–METI Keeps View: Retail Sales on Gradual Uptrend
–High Prices for Food, Beverages Supporting Overall Retail Sales
–Department Store Sales Up on Winter Clothing, Strong Inbound Spending
By Max Sato
(MaceNews) – Japanese retail sales continued to post a solid gain on the year in November, up 5.3%, backed by solid demand for vehicles and appliances, with the pace of increase picking up again after slowing to 4.1% in October from 6.2% in September, data released Thursday by the Ministry of Economy, Trade and Industry showed.
On the month, retail sales rebounded 1.0% after slumping 1.7% for the first drop in four months. The protracted heat wave that had dampened demand for autumn goods in the previous two months gave way to lower temperatures in the second half of November, boosting sales of winter clothing.
Sales values remained supported by elevated prices for food and beverages while fuel costs have stabilized. The number of visitors from other countries continued to show a sharp increase since Japan’s Covid border control was widely eased in May and the yen remains weak, shoring up department store sales.
The key points from the METI’s Current Survey of Commerce:
* Retail sales rose a preliminary 5.3% on the year in November for the 21st straight year-over-year rise after rising 4.1% (revied down from 4.2%) in October, 6.2% in September and 7.0% (revised from 7.1%) in August. The increase was higher than the median economist forecast of a 4.9% rise (forecasts ranged from 3.4% to 5.1% gains). The 7.3% rise in February remains the highest since the 8.3% increase in May 2021.
* On the month, retail sales rose 1.0% on a seasonally adjusted basis in November, following a 1.7% dip (revised down from a 1.6% fall) in October, a 0.4% rise in September, a 0.2% rise in August, a 2.2% jump in July. It was higher than the median forecast of a 0.1% increase (forecasts ranged from a 0.8% drop to a 0.7% rise).
* The ministry maintained its assessment, saying retail sales are “on an uptrend.” The three-month moving average in seasonally adjusted retail sales dipped 0.1% in November for a second straight drop after falling 0.4% the previous month.
* Sales of automobiles rose 11.3% on year in November for the 15th straight gain after rising 9.9% in October. Improved supply chains and easing chip shortages have been supporting auto production and shipments. Sales of machinery and equipment (largely consumer electronics) also jumped 11.0% in November for the fifth increase in a row after rising 1.5% previously.
* Sales of food and beverages, a category which has the largest share in retail sales, posted their 14th straight rise, up 5.8%, after rising 6.4% the previous month. Sales prices have been marked up to reflect high import costs seen earlier but the pace of goods price increases appears to have peaked.
* General merchandise sales at department stores and supermarkets marked the 26th straight year-over-year gain, up 4.8% in November, after rising 3.5% in October. Sales of apparel and accessories rebound a slight 0.6% for the first rise in three months after falling 8.9% the previous month.
* Sales of fuels rose 2.9% on the year in November after falling 1.2% in October for the first drop in four months and rising 7.1% in September. 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 extended the program through yearned, and then until next April, as retail gasoline prices hit record highs from late August through early September.
* Demand for medicine and cosmetics remained solid, up 3.9% in November, after a 4.8% gain in October.
Department Store Sales Continue Recovering
Industry data released on Monday showed department store sales marked the 21st straight year-over-year rise to ¥502.3 billion in November, up 7.4%, following increases of 6.1% in October, 9.2% in September, 11.8% in August and 8.6% in July. Sales last month were up 4.2% from the pre-pandemic November 2019, indicating a recovery trend.
The relatively weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, which rose 125.1% on the year to a fresh record high of ¥39.4 billion, surpassing ¥38.3 billion in October, which was the highest level since the association began collecting data on this category in October 2014. It was 51.0% above the level seen in November 2019, showing a clear recovery from the impact of the pandemic on inbound demand.
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