Japan’s household spending fell for an eleventh straight month in August and real wages marked half a year of declines, as consumers struggled to return to their pre-pandemic purchasing habits.

Household spending declined 6.9% in August from a year earlier, government data showed on Friday, matching a median forecast in a Reuters poll. The year-on-year decline in the household spending in August marks the longest period of contraction since a 15-month stretch to May 2017.

However, the pace of decline has slowed after hitting a record 16.2% in May, when people stayed at home to prevent the virus infection under the nationwide shutdown. Compared with the previous month, household spending rose 1.7% in August after a 6.5% decline in July.

In the April to June quarter, annualized household expenditures in Japan totalled 266 trillion yen (US$2.5 trillion), down 9% versus the previous quarter. Monthly retail sales in July were 3% lower than in June.

Separate data showed the nation’s inflation-adjusted real wages fell 1.4% in August from a year earlier, down for the sixth straight month, reflecting a big drop in overtime. In addition, cash and deposits held by households reached a record 1,030 trillion yen (US$9.76 trillion) at the end of June, up 30 trillion yen (US$284.2bn) from three months earlier.

“We expect the overall economy including consumer spending will pick up as the economic activity restarts,” said Yusuke Shimoda, senior economist at Japan Research Institute told Reuters. “But people remained cautious about risks to get the virus infection and wages are expected to worsen further, so the pace of recovery in consumer spending will likely be limited.”

The slower uptake of e-commerce and online shopping compared to other markets was cited as another contributing factor for the market’s lower spend figures. A 2019 survey by Statista found that 16% of Japanese people said they had not bought anything on the internet over the previous year. This is the highest level among advanced economies and fourth highest among the 45 economies including developing ones.

However, the pandemic has naturally accelerated the shift to online shopping, with data from Japanese data analytics company Nowcast and credit card issuer JCB showing e-commerce sales in Japan have risen more than 20%, year-on-year, since April.

After the Japanese government lifted its COVID-19 state of emergency in May, 46% of consumers said they would continue or increase online clothing purchases, according to the Boston Consulting Group, and 14% would do so for perishable food.

Sourced from Reuters, Nikkei Asian Review