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. 



Both Sogo-Seibu and Takashimaya noted strength in gift items for Mother’s Day as well as products that help consumers save electricity, like bedding treated with a special gel or made from a specific fabric to keep people cool.  Even before the crisis, Japan long-embraced the notion of “Cool Biz”, an attempt to get office workers into lighter and less restrictive clothing so companies can minimize their use of air conditioning. 

The Seibu-Sogo spokesman said interest in its “Cool Biz Style” range is especially high this spring and it started selling these clothing items a month earlier than last year.   Similarly, the Takashimaya spokeswoman said no-iron shirts for men are really moving.  

The uptick in Mother’s Day gifts and other spending patterns indicate that people are prioritizing family time.  “Businessmen who used to go out for dinner or drinks after work are choosing instead to eat at home, so we’ve been selling a lot of large frying pans that people can use to make a meal for the entire family,” said the Sogo-Seibu spokesman.

“Before, people would go home from work, take a beer from the fridge…and watch TV with the lights on. Now more people are choosing not to turn on the lights or TV, to talk to their families more…I think more people will start to think more about these kinds of things,” he said. “Because people are going back home earlier [in the evening], fathers have more time to spend with their children, doing puzzles or playing with toys and improving communication with their children. Therefore sales of those products have increased 20 percent compared to last year. People are going through a lifestyle change, and department stores need to propose ways that they can do that.” 

Japanese consumers had already been trading down for years before the earthquake as the economy stagnated and they worried about their own financial futures. Once a luxury-obsessed people, they have embraced more frugal spending patterns. They have largely shunned pricey European goods in favor of fast fashion or discounted merchandise they find online or in outlets.

Nomura’s Ikeda said average purchase price for apparel in Japan has been declining since the early Nineties’ economic bubble burst. She said that trend is set to continue but she doesn’t think the current crisis will accelerate matters.

Meanwhile, retailers and consumers are bracing for some sweaty months ahead. Businesses and homes often blast air conditioning to combat the sweltering and humid summer- although most will probably make an effort to cut back this year. There’s a growing risk that power may be in short supply in the coming months- especially since the government has recently ordered a second nuclear power plant be shuttered while earthquake and tsunami protection measures are reinforced. That means Japan might need to resume rolling blackouts in certain regions

Retailers are looking at the best ways to avoid a repeat of March and early April, when they were forced to reduce operating hours and/or close some stores to conserve power and allow their sales staff to get home and not risk getting stuck in the city. The blackouts force train lines to shut down and factories to close. 

“We’re now using 15 to 20 percent less energy than we used to, so even without closing stores or reducing opening hours we can still save electricity. But the final decision has not yet been made,” said the Sogo-Seibu spokesman. 

Takashimaya is more resolute about not shutting its doors. “Our president has already decided that [even if power shortages occur again in the summer] we won’t shorten our opening hours or close our stores for certain days. Instead, we will do our part to conserve energy by only using half of our elevators and escalators, using energy-saving LED lights for our exterior signs and other measures,” said the spokeswoman.



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