Home | Blogs
Government Stimulus Propelled Japanese Retail Sales
Apr 08, 2010

Japanese retail sales enjoyed an unprecedented growth due to government stumulous packages; still, an anticipated prolonged deflation may induce the consumers to restrict their buying activity.

According to the Japanese government, the country sales in February this year grew 4.2% in comparison to the sales that were recorded in the last year, i.e. February 2009, and this is the top increase in 13 years, according to the news published by INVESTORS.

Due to the stimulus packages introduced by the government to encourage consumers to expend, country’s retail sales jumped aggressively in February. Consumers continued spending on electronics goods and low-emission automobiles which are supported by the government subsidies, while an additional push to the total value was given by the recent rises in prices of gasoline.

The figures indicates that stimulus measures of the government continue to be an essential assistance for personal spending in the country, as unstable job conditions weaken consumer sentiments. This means that the recovering economy of Japan as a result of robust export growth remains exposed to variation in the overseas demand. However, growing demand of machinery and automobiles from some budding economies, including China, is serving the economy of the country to recuperate from recessionary affects.

The data reveals car sales grew 15% in the month of February. Moreover, the sales of electrical appliances like flat screen Televisions grew 8.6%. Due to higher prices of crude oil, there was a 20.7% growth in gasoline sales and because of warmer-than-usual weather conditions during February 2010, spring season clothing sales improved by 8.4%. Apparel & accessories, machinery & equipment, fabrics, and food & beverages also contributed positively.

However, as consumers restricted themselves to buy luxury goods because of anxieties over job security and wages, sales at large-scale retailers dropped 4.0% year-on-year. This was the 23rd consecutive monthly drop. Annual drops were also witnesses in the sales of general merchandise.

According to a Research Analyst at RNCOS, “Regardless of the total increase in sales, a gloomy outlook is anticipated as the sustainability of government stimulus is doubtful which is projected to affect the sales. Harsh job environment is also downbeat for consumer expenses. In January (2010), Japan's jobless rate was 4.9%, a slight lesser than the record 5.6% high of last July (2009). In addition, it is possible for the consumer spending to be flimsy as sustained deflation is anticipated, which may induce the consumers to restrict themselves.”

Related Market Research Reports:
Cosmetics and Toiletries Market in China
Asian Convenience Store Market Forecast to 2012
U.S. Convenience Stores Market Outlook to 2013