–METI Keeps View: Retail Sales on Gradual Uptrend
–High Prices for Food, Beverages and Fuels Supporting Overall Retail Sales
–Department Store Sales Supported by Influx of Foreign Visitors
By Max Sato
(MaceNews) – Japanese retail sales posted a solid 5.8% rise on the year in September thanks to solid demand for automobiles, as largely expected, but the pace of increase decelerated from August and sales dipped a slight 0.1 percent on the month as the lingering heat wave dented demand for autumn clothing, data released Tuesday by the Ministry of Economy, Trade and Industry showed.
Sales values have been supported by elevated prices for food, beverages and fuels. 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, driving department store sales higher.
The key points from the METI’s Current Survey of Commerce:
* Retail sales rose a preliminary 5.8% on the year in September for the 19th straight year-over-year rise after rising 7.1% (revised up from 7.0%) in August, 7.0% in July and 5.6% in June. The increase was just above the median economist forecast of a +5.7% rise (forecasts ranged from 5.1% to 6.2% gains). The 7.3% rise in February remains the highest since the 8.3% increase in May 2021.
* On the month, retail sales dipped 0.1% on a seasonally adjusted basis in September for the first drop in three months following a 0.2% rise (revised up from 0.1%), a 2.2% jump in July and a 0.6% dip in June. It was slightly firmer than the median forecast of a 0.2% decrease (forecasts ranged from a 0.8% drop to a 0.2% rise).
* The ministry maintained its assessment, saying retail sales are “on an uptrend.” The three-month moving average in seasonally adjusted retail sales rose 0.7% in September after rising 0.6% the previous month.
* General merchandise sales at department stores and supermarkets marked the 25th straight year-over-year gain, up 5.6% in September, after rising 7.2% in August. Sales of apparel and accessories recorded the drop in three months, down 6.1%, after rising 0.4% the previous month.
* Sales of fuels rose 7.5% on the year in September for the third consecutive rise after rising 8.6% in August and marking their first rise in five months in July, up 3.2%. 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 as retail gasoline prices hit record highs from late August through early September.
* Demand for medicine and cosmetics remained solid, up 4.8% in September, after a 3.8% gain in August. Sales of machinery and equipment (largely consumer electronics) rose 4.7% in September for the third increase in a row after rising 5.7% in August.
Department Store Sales Continue Recovering
Industry data released Monday showed department store sales marked the 19th straight year-over-year rise in September, up 9.2%, following increases of 11.8% in August, 8.6% in July and 7.0% in June. Sales last month were down 16.7% from the pre-pandemic September 2019, when there were rush purchases ahead of the following month’s sales tax hike, but were up 2.1%, compared to September 2018.
The Japan Department Stores Association noted that despite the dampening effects of the lingering heat wave, people shopped for personal goods and clothing as they were going out and traveling more freely in the absence of Covid restrictions. Luxurious brand name products also led overall sales.
The weak yen and widely relaxed Covid border rules continued pushing up spending by foreign visitors, which rose 255.6% on the year to the highest level since February 2020. It was 29.3% above the level seen in September 2019, overcoming the drag from the pandemic.