In just five months, the total number of retail and restaurant outlets in the country has declined by 1% to under 118,000 since the end of 2018, according to a study by Nikkei Asian Review.
And the decline threatens to accelerate as more consumers choose to shop online and, especially relevant for Japan, as an ageing and declining population begins to weaken consumer spending.
“The retail industry as a whole is suffering from a glut of stores,” said Takashi Sawada, president of FamilyMart, Japan’s second-largest convenience store chain which has been cutting the number of its locations for the past two years.
And even 7-Eleven Japan is slowing the rate of its store openings to its lowest level in four decades as the chain reconsiders its 24-hour trading model in response to demographic changes.
According to the Nikkei analysis, convenience stores have barely grown, registering an increase of just 0.1% since the end of last year, while four major brands – Fast Retailing, Shimamura, ABC-Mart and Nitori Holdings – have increased their store presence by only 0.6%.
The outlook also is not encouraging for the restaurant sector in Japan, where the number of outlets has declined by 2.4%, falling for the first time in three years.
Meanwhile, department stores are down 1.8% – their 11th consecutive year of decline – and the number of supermarkets has fallen by 0.3%.
It comes as a separate study by the Ministry of Economy, Trade and Industry has revealed that retail stores, including owner-operated businesses, decreased almost 4% between 2014 and 2016.
And as the value of existing stores continues to decline, the Nikkei analysis noted that retailers are taking bigger write-downs.
For example, impairment losses at companies with book-closings in February amounted to around 260 billion yen in the last financial year.
Sourced from Nikkei Asian Review; additional content by WARC staff