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TOKYO (MNI) – Combined sales at Japanese department stores in July
are forecast to be little changed from a year earlier, possibly slowing
from +0.3% y/y in June and slipping back into negative territory, a
Market News International survey showed.

The Japan Department Stores Association will release July sales
data at 1430 JST (0530 GMT) on Thursday, Aug. 18.

Sales in June posted the first year-on-year gain since +0.7% in
February, following -2.4% in May, -1.5% in April and -14.7% in March.

Four out of the seven department store chains surveyed reported
year-on-year gains in their July sales while three said their sales
fell. This is a slight deterioration from increases at five groups and
decreases at two in June.

Amid fears of power supply shortages this summer, the government
has urged businesses and households to slash electricity consumption by
limiting the use of air conditioners among other measures, which has led
to more relaxed dress codes at many workplaces.

This has boosted demand for casual business clothing in July and
supported sales of bedding and pajamas that help cool off body
temperatures, department store spokesmen said.

But at the same time, typhoons and a temporary plunge in
temperatures kept some shoppers away from stores last month, they said.

The MNI survey also showed that department store sales appeared to
be slowing in the first half of August.

Three out of five department stores reported year-on-year falls in
sales between Aug. 1 and Aug. 15 while two said their sales rose on the
year.

The recent stock market sell-off may have hurt consumer sentiment
and led to slower sales.

A spokesman at Takashimaya said sales of jewelry fell about 1% on
year in the first half of August, down sharply from +14% in the whole of
July.

Sales of jewelry tend to mark year-on-year gains when the benchmark
Nikkei stock index stays above 10,000, he said. The Nikkei closed at
Y8,963.72 on Aug. 12, down sharply from Y9,965.01 on Aug. 1.

Sales of luxury items including jewelry accounted for 4% to 5% of
department store sales in recent months.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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