Sales at Japan's major department stores jumped before tax hike

The nation's four major department store chains saw double-digit growth in their sales in September from a year earlier as consumers hurried to buy luxury items before the consumption tax hike to 10 percent from 8 percent, their monthly reports showed Tuesday.

The levels of sales growth at Takashimaya Co., Isetan Mitsukoshi Holdings Ltd., J. Front Retailing Co., and Sogo & Seibu Co. were similar to those seen in March 2014 prior to the previous consumption tax increase to 8 percent from 5 percent.

But some of the retailers said their sales increases were exaggerated by the poor results in the same month of the previous year when natural disasters such as typhoons and a major earthquake in Hokkaido hurt consumption.

The four chains said they saw strong sales of luxury brand products such as watches, handbags and jewelry.

Takashimaya said its sales in the month grew 33.2 percent, while Isetan Mitsukoshi saw its sales rise 23.7 percent. Sales climbed 20.2 percent at Sogo & Seibu and 30.8 percent at J. Front Retailing, the operator of Daimaru and Matsuzakaya stores.

J. Front Retailing and Isetan Mitsukoshi said they do not expect any declines in their sales from October to be as steep as the last time the tax was raised, while Takashimaya said consumption growth already shows signs of slowing.

"We can't be too optimistic, but we think (a downturn) will not be so big," an Isetan Mitsukoshi official said.

A Takashimaya official said, "Overall consumption lacks strength, and we will need to make conservative estimates."

Sogo & Seibu said it plans to hold gourmet fairs featuring various take-out food and other sales events to minimize likely sales falls in the coming months.