Since late December I wonder what is going on with the local economy. As a simple example I am surprised that this year at my local supermarket Aeon I cannot find any surprising great deals. A year earlier, I had noticed several offers of clothes or food so amazing, even though I did not really need to buy these goods then, the quality/price offer caused me to buy for stock. This year I have observed some sales promotions, but the price ranges are at least 20% higher compare to a year ago. I wonder when prices will drop again, because customers are not buying and the clothes on the racks are still the same since late November. I am speechless, because I have not seen such a slow moving consumer market in Japan so far.
Based on the information from Nikkei Shimbun sales at supermarkets have dropped 0.6% on the year in December to 1.25 trillion yen (fifth straight monthly fall). Or then even worse, sales for all of 2011 fell 0.8% to 12.7 trillion yen, down for the 15th consecutive year. Are we now at a point in time, when no more further costs can be cut and have reached rock bottom in pricing?
The last few years is forcing many Japanese to rethink their viewpoint on their neighbors. Although historically the relationship of Japanese and Chinese has not been so smooth, recently cash rich Chinese came to Ginza to buy an amazing amount of Japanese goods. As a consequence the local economy could profit quite a bit. So far only few local businesses focused their marketing strategy on the present ongoing Chinese New Year. VenusFort in Odaiba has launched an intensive sales campaign targeting Chinese tourists during the Chinese New Year holidays. Quick actions for Eastern Japan is needed, because according to Yomiuri Shimbun the tour routes for Chinese tourists, which were previously concentrated around the Tokyo area, are moving towards the west. It seems that before the nuclear crisis, 70 percent of tour destinations were in eastern Japan and 30 percent in western Japan. Contrary now since the latter half of 2011, these numbers switched so 30 percent were in eastern Japan and 70 percent were in western Japan.
I can only wonder what the near future will bring, because corporate saving rates are up like never before, while I have never seen such a shopping hesitant Japan. When will movements in the market start again?
Brought to you by Sibylle Ito (シビル伊藤)