Retail, Wholesale & Distribution

July 2005

Japan June Overall Retail Sales Up 3.1% On Year
Japanese retail sales rose 3.1% on year in June, fueled by higher gasoline prices and continuing strong car sales, marking the fourth straight month of gains, the government said Thursday. The figures, released by the Ministry of Economy, Trade and Industry, also highlight that consumption was solid in the second quarter, in which retail sales rose 3.3% on year. Fuel prices jumped 16% due to higher crude oil import costs, while automobile sales, especially sales of new compact models, rose 7.5%, he said, noting fuel contributed 1.35 percentage points to the overall retail sales rise. "Being the fourth straight rise in sequential terms, this should be viewed in a positive light, offering more evidence that private consumption has found a firmer footing," said JP Morgan analyst Ryo Hino in a report. The government's campaign to get white-collar workers to put away their suits and ties during the sultry summer months paid off with a 2.6% rise in clothing purchases in June, an official briefing reporters on the data said. Mother nature also nudged along the administration's "Cool biz" initiative with hotter weather last month. Temperatures were 1.7 degrees Celsius higher than the average for June and 0.1 degree warmer than the same month last year, the official said. "'Cool biz' helped to some extent in clothing and accessory sales, especially shirts, shoes and belts," he said. Despite the string of increases in retail sales, the METI official said it was too early to upgrade the government's outlook for retail sales. He indicated that the solid rises may not continue into next month following the strong retail sales in July 2004, bolstered by spending on such items as flat-panel TVs in the run-up to the summer Olympic Games in Athens. "Retail sales continue to be satisfactory," he said, reiterating the present view that "a gradual recovery can be seen." Sales at large-scale retailers fell 2.1% on year, after adjustments for the change in the number of stores. Web site: http://www.meti.go.jp/english/statistics/index.html (Dow Jones, July 28, 2005)

June Department Store Sales Up 1.4% On Year
Japan's nationwide department store sales rose 1.4% on year in June to Y614.40 billion, adjusted for change in the number of stores, the Japan Department Stores Association said Monday. It marked the first on-year climb in two months, and comes despite preliminary figures for top Tokyo-area department stores, which showed that sales fell 1.1% in June. Department store sales got a lift from the government's "Cool Biz" policy to encourage employees to dress lightly during the hot summer months as well as from the impact of store renovations and special sales, the Japan Department Stores Association said of the Tokyo stores data. A pickup in personal consumption is a good sign for the economy, as it comprises about 55% of the nation's gross domestic product. Nationwide department store sales fell 1.3% on year in May, partly due to unseasonably cold weather weighing on summer clothing sales, the Japan Department Stores Association said. Sales rose less than one-tenth of a percent in April and fell 2.9% on year in March. In June, clothing, which makes up the highest proportion of department store sales, totaled Y224.47 billion, up 1.4% from the previous year. Sales of foodstuffs, the next-largest component, were flat at Y159.95 billion. The association compiled its data based on a survey of 97 companies and 281 stores. Web site: http://www.depart.or.jp (Dow Jones, July 25, 2005)