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Japan’s department store sales show 11th straight year of decline in 2007; December sales down 2.3%

January 20, 2008
By Ken Worsley


According to figures released on Friday by the Japan Department Stores Association, sales at Japan’s department stores fell 0.5% from 2006 to a total of 7.7 trillion yen in 2007. This was the 11th straight year that department store sales have shown a decline.

In the last half of 2007, we saw a few months where department store sales appeared to be recovering slightly. In August, they rose 1.4 percent, then fell 2.5 percent in September, fell 1.4% in October and rose 0.9 percent in November. We had predicted that very strong December sales results could push department store sales figures close to positive territory for the year as a whole.

Such a result, however, was deemed highly unlikely, given decreasing consumer sentiment, rising energy and food prices, and a slightly warmer than average December.

It turns out that in December, sales fell 2.3 percent, and the loss on the yearly stats was cemented into position. Including stores opened within the past year, December sales were down 2.6 percent.

If there is a bright spot, it is a dim one. In 2007, sales at department stores in Tokyo rose for the first time in six years - by just 0.1 percent.

At any rate, looking at the sales data shows us two important increases in sales. First, in 2007 we saw a 4.1% increase in cosmetics sales. Much of the growth in this industry appears to be related to fears over global warming, as cosmetics makers rolled out new skin protection and whitening creams in 2007. Also, candy sales at department stores rose 3.3% in 2007. This figure is harder to read, but we have to wonder if consumers are turning to giving candy and sweets as boxed gifts in order to save a bit of money.

The JDSA data covers sales at 278 department stores operated by 93 companies. Given the poor performance of shops in rural areas, we don’t expect the survey to cover that many stores by the end of 2008.

Filed Under Department Stores, Economic Reports, Retail 

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Comments

6 Responses to “Japan’s department store sales show 11th straight year of decline in 2007; December sales down 2.3%”

  1. B Dog on January 20th, 2008 11:57 pm

    Too many small shops sell stuff cheaper. Overhead on department stores makes no sense. Few of them seem to have ‘hip’ brand status amongst young people. And they haven’t even tried. I’d like to see someone make a move for one of the big boys and try to turn them around this year.

  2. BillyBuck on January 21st, 2008 12:20 am

    A tragedy before our eyes. 11 years of sinking sales….
    Don’t the weak yen policy work after all..? I am shocked !!!

  3. WG on January 21st, 2008 12:40 am

    B Dog:

    I’d like to see someone make a move for one of the big boys and try to turn them around this year.

    Like Wal-Mart?

  4. www.japansoc.com on January 21st, 2008 1:00 am

    Department Store Sales in Japan Down for 11th Straight Year in 2007…

    Things have not gone well for Japan’s department stores over the past eleven years. Despite the ‘economic recovery,’ they have seen sales fall for eleven straight years. Is there hope for this industry to turn itself around?…

  5. B Dog on January 22nd, 2008 10:48 pm

    WG:

    I’d like to see someone make a move for one of the big boys and try to turn them around this year.

    Like Wal-Mart?

    Ha ha! I was actually thinking Uniqlo/Fast Retailing. They keep talking about ‘expanding abroad’, but will it happen? Could they just settle on buying one of the domestic operators?

  6. Japan’s supermarket sales down for 24th straight month in December Japan Economy News & Blog - Business, Economy, Marketing and Economic Reports on January 23rd, 2008 3:41 am

    […] Sales for all of 2007 dropped 1.4% to 13.98 trillion yen. That makes 2007 the 11th consecutive year of decline for supermarket sales, which ties the streak that Japan’s department stores have going. […]

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