Summer Heat, Oil and Olympics Boost Japanese Retail Sales

01 September 2004

The sticky combination of record summer temperatures and rising oil prices saw Japanese retail sales climb 0.8% in July according to the nation's Ministry of Economy, Trade and Industry.

The year-on-year rise reversed four months of declining figures, but economists cautioned against believing the country's spending drought was at an end, particularly since wages have not increased to sustain growth.

Sales of machinery rose 7.6% compared to the same month last year as sweltering temperatures encouraged purchases of air conditioners and refrigerators.

Drink sales were also up, but the reduced expenditure on fresh food caused an overall slump in food-and-beverage sales of 1.2%.

Although convenience and speciality stores benefited from the rise in spending, large-scale retailers suffered a 1.5% year-on-year slide in sales as consumers chose to shop closer to home, according to Barclays Capital chief economist Mamoru Yamazaki.

Rising crude-oil prices and summer demand pushed up gasoline sales by 9.5% compared with last year, while purchases of electronic home appliances such as DVD recorders and televisions increased, driven up by the Olympic Games.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff