and exports might be improving many parts of the services industry are not even close to getting to some kind of recovery level.

Article:

Still, Kuroda said it is necessary to pay attention to the possibility that the fruits of growth brought on by digitalization will be concentrated in a "small fraction of society."

"We are beginning to see the light at the end of this pandemic tunnel, but the light does not clearly reveal the shape of the society and economy we are approaching," Kuroda told the conference online.

Ideas:

Yes, most likely only a small of society it really going to see any benefits to digitalization, as many parts of the economy may take a while to get there or transition to some kind of digitalization, while some parts many never reach a level of digitalization.

No one knows what an economy and society is really going to look like after the pandemic is fully over.

And as of now, it seems to the pandemic is back in full swing with the new variants running rampant globally.

Article:

The fragile and uneven nature of economic recovery has been a source of concern globally. Japan has seen a growing divergence between manufacturers and nonmanufacturers in the pace of recovery as the country still struggles to rein in infections with its vaccine rollout, which has lagged behind countries such as the United States.

Going forward, the challenges faced by central bankers will change from providing liquidity support to addressing issues such as solvency and corporate viability, according to Kuroda.

Ideas:

Liquidity support is going to be important even through 2021 and at the same time, the BOJ should always be working on the challenge of solvency. And also not just corporate viability but real corporate growth.

Japan doesn't need any more zombie companies or companies just barely surviving.

Now is not the time for the phrase: "Let the market decide" who the winners and losers will be in the economy.

The BOJ and the Japanese government should do as much as they can to help as many businesses as they can get back to real economic growth.

Article:

Kuroda said last week the central bank would consider extending its scheme to support corporate funding beyond the end of September depending on the impact of the COVID-19 crisis.

"At the same time, policymakers face the additional challenges of the economic inequality that has become even more apparent during this health crisis, and the response to increasing worldwide concerns over climate change," he said.

Ideas:

As the pandemic is continuing on and on, the BOJ will have no choice with the end the support to businesses.

Economic inequality is now a real challenge in Japan. Before many thought of Japan as this rich country with very little or less economic inequality than other countries.

But the pandemic has flattened the economic inequality differences in many countries and especially in Japan.

While manufacturing might be doing good and many sectors and industries are seeing a comeback, the services industry, especially the parts related to travel, hotels, restaurants, and especially those involved in the international travel industry may not see daylight until 2022 when many if not all, or even at all, begin to get back to some kind of new normal.

Have a nice day and be safe!

Japan Convenience Store Sales:

 https://mainichi.jp/english/articles/20210521/p2g/00m/0bu/016000c

Article:

TOKYO (Kyodo) -- Convenience store sales in Japan rose 6.6 percent in April from the same month last year for the second consecutive month, as customers returned after the first nationwide state of emergency was declared over the coronavirus, an industry body said Thursday.

Same-store sales of seven major convenience store operators totaled 842.50 billion yen ($7.7 billion), as the number of shoppers rose for the first time in 14 months by 7.8 percent to 1.24 billion, according to the Japan Franchise Association.

Ideas:

Most likely the increase in sales in related to big company workers returning to working in the company offices instead of at home, and as such are back to buying things in the convenience stores near their work places.

It will be interesting to see what happens in the coming months with the spread of the new variants and if companies go back to working from home, or continue to work in their offices.

On a side note, as restaurants are not allowed to service alcohol, will that have an affect on the sale of alcohol at convenience stores.

Article:

But average spending per customer fell for the first time in 19 months by 1.1 percent to 682.10 yen, as people tended not to buy food and beverages all at once compared to a year earlier.

Still, sales of alcoholic beverages remained solid, with many people drinking at home as the third state of emergency was declared in late April, the association said.

Ideas:

As just stated above it seems alcohol sales have remained  steady, buying at convenience stores and drinking at home, as restaurants are not allowed to sell alcohol.

And it was expected that spending per customer would decrease as customers feel more safe going to the conbini more than once instead of just a one time purchase for many things.

But at the same time, the decrease in spending per customers might be related to buying from a conbini near their office, such as only buying what they need to lunch, and then maybe, if they need anything for the night visiting the conbini again near their home or near their office.

Article:

In April last year, the first state of emergency was issued in Tokyo and its vicinity and later expanded to the whole nation, sharply decreasing the number of people going out.

The same-store sales in April 2020 dropped 10.6 percent from a year earlier, logging the sharpest monthly decline since comparable data became available in 2005.

Ideas:

As sales decreased in conbinis in 2020, was there ever any talk of the government also helping convenience stores or was it just let the market be as it is, meaning some industries will be OK, and some not, but let the market be as it is.

Or did any of the franchise stores operated by retired workers/families get any kind of compensation because of the emergency measures, like the restaurants were supposedly getting.

Many of the franchise stores operate on very thin profit margins and are under not so good conditions as required by the large franchise companies.

So any drop in sales, when they rely mostly on volume might have been a significant stress for the retired workers who started a franchise conbini as a way to keep making a living and live.

And did any of the conbini companies help their franchise stores, owners, with a loss of sales during the pandemic.

Article:

The latest state of emergency was declared in April this year initially covering four prefectures including Tokyo and later expanding to now cover a total of nine prefectures.

Compared to figures in pre-pandemic April 2019, the reporting month's sales on an all-store basis fell 3.7 percent to 882.17 billion yen, while the number of customers dropped 9.8 percent to 1.30 billion. The number of all stores was little changed from 55,824 in April 2019 to 55,868 in April 2021.

Ideas:

A drop of 9.8 percent is a significant decrease because of the pandemic. Most likely the conbinis near the large company work areas were the most affected, while those near the workers homes, most likely were not as affected.

But even though there is the pandemic, which as reduced economic activity in the Japanese economy, it seems conbinis are still a favorable to start and run, especially maybe for retired workers who still want to work.

But the article doesn't say if any stores were closed during the pandemic period which was possible as customers decreased in 2020.

Have a nice day and be safe!