–METI Keeps View After May Upgrade: Retail Sales Picking Up Gradually
–Department Store Sales Continue Recovering on Eased Covid Rules
–High Fuel Costs Prop Up Retail Sales; Supply Delays Keep Auto Sales Weak
By Max Sato
(MaceNews) – Japanese retail sales posted the fourth year-on-year rise in June, led by high fuel prices and recovering department store sales, but marked the first month-on-month drop in four months after the initial impact of easing Covid restrictions in late March faded, data released Friday by the Ministry of Economy, Trade and Industry showed.
Department store chains reported strong demand for high-end goods from wealthy customers and for summer clothing amid record high temperatures for June while overall retail sales data showed declines in clothing as well as food and beverages. Auto sales remained weak amid supply constraints.
The key points from the METI’s Current Survey of Commerce:
* Retail sales rose a preliminary 1.5% on the year in June after rising 3.7% (revised up from 3.6%) in May, 3.1% in April and 0.7% in March. The increase was lower than the median economist forecast of a 3.0% 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.
* In the April-June quarter, retail sales climbed 2.8% on the year, marking the third consecutive gain after rising 0.3% in January-March.
* Sales of automobiles marked the 10th straight year-on-year drop, down 9.2% in June after falling 11.1% in May.
* Department store sales marked the fourth straight year-on-year gain, up a 4.5% in June, after surging 20.7% in May, while sales of apparel and accessories posted the first drop in three months, down 1.1%, following increases of 12.9% in May and 9.7% in April and a 7.2% fall in March.
* Sales of fuels remained elevated, up 11.6% in June, with the pace of increase slowing from 15.0% in May, 13.8% in April, 15.5% in March and 21.0% in February. The government has been trying to cap retail gasoline price markups by providing subsidies to refineries.
* Demand for medicine and cosmetics remained solid, up 4.6% on the year in June, marking the 14th straight increase, after rising 5.1% in May. Sales of machinery and equipment (consumer electronics) edged up 0.3% in June after slipping 2.7% in May and marking first year-on-year gain in six months in April, up 0.8%.
* On the month, retail sales fell 1.4% on a seasonally adjusted basis in June after rising 0.7% (revised up from 0.6%) in May, gaining 1.0% in April and jumping 1.7% in March, which was the first rise in four months after falling 0.9% in February. The three-month moving average in adjusted sales rose just 0.1% on the month in June after rising 1.1% in May.
* The ministry maintained its view, saying retail sales are “picking up gradually.” Last month, it upgraded its assessment for the second straight month.
* Industry data released Monday showed department store sales marked the fourth straight year-on-year rise in June, up 11.7%, after surging 57.8% in May. The Japan Department Stores Association noted continuing demand for summer clothing as the heat wave turned more intense in June, ending Japan’s rainy season about three weeks earlier than usual in many regions. Slightly easing border restrictions supported purchases by foreign visitors but they remained well below pre-pandemic levels, the association said.