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Retail Marketbeat Report

Isao Suga • 20/10/2020
 

Apparel Retailers Struggle

Overall retail sales (preliminary figures included) in the June-August period reached JPY37,135 billion, down 2.01% y-o-y, a significant recovery from the 10.26% y-o-y slump of the March-May period. Sales grew in ten F&B product categories, including convenience store and non-store retailing such as e-commerce and mail order, but general merchandise sectors including department stores and General Merchandise Store, in addition to apparel and accessories continued double-digit negative growth y-o-y. The COVID-19 pandemic has accelerated the demise of department stores, which have been sluggish for some time. The Nakago Fukushima, Sogo Tokushima, Sogo Seibu, Seibu Otsu, Seibu Okazaki and Takashimaya Konandai stores all closed in August. The Mitsukoshi Ebisu store is scheduled to close in February next year. The department store crash reflects the decline of the major apparel sector, for which the stores were the primary sales channel. Apparel firms have been hit hard by the pandemic, with urgent cost-cutting required. Firms such as TSI HD, World, Onward HD and Sanyo Shokai are reducing headcount and shuttering stores and brands to strengthen financial positions.

Retail Store Formats Evolve

Prime retail rents in Q3 were flat in Shibuya, down JPY20,000 in Shinjuku, and remained mostly the same in other markets. New format retail stores emerged in the quarter amid pressures over falling rents. Cosmetics brand Orbis opened its first concept shop in Omotesando, while Shiseido opened a brand flagship store in Ginza, with both new stores incorporating beauty experience features. The try-and-buy presentation retailer “b8ta” attracted attention with new stores at the Yurakucho Denki Building and the Shinjuku Marui Main Building. As the consumer environment has changed the retail industry is searching for new services to offer.

Reopening and Regeneration of the Parks

The state of emergency was lifted at the end of May. The Go To Travel stimulus campaign, launched at the end of July, was extended to Tokyo from October, with movement restrictions eased. Park facilities under the Park PFI program re-opened in the quarter. Mitsui Fudosan opened "RAYARD MIYASHITA PARK" in Shibuya in July, and “RAYARD Hisaya-odori Park" in Nagoya City in September. Besides, “SHUKUNOVA” in Shinjuku also opened in July, together with “Ohori Terrace” in Fukuoka City and “BEACH⇔PARK LIVING” in Yokosuka City in September. The Park PFI program is designed to revitalize shopping parks while providing a safe, open space with reduced exposure to coronavirus infection.

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