Auto Demand, Recovering Department Stores on Influx of Foreign Visitors,
–METI Keeps View: Retail Sales on Gradual Uptrend
–High Prices of Food and Beverages Supporting Overall Retail Sales
–Sales of Apparal, Appliances, Fuels Maintain Rebound Seen in July
By Max Sato
(MaceNews) – Japanese retail sales maintained high growth on the year in August as the lingering heat wave boosted demand for summer clothing and other seasonal goods, new car sales rose on improved supply and record high gasoline prices pushed up fuel costs, data released Friday by the Ministry of Economy, Trade and Industry showed.
Sales values are also underpinned by elevated prices for food and beverages. The number of visitors from other countries continued to show a sharp increase after Japan’s Covid border control was widely eased in May, driving department store sales higher.
The key points from the METI’s Current Survey of Commerce:
* Retail sales rose a preliminary 7.0% on the year in August for the 18th straight year-over-year rise after rising 7.0% (revised up from 6.8%) in July, 5.6% in June, 5.8% in May and 5.1% in April. The increase was just above the median economist forecast of a 6.9% rise (forecasts ranged from 4.2% to 9.8% gains). The 7.3% rise in February remains the highest since the 8.3% increase in May 2021.
* On the month, retail sales edged up 0.1% on a seasonally adjusted basis in August for the second straight rise following a 2.2% rise (revised up from 2.1%) in July, a 0.6% fall in June, a 1.4% rise in May and a 1.1% fall in April. It was softer than the median forecast of a 0.4% increase (forecasts ranged from a 2.5% drop to a 0.9% 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 0.5% in August after rising rose 0.9% the previous month.
* General merchandise sales at department stores and supermarkets marked the 24th straight year-over-year gain, up 7.2% in August, after rising 6.3% in July. Sales of apparel and accessories recorded the second straight increase, up 0.9%, after rising 3.2% the previous month for the first rise in five months amid hot and humid weather.
* Sales of fuels rose 7.9% on the year in August for the second consecutive rise after marking their first rise in five months in July, up 3.2%, and falling 4.1% in June, as the government has scaled 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 was scheduled to end in September but officials have decided to extend the program through yearned as gasoline prices have surged in recent weeks.
* Demand for medicine and cosmetics remained solid, up 3.9% in August, after a 6.5% gain in July. Sales of machinery and equipment (largely consumer electronics) rose 5.6% in August after 4.0% in July for the first year-over-year rise in five months.
Department Store Sales Continue Recovering
Industry data released Monday showed department store sales marked the 18th straight year-over-year rise in August, up 11.8%, following increases of 8.6% in July, 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 August 2019, sales last month were down 4.2%, gradually improvement from sharper drops seen earlier.
The Japan Department Stores Association noted that the adverse effects of typhoons were more than offset by continued solid sales of luxurious brand name products, increased foot traffic during summer holidays and strong demand for summer clothing and other seasonal goods amid the heat wave.
The weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, up 244.4% on the year. It was now 24.1% above the level seen in August 2019, overcoming the drag from the pandemic, after rising 11.4% in July from four years earlier and falling just 0.8% in June.
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Contact this reporter: max@macenews.com
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