— See Separate Table For Details

TOKYO (MNI) – Japanese department store sales in January appeared
to have posted a smaller year-on-year drop than the 1.5% fall in
December, as snow storms in many regions boosted winter clothing sales,
a Market News International survey showed.

The Japan Department Stores Association will release January sales
data at 1430 JST (0530 GMT) on Friday, Feb. 18.

Combined sales in October rose 0.6% on year, which was the first
gain in 32 months. But the sales posted a 0.5% drop on year in November
and a 1.5% decline in December.

The association’s data are adjusted to facilitate comparisons on a
same-store basis.

Six of the eight major department stores polled by MNI reported
that the year-on-year change in sales improved in January from December,
while two said their sales deteriorated.

That suggests the year-on-year change in combined nationwide
department store sales in January would show a better performance than
the 1.5% fall in December.

Store sales in January were pushed up by apparel sales, which
account for around 35% of overall department store sales in fiscal 2009,
the latest year available for the breakdown.

Department store officials told MNI that freezing temperatures in
many regions boosted sales of winter clothing last month.

The temperature in Tokyo averaged at 5.1 degrees centigrade in
January, down from 7.0 degrees in the same month of 2010, according to
the Japan Meteorological Agency.

Moreover, a spokesman at Takashimaya, one of the largest department
stores in Japan, said, “The environment surrounding consumption has been
improving, thanks to a recovery in incomes.”

Average base wages rose 0.1% on year in December, posting the first
gain in 32 months, data from the Ministry of Health, Labor and Welfare
showed.

A spokesman at Sogo & Seibu said, “Consumer spending is becoming to
more active, thanks to brighter signs seen in the Japanese economy
recently.”

Share prices, a leading indicator for economic growth, have been
firm. The monthly average of the Nikkei 225 stock index stayed above a
key level of Y10,000 in both December and January.

Industrial production, a coincident indicator, is estimated by the
government to rise 7.4% in January-March from the previous quarter,
showing the first gain in three quarters.

Meanwhile, department store sales remained solid in early February,
backed by continued low temperatures and improving economic conditions.

Sales at Sogo & Seibu showed a firm 3-4% gain on year in a period
from Feb. 1 to Feb. 13, up from a gain of around 1% in January.

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

[TOPICS: M$J$$$,M$A$$$,MAJDS$]