Hot weather, discounts lift Japan department store sales in July

[TOKYO] Sales at Japanese department stores rose 3.4 per cent in July from a year before as hot weather and summer discounts boosted demand for clothing, offering signs that consumer spending may be emerging from the doldrums.

While a spending spree by foreign tourists continued to support sales, rising bonuses and a pick-up in consumer sentiment led to stronger demand for cosmetics and jewellery, data from the Japan Department Stores Association showed on Wednesday.

Sales of clothing rose 2.8 per cent and those of cosmetics were up 18.4 per cent, helping total department store sales rise for the fourth straight month, the data showed.

That is welcome news for policymakers, who blamed bad weather for cooling household spending in April-June and causing economic growth to contract during the quarter.

But some analysts warn it is too early to conclude that consumption is headed for a sustained upturn. "Very hot temperatures in July may have inflated sales, just like rainy weather hurt sales in June. We need to look at figures for October-December to get a real sense of how strong consumption is," said Mari Iwashita, chief market economist at SMBC Friend Securities.

Department stores in big cities such as Tokyo and Osaka saw sales pushed up by a continued inflow of tourists.

The number of overseas visitors to Japan surged 51 per cent in July from a year earlier to 1.9 million, a record number for a single month, the government-affiliated Japan National Tourism Organisation said on Wednesday.

REUTERS