Retail Sales Japan

In December 2016, the seasonally adjusted retail sales index in Japan fell by 1.6% month on month, to 103.2 from 104.9 in November 2016.

Published monthly by the Ministry of Economy, Trade and Industry. Updated till the month of December 2016 (published on February 13th, 2017).

Recent data trend:

 

Retail sales in Japan seemed to have encountered a setback in December, declining by 1.6% month on month (MoM), after a seasonal adjustment. It was a first MoM decline in 4 months. On a year on year (YoY) terms, retail sales in December was still up by 0.7%, but decelerating from 1.7% YoY in November. 

In a medium-term perspective, the decline in retail sales in December brought retail sales level squarely back to the middle of the prevailing range post consumption tax rate hike in April 2014. A stagnation seems an apt word to describe the state of retail sales in Japan.

While some pundits may find a puzzle in the stagnation, citing the tight labor market, recovering stock prices and a stable consumer confidence, we actually do not find the consumer behavior in Japan to be puzzling at all. In our view, consumers are only spending according to their means. While they may not be scared about losing their jobs now, they have no reason to feel such stability may last. Wages are not rising and the long-term sustainability of pension and healthcare in Japan remains very much in doubt. Do not blame Japanese consumers for being cautious, because such attitude is exactly how a rational economic agent should behave in the current environment.  

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

YoY% change in retail sales

 Source: METI,  JMA

Sales of chain retail stores by type

Source: METI,  JMA

The Next Release Date: February 28th, 2017 (Preliminary January data) 

                                  March 15th, 2017 (Revised January data)

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