The severe business environment for department stores has kept this segment of the retail industry on a downward sales path for two decades.
According to the Japan Department Stores Association, department stores' annual sales dropped from ¥9.7 trillion in 1991 to ¥6.58 trillion in 2009 — a decline of more than ¥3 trillion. And the number of department store employees decreased from 138,000 to less than 100,000. Many midsize department stores in major cities are closing down.
Large shopping centers and stores that specialize in electronic products and men's suits, for example, are intruding onto the traditional turfs of department stores. Sales through the Internet, the decline among Japanese of the habit of sending summer and winter gifts and the higher costs of department stores' goods have contributed to their decline. Many years of stagnant economic growth as well as changes in people's buying preferences are also key factors.