Japanese Department Store Sales Recover to 90% of Pre-Pandemic LevelsEconomy Society
Department store sales across Japan rose by 13.1% in 2022 to ¥4.98 trillion, according to a report by the Japan Department Stores Association. Restrictions on movement, introduced to prevent the spread of COVID-19, were lifted in late March 2022, and since then the number of customers has gradually been recovering. Following the significant relaxation of border measures from fall 2022, overseas visitors have also begun to return, leading to a 2.5-fold increase in duty-free sales compared to the previous year.
The declaration of a state of emergency in 2020, at the start of the pandemic, meant that businesses had to curtail the days they operated and shorten opening hours. Sales fell by 25.7% year-on-year to ¥4.22 trillion—such a low level was last seen when they dropped to ¥4.65 trillion in 1975. Now life is gradually returning to normal. In 2022, sales were only 11.1% lower than 2019, before the pandemic.
Comparing monthly sales from 2020 to 2022 with those for 2019 shows that sales have been approaching pre-pandemic levels from October 2022. (Note that a drop in sales in October 2019 due to the consumption tax hike accounts for the positive swing in October 2022.)
Prior to the pandemic, tourists from China had driven inbound demand. However, due to recently reinstated strict border measures, these sales have not yet returned. In 2023, it seems it will be key to regain the momentum that Chinese consumers generate.
Department store sales peaked at ¥9.71 trillion in 1991, toward the end of the bubble economy. After the bubble burst, the ensuing deflationary economy made consumers thriftier and sales gradually declined. Since 2000, the global boom in fast fashion and the rise in online shopping have been slowly pulling consumers away from department stores, a trend compounded more recently by the hit from the pandemic.
(Translated from Japanese. Banner photo: Department stores in Ginza. © Jiji.)