Retail Sales Japan

Retail sales up by more than 2% for four consecutive months.

Published monthly by the Ministry of Economy, Trade and Industry. Updated till the month of June2017 (published on July 28th, 2017).

Recent data trend:

In June 2017, retail sales rose by 2.1% year on year(YoY), maintaining a healthy positive growth trend. A broad range of sub-sectors contributed to the growth. Vehicle sales was up by 8.5% YoY, apparel and accessories was up by 5.1% YoY. 

Retail sales are seeing a steady recovery since late 2016 and in the last 4 months in particular. Since March 2017, the YoY growth in retail sales has exceeded 2%, a remarkable growth for Japan. We are still skeptical about the sustainability of the growth as it is not accompanied by increasing wage rate. Despite the tight labor market condition, wages in Japan give little indication to rise. In May 2017, the real wage growth was at 0.0% YoY. Without an income to support the growth, private consumption cannot keep on growing beyond a one time bout. The depreciation in yen between 2016 and 2017 is helping to boost consumption through inbound tourism, but with the yen already at the weaker end of the range in the last 30 years after adjusting for inflation differential, retail industry in Japan should not count on yen to continue to weaken for prolonged period. Eventually, wages need to start to rise to sustain private consumption.  

By type of stores, department store sales rose by 0.2% YoY, a first positive growth since October 2015. Department stores have continuously been losing out among retail store types over the last 20 years. Since 2013, there have been some sign of revival, mostly owing to inbound tourism, but the recovery has not been uneven. After enjoying positive growth in 2013-2015, their sales went down again in 2016 as yen turned to rise. It will be interesting to see if they can stage another recovery in 2017.

Brief overview of Retail Sales:

“Retail sales” is published as a part of “Current survey of commerce”, a survey published monthly by the Ministry of Economy, Trade and Industry. It is a comprehensive survey on retail activities in Japan and it correlates well to the overall private consumption trend in Japan. According to the statistics, retail sales totaled in 137.6 trillion yen in Japan in 2012. By type of retail stores, food and beverage accounts for 32.0% of the total, followed by motor vehicles (12.1%), fuels (9.8%) and general merchandise (9.2%). Comparative figures in the U.S. retail sales in 2012 were 14.5% for food and beverage, 20.3% for motor vehicles, 12.7% for gasoline station and 15.1% for general merchandise. Retail sales in Japan peaked in 1997 at 146.3 trillion yen before it started a sharp decline to 132.3 trillion yen in 2003. It was a period of time when Japan faced the first nationwide financial crisis since WWII. Since 2003, retail sales seem to be on a moderate recovery path with a brief setback in 2010 amid the great global recession.

 

For more information, visit the official government page

Retail Sales by Sub-sectors

YoY% change in retail sales

Sales of chain retail stores by type

Source: METI,  JMA

The Next Release Date: August 15th, 2017(Revised June data)

                                        August 30th, 2017(Preliminary July data)

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