By and  on May 16, 2011

TOKYO — The retail scene in Japan is showing some tepid signs of recovery as consumers reassess their priorities in a post-earthquake world. 

As to be expected, March was a dark month for retailers as they absorbed the immediate impact of a devastating earthquake and tsunami and a power shortage. Indications about the future are still mixed. There are some encouraging signs from April and the Golden Week holiday period, which ran April 29-May 6. But last week Isetan-Mitsukoshi warned that it predicts an "extremely serious effect" on the Japanese economy and said consumer mindsets have cooled.

Just Monday, the Japanese government said April's consumer confidence fell to a two-year low, falling at a seasonally adjusted rate of 5.5 percent to 33.1 in April. Japan's first-quarter GDP numbers are due Thursday.

Earlier this month, Fast Retailing said April comps at its Uniqlo chain in Japan rose 4.6 percent as shoppers snapped up summer items. They fell 10.5 percent in March, when the disaster struck the northeastern part of the country.  Similarly, both Isetan Mitsukoshi and Takashimaya recovered from double-digit drops in March. Isetan Mitsukoshi saw its April sales rise 0.5 percent while those at Takashimaya fell 0.8 percent.  

Also of note, J.Front Retailing, which owns Daimaru and Matsuzakaya, saw its April sales recuperate from March to rise 2.2 percent in April. A spokesman for H2O Retailing Corp, parent of the Hanku and Hanshin chains, said its April comps rose 1.4 percent. 

"Overall, fashion items moved a lot. Because of the earthquake, I think people were in a bit of a resigned mood in March, which affected sales, but in April Hankyu and Hanshin saw a surge," he said. 

Specialty retailer Beams said sales during Golden Week were up about 8 to 10 percent compared to the same period a year earlier.  

"It is difficult to generalize, as the crisis continues to unfold and we are affected in various ways.  However, in the less affected areas, we see consumer minds lifting to previous year levels," said a Beams spokesman. 

It's still difficult to gauge the longer-term impact on Japanese consumers in such an unprecedented situation, which Japanese Prime Minister Naoto Kan has called the country's worst crisis since World War II. Although the power shortage issue- linked to a crippled nuclear power plant north of Tokyo- appears to be under control at the moment, citizens and companies are making a concerted effort to conserve energy. There are also indications that people are spending more time at home, eating in and spending time with their families.  

A spokesman for Sogo and Seibu department stores, which are part of Seven & I Holdings Co., said the retailer doesn't have April sales data yet but conditions appear to be recovering.  

"April's sales were higher than [the same month] last year, and May has also seen a surge in sales. I think because of lifestyle changes brought on by the earthquake and power shortages, things will remain stable throughout the summer," he said. But we really can't say what will happen after the summer, as it's the first time we're experiencing a situation like this." 

A Takashimaya spokeswoman expressed optimism. "I think things will recover and continue to get better," she said.  

Mika Ikeda, an economist with Nomura bank, said she doesn't see the quake altering longer-term consumer patterns.  

"Overall consumer spending was weak after the quake, especially spending on culture and recreation and [items like] bags, clothing accessories, wristwatches, etc. But it was temporary," she said. 

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