Posts Tagged ‘K’s Denki’

Electronics retailers likely to phase out point systems

Monday, November 15th, 2010

Yamada's Nabi store in Shibuya

Yamada's Labi store in Shibuya

Thanks to the eco-point campaign implemented by the government to spur consumption and encourage the use of “green” appliances, electronics retailers have enjoyed a banner year. Almost every one has seen record sales. The upstart Yamada leads the pack, with ¥1.14 trillion in revenues for the first half of the fiscal year (April-September), the first time any electronics retailer has broken the trillion-yen mark for a six-month period. That translates as ¥47 billion in business profits, an 87 percent increase over 2009, and ¥28 billion in net profits, a 72 percent increase over the same period last year.

The eco-point system, which rewards consumers who buy certain energy-saving goods with points that can be redeemed for other goods later on, is the reason for this windfall, but retailers are worried that sales will drop considerably after Dec. 1, when the number of points allowed per purchase will be cut in half. Retailers are making a big push before then, and competition is fierce. The real fear is not so much the loss of the eco-point incentive, which is scheduled to end altogether in March, but that the incentive itself has been so successful people won’t want or need to buy anything after it’s finished.

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