The rise in Japan's sales tax to 8 percent that took effect last week has driven a boom-and-bust in sales of high-priced items like jewellery but passed with little impact on sales of daily necessities, two leading Japanese retailers said on Tuesday.
Tuesday's hike of the consumption tax to 8 percent saw mixed reactions in Tokyo and Osaka. While consumers in both cities seemed resigned to the increase, there was concern about the additional transportation and food costs.
In Osaka, as in other parts of the country, Monday night saw long lines at department stores, supermarkets and gas stations as people got in under the wire to buy clothes and household items, canned and packaged foods, and gasoline before the increase. Some shops dropped their prices as well to take advantage of the last-minute shopping spree.
Japan's core consumer prices rose for a ninth straight month in March from a year earlier and labour demand improved – further evidence the economy is making headway against years of deflation and stagnation.
Ministry of Finance data showed household spending and retail sales weakened in February as snowstorms across Japan kept many consumers at home, but there are already signs that sales are accelerating this month as shoppers rush to beat a sales tax hike on 1 April.
Japanese retailers are seeing rush demand ahead of the tax increase next Tuesday as fears grow that the hike will take a bite out of consumer spending and derail the nascent economic recovery.
Electric toothbrushes, family-size fridges and washing machines are selling fast at household and electronics chain Bic Camera, where sales in February were up almost 14 percent from a year earlier, despite unusually poor winter weather that might have otherwise kept shoppers at home.
Japanese retail sales rose 4.4 percent in January from a year earlier, government data showed on Friday, marking a sixth straight month of gains as consumers rushed to buy cars and other goods before a sales tax increase in April.
The rise compared with economists' median forecast for a 3.8 percent increase and followed a revised 2.5 percent gain in the previous month, the data from the Ministry of Economy Trade and Industry showed.
For related articles, visit CNBC.
Business leaders, including top executives at Lawson Inc. and Suntory Holdings Ltd, are joining forces to back the legalisation of casinos in Japan, a proposal that could open up what is estimated to be the world's second largest gaming market.
Lawson Chief Executive Officer Takeshi Niinami and Suntory Executive Vice President Shingo Torii are among corporate and academic leaders forming a group to support a legalisation bill introduced by lawmakers, said Hiroshi Mizohata, a former head of the Japan Tourism Agency, who will also be a member.
Japanese retail stocks surged over the past year, but investors will need to get more selective ahead as the country's looming consumption tax hike won't hit all retailers equally.
Japan's department store sales in November rose 2.4 percent from a year earlier on a same-store basis, marking the first increase in two months as consumers stepped up buying ahead of the consumption tax hike in April.
The Japan Department Stores Association also credited the rebound to improved confidence backed by expectations for higher winter bonuses.
Cashmere sweaters at Uniqlo. Gourmet coffee and ice cream at 7-Eleven. These incongruously premium offerings by two of Japan's biggest retailers are part of a strategy to lift profit margins by enticing thrifty shoppers to splurge on little luxuries.
Two major Japanese retailers might decide to leave product prices unchanged after the consumption tax is raised to 8 percent next April.
"It is our duty to offer an item, say currently priced at JPY98 (USD1), at the same price even after the tax rate rises to 8 percent," Shohei Murai, president of supermarket chain Daiei Inc., said at a news conference on Thursday in Tokyo. "We will do all we can not to raise prices," Murai said.