— See Separate Table For Detail

TOKYO (MNI) – Japanese department store sales are expected to have
slowed to nearly flat in November from a slight on-year rise of +0.6% in
October, mainly because November this year had only four Sundays, one
fewer than a year before, a survey by Market News International found.

But demand for luxury items such as jewelry and designer goods
appears to be higher, thanks to improving share prices.

The Japan Department Stores Association will release November sales
figures at 1430 JST (0530 GMT) on Monday, Dec. 20.

All of the nine major department stores polled by MNI reported that
the year-on-year growth in sales slowed in November from October.

That suggests the year-on-year change in combined nationwide
department store sales in November appear to have decelerated from the
0.6% rise in October, which was the first gain in 32 months.

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

Some department stores told MNI that they saw weak corporate demand
for year-end gifts, and that the calender factor (one fewer Sunday)
dented November sales.

But a spokesman at Takashimaya said, “Excluding the calender
factor, the trend of sales remained steady in November, compared with
October.”

About sales in early December, three of the nine surveyed
department store chains said their sales marked year-on-year drops,
another three reported gains, and the remaining three reported sales
were nearly flat.

Some department stores said relatively high temperatures hurt sales
of winter clothing in early December. Apparel sales accounted for around
35% of overall department store sales in fiscal 2009.

Meanwhile, the recent improvement in household incomes and share
prices since November has supported department store sales.

“Sales of jewelry and fine arts showed double-digit gains in
December,” said a spokesman at J. Front Retailing, the holding company
of Daimaru and Matsuzakaya.

A spokesman at Odakyu said, “Our customers are making faster
decisions on purchases as the (Nikkei) stock index has risen above
10,000.”

The weighted average of yearend bonuses paid by 165 major firms
showed a 2.52% gain this year, improving from a 15.01% drop seen last
year, according to the business lobby Nippon Keidanren.

Some department stores reported Sino-Japanese territory disputes
had a negative impact on their November sales. But a spokesman at Keio
said, “Demand from overseas travelers has been recovering gradually.”

According to the association, spending on duty-free items by
visitors from overseas including Chinese citizens showed a 7.0% fall y/y
in October, the first drop since -0.6% in October 2009, following +18.7%
in September, +16.5% in August, +51.9% in July and +99.1% in June.

Sales to customers from overseas account for less than 1% of
overall department store sales.

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

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