An unseasonably cool summer has chilled the country’s retailers, prompting sector leader Ito-Yokado Co. to cut its half-year earnings outlook by 41.4 percent.
The supermarket chain said Friday it is likely to report a 17 billion yen group net profit for the six-month period through August, compared with the original forecast of 29 billion yen.
The revenue estimate was cut by 0.7 percent to 1.77 trillion yen.
Company officials said July temperatures — the lowest in a decade — dealt a blow to sales of seasonal merchandise such as clothing and lifestyle-related items, including air conditioners and swimsuits.
“We didn’t expect (sales) to drop this far,” said Ito-Yokado President Sakae Isaka. “It is a bad situation.”
He said that compared with sales in July 2002, clothing dropped 3 percent and lifestyle items fell 6 percent. The company expects half-year sales from outlets open at least a year to drop some 2 percent.
On a brighter note, the firm said August sales so far have been on par with the previous year’s level.
The company pledged to lift its fortunes during the second-half beginning in September, saying it will offer popular items in a timely manner by leveraging its relatively lean inventory.
Reflecting the low mercury readings, more shoppers have been buying cool-weather products like long-sleeved shirts and warm food items, according to the officials.
Ito-Yokado is not alone. Aeon Co. warned last week it is cutting its half-year parent-only earnings outlook by 60 percent to 3 billion yen.
50% off vegetables
Ito-Yokado meanwhile said it will sell tomatoes and seven other kinds of vegetables at half price at 175 outlets on Saturday and Sunday.
The sale is intended to stimulate demand amid rising produce prices caused by the unseasonably cool temperatures this summer.
The seven vegetables, which include radishes, onions, cabbages and potatoes, are domestically produced, mainly in Hokkaido, Ito-Yokado said.
Radishes will sell for 88 yen each, down from 198 yen last week, and onions at 20 yen, usually 88 yen.
The sale is possible in part due to direct procurement from growers, according to Ito-Yokado, which expects to sell a total of 1,200 tons during the two days.
Typhoon payments Kyodo News Insurance payments for damage caused by Typhoon Etau, which swept through the nation Aug. 8 to 10, are expected to top 5 billion yen.
As of Aug. 15, the total damage estimate stood at 5.07 billion yen for 10,086 cases, with payments for fire insurance expected to reach 3.49 billion yen for 8,538 claims, the General Insurance Association of Japan said Friday.
It estimated that some 1.26 billion yen for 521 claims under other types of insurance, such as policies covering movable assets, and a total of 319 million yen in claims for 1,027 vehicles covered by auto insurance, will be paid out.
Typhoon Etau was the season’s 10th typhoon.