–METI Repeats Retail Sales Picking Up Gradually Despite Another Covid Spike
–Department Store Sales Continue Recovering on Eased Covid Rules
–Auto Sales Remain Weak but Pace of Y/Y Drop Slowing Amid Easing Supply Constraints
By Max Sato
(MaceNews) – Japanese retail sales posted the fifth year-on-year rise in July, led by high fuel prices and demand for summer clothing and beverages amid heatwaves, but a spike in Covid cases to record numbers since late in the month capped the momentum of the recent recovery in department store sales, data released Wednesday by the Ministry of Economy, Trade and Industry showed.
Department store chains reported continued strong demand for luxury brands and high-end watches and jewelry and for summer clothing. The year-on-year decline in vehicle sales has decelerated, thanks to easing supply bottlenecks, as seen in industrial production for July.
The key points from the METI’s Current Survey of Commerce:
- Retail sales rose a preliminary 2.4% on the year in July after rising 1.5% in June, 3.7% in May, 3.1% in April and 0.7% in March. The increase was higher than the median economist forecast of a 1.9% rise. Sales fell 0.9% in February, when the Omicron variant caused the worst spike in Covid cases during the pandemic. The government eased public health restrictions in late March.
- Sales of automobiles marked the 11th straight year-on-year drop, down 2.4% in July, but the pace of decline decelerated from 8.1% in May, 11.1% in April and 7.5% in March.
- General merchandise (department stores and supermarket sales marked the fifth straight year-on-year gain, up 4.6% in July, after rising 4.5% in June and surging 20.7% in May, while sales of apparel and accessories rebounded 1.2%, following a 1.5% dip in June and a 12.9% jump in May.
- Sales of fuels remained elevated, up 8.1% in July, with the pace of increase slowing further from 11.8% in June, 15.0% in May, 13.8% in April and 15.5% in March. The government has been trying to cap retail gasoline price markups by providing subsidies to refineries.
- Demand for medicine and cosmetics remained solid, up 8.6% on the year in July, marking the 15th straight increase, after rising 4.6% in June. Sales of machinery and equipment (largely consumer electronics) fell 5.5% in July after edging up 0.4% in June, slipping 2.7% in May and marking first year-on-year gain in six months in April, up 0.8%. Global supply constraints have caused shortages of home appliances and car navigation systems.
- On the month, retail sales rebounded 0.8% on a seasonally adjusted basis in July after a revised 1.3% drop in June and increases of 0.7% in May, 1.0% in April and 1.7% in March, which was the first rise in four months. The three-month moving average in adjusted sales was flat on the month in July after rising 0.1% in June.
- The ministry maintained its view, saying retail sales are “picking up gradually.” In June, it upgraded its assessment for the second straight month.
- Industry data released last week showed department store sales marked the fifth straight year-on-year rise in July, up 9.6%, after rising 11.7% in June and surging 57.8% in May. The Japan Department Stores Association reported that demand for summer clothing remained strong amid high temperatures and that seasonal clearance sales attracted more shoppers in the first half of the month. But in the second half, a resurgence in Covid infections and the intense heat and humidity discouraged some people from leaving home while online sales of mid-summer gifts maintained average-year levels, it noted.
- Easing border restrictions continued supporting purchases by foreign visitors, up 163.0% on the year, but they remained well below pre-pandemic levels, down 63.7% from July 2019, the association said.
Contact this reporter: max@macenews.com