Japan's department store sales fell to their lowest in nearly four decades in 2016, data showed on Friday, underscoring the fragile nature of the country's economic recovery. Sales of clothing were sluggish as Japanese consumers tightened their purse strings on slow wage growth. Spending by overseas tourists, who once flocked to buy luxury items, peaked to the dismay of department stores that have become increasingly reliant on inbound tourism, analysts say.
"It's clear department stores took a hit from a slowdown in spending by Chinese tourists, who still shop but spend less," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. "I expect consumption to fare somewhat better this year, though Japanese consumers may not boost spending much if the rising cost of imports push up grocery bills."
Department store sales fell 2.9 percent in 2016 from a year earlier to 5.978 trillion yen ($52.1 billion), sliding below 6 trillion yen for the first time since 1980, data by the Japan Department Stores Association showed.
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