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No sharp downturn in consumption reported in wake of tax hike

JIJI

Sales of various items have not shown a sharp downturn so far since the consumption tax was raised to 8 percent from 5 percent on April 1, according to data compiled by Jiji Press.

Sales have been growing for some food items that are difficult to stockpile and at some restaurant chains, showing for most people buying power remains solid despite the tax increase, retailers said.

But, following a surge in last-minute demand in March, department stores have experienced a fall in sales, mainly concerning high-end items.

Their sales were down by 10 to 20 percent from a year earlier in the first six days since the tax increase, according to major department stores.

Sales at four major department store operators grew by 20 to 30 percent in March, reflecting the high popularity of jewelry and imported brand-name products, before a major drop early this month.

Many of the firms said the fall was in line with expectations.

“The result has not been bad,” said an official at Isetan Mitsukoshi Ltd., a unit of Isetan Mitsukoshi Holdings Ltd.

Department store operators have made efforts to curb the expected sales downturn.

Sogo & Seibu Co., a unit of Seven & I Holdings Co., saw sales of men’s dress shirts rise after Tuesday’s launch of a promotion campaign for Cool Biz office wear for summer. Sales kicked off about two weeks earlier than usual.

“New items have been supported by shoppers,” a marketing official at the firm said.

Supermarket chain Aeon Co. said that although it saw drops of 5 to 10 percent in overall sales and the number of shoppers between Tuesday and Sunday, sales of food items increased Saturday and Sunday compared to a year earlier.