Department stores, convenience stores see sales slide further in July

August 25, 2009
By Ken Worsley

Japan’s department stores and convenience stores have little to feel positive about after July sales results rolled in. According to data released by the Japan Department Store Association, sales at department stores nationwide fell 11.7% in July, marking the seventeenth consecutive month of decline. The survey covered sales at 87 department store operators with 272 shops.

Here is the breakdown of sales by individual categories:

Clothing: 35.0% of total sales, down 15.6%
Personal Effects: 11.9% of total sales, down 12.9%
Miscellaneous Goods: 12.7% of total sales, down 13.5%
Household Goods: 4.5% of total sales, down 11.5%
Food: 30.7% of total sales, down 6.9%
Services: 1.7% of total sales, down 0.8%
Other: 1.6% of total sales, up 8.0%
Gift Certificates: 5.4% of total sales, down 13.7%

In terms of trends we’ve been watching, clothing sales at department stores continue to take a beating, as food sales remain higher than two or three years ago as a percentage of overall sales. Moving forward, it seems as though department store operators would do well to sell more of the “other” category.

For the seventeenth month in a row, unseasonable weather has been blamed for the decline in sales at department stores.

At Japan’s convenience stores, sluggish sales of ice cream apparently contributed to a 7.5% July decline in sales. July was the second consecutive month in which convenience store sales fell, according to the Japan Franchise Association.

The real story behind the fall in convenience store sales is that the Taspo system has now been in effect for a year, and convenience stores are no longer seeing a large year-on-year boost in cigarette sales. Last July, Japan’s convenience stores rode the wave of higher cigarette sales to the tune of a 14.0% increase in sales. Will another form of wasteful government spending come along to help boost convenience store sales sometime soon?

Japan’s convenience stores are still actively seeking new revenue streams overseas, and in September events will be held for prospective franchise owners in Ho Chi Min and Moscow. October will see events in Montreal, Toronto and Singapore. If you’re interested in more information on these events, feel free to get in touch with us here.

Filed Under Convenience Stores, Department Stores, Economic Reports