–METI Upgrades View: Retail Sales Picking Up Vs. Picking Up Gradually
–Department Store Sales Continue Recovering but Still Below Pre-Pandemic Levels
–Demand for Cosmetics, Drugs Remains Strong; Auto Sales Rebound
By Max Sato
(MaceNews) – Japanese retail sales posted a seventh straight year-on-year increase in September, led by high fuel prices, pent-up demand for shopping at physical stores and a rebound in auto sales amid improving global supply bottlenecks, data released Monday by the Ministry of Economy, Trade and Industry showed.
The seventh wave of the pandemic has eased after the number of new Covid cases hit record highs from late July to late August, supporting department store sales, which have been recovering in reaction to restricted operations a year earlier when the Covid state of emergency was still in place.
The key points from the METI’s Current Survey of Commerce:
* Retail sales continued posting a solid gain in September, up a preliminary 4.5% on the year, after increases of 4.1% in August, 2.4% in July, 1.5% in June and 3.7% in May. The increase was higher than the median economist forecast of a 4.1% rise. Sales fell 0.9% in February, when the Omicron variant caused a spike in Covid cases. The government eased public health restrictions in late March and has continued reopening the economy.
* Sales of automobiles marked the first year-on-year rise in 13 months, up 10.3% in September, after falling 6.3% in August and posting double-digit percentage in some months.
* General merchandise sales at department stores and supermarkets marked the seventh straight year-on-year gain, up 8.8% in September, following increases of 10.1% in August, 4.6% in July and 4.5% in June. Sales of apparel and accessories dipped 3.6% for the first fall in three months after rising 7.8% in August, rebounding 1.1% in July and falling 1.5% in June.
* Sales of fuels remained relatively high, up 7.1% in September, after rising 10.8% in August and 7.9% in July. The pace of increase was higher at 11.8% in June, 15.2% in May and 22.8% in January. The government has been trying to cap retail gasoline price markups by providing subsidies to refineries.
* Demand for medicine and cosmetics remained strong, up 12.6% on the year in September, marking the 17th straight increase, after gaining 13.1% in August, 8.5% in July and 4.6% in June. Sales of machinery and equipment (largely consumer electronics) rose 3.7% in September for the first rise in three months after falling 6.3% in August and 5.5% in July and rising 0.4% in June. Shortages of home appliances appeared to have eased slightly along with recent improvement in global supply chains.
* On the month, retail sales rose 1.1% on a seasonally adjusted basis in September for the straight rise after a revised 1.3% gain in August, a 0.7% rise in July and a 1.3% drop in June. The increase was higher than the median forecast of a 0.8% gain (forecasts ranged from 0.4% to 1.8% increases).
* The ministry upgraded its view, saying retail sales are “picking up.” Until last month, it said sales were “picking up gradually.”
* Industry data released last week showed department store sales marked the seventh straight year-on-year rise in September, up 20.2%, after rising 26.1% in August, 9.6% in July and 11.7% in June and 57.8% in May. Sales were still down 23.6% from pre-pandemic September 2019. The Japan Department Stores Association reported overall sales were led by continued strong demand for luxury brands and artworks as well as fall clothing amid cooler weather, overcoming the dampening effects of the typhoon seasons that forced some stores to temporarily close or shorten business hours.
* Eased border restrictions propped up purchases by foreign visitors, up 204.0% on the year, but they remained below pre-pandemic levels, down 63.7% from September 2019, the association said.