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Japan department store sales fall in 2006

January 21, 2007
By Ken Worsley


The Japan Department Stores Association has published their sales figures report for December 2006: Japan Nationwide Department Store Sales Results: January 18, 2007 (Report is in Japanese). The survey included figures from 96 companies operating 277 department stores.

Some highlights from the report:

  • In December 2006, department store sales fell 2.3% against the previous December.
  • 2006 was the tenth straight year of decline on store-by-store basis sales.
  • Clothing sales: Down 3.7 percent against 2005 numbers.
  • Food products sales: Down 2.3 percent against 2005 numbers.
  • Furniture and home appliances: Down 2 percent against 2005 numbers.
  • Against 2005 numbers, sales in Hokkaido fell the most, by 5.6% and sales in Nagoya fell the least, by 0.4%. None of the areas mentioned in the report mentioned a gain in sales.

The Japan Department Stores Association believes that the 2006 fall was mainly due to bad weather conditions. These would include a longer rainy season in the first half of the year and higher temperatures in the second half that deterred clothing sales.

What are we to make of the numbers? For one, it seems another obvious sign that consumer spending is not picking up, which leads this observer to believe two things: 1) The BOJ did the right thing by not raising interest rates last week, and 2) Companies still do not feel secure enough in their recoveries to start handing out pay raises.

Will 2007 be a make or break year for the department store industry? We know that a few large Japanese department store operators have pulled out of Hong Kong, citing falling sales. Not having changed their images in years, they found that Japanese department stores were no longer considered hip. Is the same thing happening with younger shoppers in Japan? And finally: are these large dinosaurs (Isetan, Seibu, Hankyu, Takashimaya, Odakyu, Keio, Tobu and others) flexible or nimble enough to make changes? Sogo certainly wasn’t.

Filed Under Business, Retail 

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Comments

2 Responses to “Japan department store sales fall in 2006”

  1. Trans-Pacific Radio on January 22nd, 2007 11:54 am

    TPR News: Monday, January 22, 2007 - Scandal, Free Trade, a Slump, and Stupidity

    Department store sales figures for December 2006 fell in every listed category, when compared to December 2005. The falling sales could indicate a lack of consumer confidence in general, a shift in retail spending away from large department stores, or …

  2. Japan’s January department store sales: ‘Plus’ 0.0% : Japan Economy News & Blog on December 2nd, 2007 10:15 pm

    […] Last December had seen a 2.3% fall against the same month in the previous year. […]

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