–METI Keeps View: Retail Sales on Gradual Uptrend
–High Prices of Food and Beverages Propping Up Overall Retail Sales
–Sales of Apparel, Appliances, Fuels All Post 1st Y/Y Rise in 5 Months
By Max Sato
(MaceNews) – Japanese retail sales jumped on the year in July, thanks to smoother deliveries of automobiles amid improving supply chains, and also due to continued recovery at department stores aided by hot weather and an influx of foreign visitors, data released Thursday by the Ministry of Economy, Trade and Industry showed.
Elevated prices for food and beverages continued pushing up sales values while fuel prices also picked up after generally easing from last year’s spike.
The key points from the METI’s Current Survey of Commerce:
* Retail sales rose a preliminary 6.8% on the year in July for the 17th straight year-over-year rise after rising 5.6% (revised down from 5.9%) in June, 5.8% in May, 5.1% in April, 6.9% in March and 7.3% in February. The increase was higher than the median economist forecast of a 5.8% rise (forecasts ranged from 2.8% to 6.7% gains). The 7.3% rise in February remains the highest since the 8.3% increase in May 2021.
* On the month, retail sales rose 2.1% on a seasonally adjusted basis in July for the first rise in two months following a 0.6% fall (revised down from a 0.4% drop), a 1.4% rise in May, a 1.1% fall in April and increases of 0.3% in March and 2.1% in February. It was firmer than the median forecast of a 1.9% increase (forecasts ranged from a 1.2% drop to a 2.0% rise).
* The ministry maintained its assessment after upgrading it for the second straight month in March, saying retail sales are “on an uptrend.” The three-month moving average in seasonally adjusted retail sales rose 0.9% in July after dipping 0.1% the previous month.
* General merchandise sales at department stores and supermarkets marked the 23rd straight year-over-year gain, up 6.3% in July, after rising 4.5% in June. Sales of apparel and accessories recorded the first rise in five months amid hot and humid weather, up 3.0%, after falling 2.0% the previous month, when sales were partly dampened by rain storms.
* Sales of fuels rose 2.8% on the year in July, also for the first rise in five months after falling 4.1% in June, as the government is scaling back its energy subsidies.
Overall energy costs have eased in line with softer markets until recently while the government has been trying to cap retail gasoline price markups by providing subsidies to refineries. The process of phasing out the subsidy program began in June and is scheduled to end in September but officials are plan to extend the program through yearned as gasoline prices have surged in recent weeks.
* Demand for medicine and cosmetics remained solid, up 6.8% in July, after a 9.4% gain in June. Sales of machinery and equipment (largely consumer electronics) marked their first year-over-year rise in five months, up 4.3%, following a 4.2% drop.
Department Store Sales Continue Recovering
Industry data released last week showed department store sales marked the 17th straight year-over-year rise in July, up 8.6%, following increases of 7.0% in June, 6.3% in May, 9.6% in April, 9.8% in March, 20.4% in February and 15.1% in January. Compared to the pre-pandemic July 2019, sales last month were down a modest 1.5%, showing a steady improvement from sharper drops seen earlier.
The Japan Department Stores Association noted that the prolonged heat wave supported demand for summer clothing and other seasonal goods while sales of luxurious brand name products were also solid. Family events as well as anime and food exhibits attracted shoppers, it said.
The weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, up 206.6% on the year. It was now 11.4% above the level seen in July 2019, overcoming the drag from the pandemic, after falling just 0.8% in June from four years earlier.