Tokyo Dec dept store sales fall 3.2 pct year-on-year; 36th drop in 37 months

Department store sales in Tokyo fell 3.2 pct in December from a year earlier to 218.9 bln yen, the 36th decline in 37 months, the Japan Department Stores Association said.

For the whole of 2004, sales fell 3.4 pct to 1.93 trln yen.

The report, covering 27 department stores operated by 13 companies, is released about a week earlier than nationwide sales for both department stores and supermarkets, and is thus viewed as an early indicator of nationwide consumer spending trends.

The government recently decided, however, that Japanese department store sales may not be a good gauge of overall consumer spending. Late last year it removed department store sales as one of the components making up the index of current economic conditions.

As a result of structural changes in the retail sector, department store sales were replaced by supermarket and convenience store sales in the leading index.

Final data is expected to show nationwide department store sales in 2004 fell below 8 trln yen for the first time since 1988.

Nationwide department store sales for the January-November period totaled 6.96 trln yen, down 2.9 pct from the same period a year earlier, according to the Japan Department Stores Association.

Sales are likely to have fallen on a year-on-year basis for the seventh year in a row. Department store sales peaked at 9.7 trln yen in 1991, and have been trending downward since.

Sluggish consumer spending amid Japan's most severe economic downturn in five decades is primarily to blame. But so too is the opening of large shopping malls, often filled with a new breed of specialty and discount stores which have lured away customers.

At least 100 applications to build big shopping centers in Japan are believed to have been filed in 2004, up about 50 pct from the previous year, the Nihon Keizai Shimbun reported last week.
Between January and November, some 94 applications were filed to build shopping centers with at least 10,000 square meters of floor space, the business daily said.

That number already exceeded the 65 applications filed for the whole of 2003, and is the highest number since the large-scale retail store law was revised in 2000 to make it easier to open big shopping centers, the report said.

In December, the department stores association said sales fell in five of the eight product categories, accounting for 70.8 pct of total revenue.

Clothing sales, accounting for 29.4 pct of the total, fell 8.1 pct from a year earlier. Sales of food, accounting for 31.9 pct, declined 3.1 pct.

Sales of household appliances, the fifth-largest category accounting for 5.6 pct of total sales, fell 2.4 pct. Sales by restaurants and cafeterias, accounting for 2.1 pct of revenue, declined 5.7 pct. And sales of miscellaneous items, accounting for 1.8 pct of the total, dropped 0.3 pct.

But sales of sundries like jewellery and cosmetics, the third-largest category at 15.6 pct of the total, rose 0.4 pct, while sales of personal belongings such as handbags, shoes and accessories, the fourth-largest category at 12.8 pct of total revenue, rose 2.1 pct.

Revenue from services surged 32.6 pct, but still had a negligible impact on overall revenue as that was the smallest category accounting for just 0.8 pct of total sales.

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