‘Revenge spending’ lacks vigor in Japan, despite virus restrictions ending

03-Dec-2021 Intellasia | JIJI | 5:02 AM Print This Post

Although consumption is picking up in Japan after the latest coronavirus state of emergency ended on September 30, so-called revenge spending is lacking vigor as people’s values have changed during the COVID-19 crisis.

Recent economic statistics showed recovery trends, including department store sales in October. But consumers’ spending to satisfy suppressed appetite for buying has not flourished.

Some people are concerned about the possibility of the omicron coronavirus variant spreading in Japan.

According to a preliminary report released Tuesday by the Japan Tourism Agency, the total number of overnight stays by travellers stood at 32.9 million in the country in October, up by some 10 million from the previous month.

Still, the figure is about two-thirds the level in October 2019, before the coronavirus pandemic.

“People started moving little by little while carefully monitoring the infection situation,” Eijiro Yamakita, president of travel agency JTB Corp., said of the tourism trend after the full lifting of the state of emergency.

Department store sales in October this year were only slightly above the level in October 2019, when consumer spending was dampened soon after a consumption tax hike, according to data from the Japan Department Stores Association.

The sales were partly pushed up by strong demand for luxury products that continued from the time the virus emergency was in place.

“This is substitute spending. They buy something nice as they can’t go travelling,” an official from the association said.

“We don’t see many group customers or late visitors,” said Miki Watanabe, chair of isakaya pub operator Watami Co..

Restaurant sales in October failed to reach the October 2019 level, according to the Japan Food Service Association. Sales at isakaya pubs halved.

According to a survey on revenge spending by Nomura Research Institute Ltd, less than 10 percent of respondents said they would increase their consumption related to travel, eating out and karaoke from the levels before the coronavirus crisis.

Given the bleak prospects, many businesses have little choice but to pin their hopes on stimulus measures by the government, including the Go To Travel domestic tourism promotion programme.

“The omicron strain would dampen consumer sentiment if it causes an explosive infection surge in Japan,” a retail industry official said.

“Lifestyle behaviors and values that have changed during the coronavirus crisis will not return to the previous state,” NRI consultant Hiroyuki Hayashi said, adding that companies should try to meet new needs in response to the change.

https://www.japantimes.co.jp/news/2021/12/02/business/economy-business/revenge-spending-japan/

 

Category: Japan

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