Posts Tagged ‘department stores’

Consumption tax rush approaching peak time

Tuesday, February 18th, 2014

Curb your enthusiasm: Don't rush out and buy an aircon to beat the tax hike since it will probably be cheaper afterwards anyway

Curb your enthusiasm: Don’t rush out and buy an aircon to beat the tax hike since it will probably be cheaper afterwards anyway

Retailers continue to enjoy good business in the runup to the consumption tax hike on April 1, but some are a bit anxious that consumers may not understand the situation sufficiently. Tokyo Shimbun visited a few Tokyo department stores where the rush to buy is especially intense, causing them to post clarifying announcements to head off any attendant disappointment.

At Isetan, these notices are posted prominently in the furniture and bedding sections, as well as the eyeglass section, meaning departments where people order merchandise and then take delivery later. As one Isetan employee explained to the paper, the consumption tax is applied on the day of receipt of merchandise, not on the day it was ordered or even on the day it was paid for. A good portion of department store sales are order-made products, and the notices are cautioning customers to make sure they understand the date their stuff will be ready to pick up, otherwise they may end up paying more than they thought they would.

Keio department store is telling all its customers about the rule so that “there is no misunderstanding.” Daimaru Matsuzaka, near Tokyo Station, has seen sales of order-made men’s suits climb to 14.4 percent higher than last year, a new record, but the closer they get to March the more nervous they are since some suits take longer to make than others. Takashimaya in Nihonbashi is apparently the most conscientious department store, posting very detailed explanations in all its sections that insist the earlier you order something, the more likely it will be you can avoid the extra 3 percent charge.

However, a related article in the weekly Aera says that consumers shouldn’t worry that much, since there’s a good chance people will buy something now to avoid the tax hike only to end up paying more. Some retailers are not as straightforward as the above-mentioned department stores, using the rush as a means of getting customers to sign up for credit cards in order to compound their savings without realizing that in the end they’ll probably have to pay handling fees that will negate such savings, unless they happen to be frequent patrons of the store, in which case they probably already have a card. The magazine interviewed a few housewives who plan to make big purchases ahead of the tax hike.

One woman says she is going to buy all new household appliances, while another in her early 30s will buy baby shower and wedding gifts for friends who will celebrate these happy events in the near future, but as she said, “often these gifts go on sale in July, so I don’t know if I’m actually saving money by buying them now.”

A financial planner told Aera that it may be a mistake to buy some big ticket items now. Air conditioner sales, for instance, tend to be their lowest in March, which is between the cold and the hot seasons. That’s also when manufacturers put out new models, which means last year models will be quite cheap, so he advises to wait. Even after April 1, the price could be considerably less than they are now, even taking the tax hike into consideration. But automobiles and home improvement work, he says, should be ordered right now, if it already isn’t too late, because they require time before final delivery and there are no bargain sales associated with either. For mini-cars (kei jidosha), in particular, now is the time to buy since next year the car tax for buying one will increase by 50 percent.

In the end, here are items that Aera recommends buying now to beat the tax: household appliances; over-the-counter drugs that can be stored for long periods, like aspirin; gold, since the purchaser can buy at a lower tax rate and sell at a higher one; theme park tickets; long-term commuting passes and train tickets in bulk (kaisuken).

Items that Aera doesn’t recommend buying now: PCs and TVs, because they always go on sale; apparel and accessories, which tend to be much cheaper during semiannual bargain sales; real estate and stocks; gems and platinum, which, unlike gold, are more vulnerable to price fluctuations; and everyday necessities like toilet paper, which people all over the world tend to buy up whenever there is some sort of financial panic.

Matsuzakaya finds a reason to have a sale

Friday, June 18th, 2010

A reason to stand in line

A reason to stand in line

The neologism “wakeari” has entered the Japanese vocabulary in a big way, and for a specific purpose. It means “there’s a reason,” and has come to be used in retail for items that, for some reason, cannot be sold at normal prices. In terms of food it might refer to slightly damaged canned goods, or perishables that are coming close to their expiration dates (or even past their expiration dates), or vegetables that are not regulation size or shape. The word has become so popular among consumers that there are actually websites and special retailers who only sell wakeari items, with the implication that maybe they are damaged or irregular on purpose. And if you think carefully about it, anything can be used as a “reason,” including the notion that something was probably overpriced in the first place. (That’s why you occasionally see wakeari condominiums.)

Keeping this last thought in mind, department stores, which are quickly going the way of the dinosaurs, have finally succumbed to the wakeari craze. From June 16 to 22, Matsuzakaya in Ueno is having a wakeari sale, mostly of food items. Though department stores do have occasional sales, they tend to be limited fashion items that have to be sold before the next season starts, which means sale items are synonymous with unpopular items. In principle, the bargain sale as a marketing tool runs counter to the image of a Japanese department store. Department stores tend to sell higher-end merchandise at prices suggested by the manufacturer, and the more bargain sales you have the more your base customers will come to expect them, and thus they wait for them.

Matsuzakaya’s wakeari sale is being closely watched by other department stores because of the scale: Some 400,000 items comprising 1,000 different product types, from expensive canned crab, to canned exotic juices and expensive rice crackers. There are some T-shirts, kitchenware and jewelry, but overwhelmingly the items on sale are food, and they are not really leftover items that have to go. They are mostly merchandise that Matsuzakaya has purchased expressly for this sale. According to the Asahi Shimbun, there are even some items that were returned to wholesalers because they weren’t sold and Matsuzakaya bought them back just for this sale, presumably at lower prices. The savings range from 30 to 70 percent off the suggested retail prices. Some of the items are slightly damaged and some are approaching their sell-by dates, but the main “reason” all this stuff is on sale is to get people into the store. If the sale is a success they will do it again, and every other department store will probably follow suit.

So far, it seems to be a success. We visited the 6th floor of the Ueno Matsuzakaya store, where the sale is being carried out, and a line of people snaked all the way to the other end of the floor. They were only letting in about two dozen people at a time.

Notes on the end of the department store (as we know it)

Sunday, January 31st, 2010

Shop til you drop...from boredom

Shop till you drop…from boredom

The announcement that the Seibu department store in the Mullion twin building complex in Ginza will close at the end of the year has occasioned a lot of nostalgic ruminations in the media, even though the complex itself didn’t open until 1984. Seibu is, relatively speaking, a youngster in the annals of the Japanese department store. The older, established stores, like Mitsukoshi, Matsuzakawa and Takashimaya, are still around (though struggling), which is really quite surprising since the whole department store paradigm became passé after the bubble era. If the younger stores like Seibu, Hankyu (which just announced it would soon close its iconic Kyoto store) and Tokyu are biting the dust before their elders it’s mainly because their initial function had less to do with retail sales than with beefing up their respective owners’ main businesses, namely railroads.

The older stores had their roots in the mercantile culture of old Edo or Nagoya or Osaka. The newer stores were built by railway companies that needed something that  would make people use the trains on the weekends. Before the 1970s there were only small grocery stores and company-owned electronics dealers in the suburbs. For the full shopping experience, you had to get on the train and go to an urban center.

So railway companies bought land at main terminuses and built department stores there. Seibu’s was Ikebukuro Station. These department stores thrived because once people started having disposable income in the the 1960s they wanted to spend it. So the companies built other department stores, and not necessarily at their own terminuses.

Continue reading about department stores in Japan →

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