Monday, August 24, 2009
More bad news
It was reported today that supermarket sales dropped 4.8% in July from a year earlier on a same-store basis for the eighth straight month of decline. Sales totaled 1.09 trillion yen at 8,150 outlets operated by 70 companies, according to the Japan Chain Stores Association.
Thursday, August 20, 2009
more telling statistics, today it was reported that convenience store sales were DOWN 7.5% in July which is down for 2 straight months. According to the Japan Franchise Association folks who actually walked into their shops were down 4.5%.
I think this is a somewhat damning truth to the underlying problems here in Japan. "Convini" as they are known over here sell just about everything that supermarkets do and are very popular for the discount lunchbox buying crowd. For example you can pickup 2 riceballs, in a variety of flavors along with a drink and something sweet for about 500 yen. About 5 bucks. This compares very favorably with McDonald's new lunchtime menu campaign.
Convini sell stamps, concert tickets, hot food and allow people to browse their magazines essentially for free. During the summer heat which is easily north of 85 degrees and with humidity that can reach 70 or even 80% the idea of visiting your local airconditioned convini to read and cool off is quite inviting.
Yet sales are down and customers entering the shops are down too.
a very bad sign.
more later
I think this is a somewhat damning truth to the underlying problems here in Japan. "Convini" as they are known over here sell just about everything that supermarkets do and are very popular for the discount lunchbox buying crowd. For example you can pickup 2 riceballs, in a variety of flavors along with a drink and something sweet for about 500 yen. About 5 bucks. This compares very favorably with McDonald's new lunchtime menu campaign.
Convini sell stamps, concert tickets, hot food and allow people to browse their magazines essentially for free. During the summer heat which is easily north of 85 degrees and with humidity that can reach 70 or even 80% the idea of visiting your local airconditioned convini to read and cool off is quite inviting.
Yet sales are down and customers entering the shops are down too.
a very bad sign.
more later
Tuesday, August 18, 2009
Retail news
It was announced today that retail sales were DOWN 11.7% for the past month. This continues a string of 17 straight months of reduced retail sales figures.
This is not surprising and the big downturn this month can, I believe be clearly laid at the feet of this years reduced bonus situation. Normally the Summer bonus is used by families to pay for the Obon Holiday travel and for various summer purchases such as clothing and entertainment.
Prices are down across the board as belt tightening continues across the country.
I recently returned from a shopping excursion to a local electronics shop where we got almost zero help despite spending a boatload of cash. Stock levels appeared fine, but the staff levels, or at least staff who were interested in selling something were non-existent. We waited over 30 minutes for a salesperson to input our order into the "system". Very inefficient and no information was given about "eco-points" which is a very hot topic around these parts.
more later
This is not surprising and the big downturn this month can, I believe be clearly laid at the feet of this years reduced bonus situation. Normally the Summer bonus is used by families to pay for the Obon Holiday travel and for various summer purchases such as clothing and entertainment.
Prices are down across the board as belt tightening continues across the country.
I recently returned from a shopping excursion to a local electronics shop where we got almost zero help despite spending a boatload of cash. Stock levels appeared fine, but the staff levels, or at least staff who were interested in selling something were non-existent. We waited over 30 minutes for a salesperson to input our order into the "system". Very inefficient and no information was given about "eco-points" which is a very hot topic around these parts.
more later
Wednesday, August 12, 2009
I learned today that the National Personnel Authority has suggested there be a cut in both monthly salaries and bonuses for national civil servants in fiscal 2009. It is the first time in six years such a reduction in both salaries and bonuses for civil servants has been suggested.
The proposal implements a cut of 154,000 yen from the current annual pay levels for civil servants. It would be the second-largest cut, following a reduction of 165,000 yen recommended in 2003. It proposed slashing civil servants’ monthly pay for the first time in four years, by as much as 0.2%, they said.
In another report I read it said that bonuses have been cut an average of 17%.
The proposal implements a cut of 154,000 yen from the current annual pay levels for civil servants. It would be the second-largest cut, following a reduction of 165,000 yen recommended in 2003. It proposed slashing civil servants’ monthly pay for the first time in four years, by as much as 0.2%, they said.
In another report I read it said that bonuses have been cut an average of 17%.
Tuesday, August 11, 2009
Comments on Japan summer 2009
Hello and thanks for finding my posting.
Well its August 12th and its been about 48 hours from the 6.6 quake that occurred in the subduction zone deep in the trench under Suruga Bay. It really rocked where we live but that is primarily because our house is 35 years old and build of wood. Its designed to go with the flow, and go it did. There are some issues with housing construction methods here that I think should be commented on. Basically the construction industry uses lousy quality materials and houses are in fact not designed to outlast the mortgages that are taken out for the property they sit upon. Little to no insulation is used, plywood of marginal thickness is used in the framing process and frame anchoring is frighteningly under engineered. At least in my opinion when you consider the costs of construction, the taxes involved and the weather in the region it makes no sense to use such poor materials. Not to mention the excessive amount of waste generated from tearing down and rebuilding houses every decade or two.
Lucky for us the tectonic movement was quite brief, had it continued I am pretty sure our house would have been a pile of twigs. While the building was shaking I was reminded how much money I had forked out over the past 5 years in fully insuring the current house. Our Neighbors in fact didn't even get up and it appears they either slept through it or didn't bother to take any action afterwards... In many ways it reminded me of life in Northern California.
Another twist on the earthquake story was that we signed the closing papers on the condo we have been purchasing. As such we are very much clued into the associated costs involved in purchasing property in present day Japan.
Right now the government has a "green points" shopping policy in affect. Folks who buy energy efficient durable goods are given frequent flyer points good for extra gifts. Not sure of the actual payback as I have yet to visit the big electronic shops, but when I know the specifics I will post them here. We are looking at buying a Refrigerator, a washing machine, a rice cooker as well as new flat screen TV. My guess is the rice cooker will be a "free" toss in.
Generally shops in Japan do not have extensive space for stocking extra items and I frequently find that the item I want, say a room fan, is either out of stock or "not available" right now. If I place an order the item usually arrives in a day or two and is delivered to my house gratis. Our most recent fan purchase cost us about 3000 yen and got us a nice mini fan with decent air movement. Hey its a fan thats what its supposed to do right ? We were offered no help in choosing our item yet the store was full of employees busy doing things such as standing at the cash register, trying to look busy, thanking us for shopping or writing information on papers. Then again if you are unfamiliar with the concept of Japanese business methods you would be surprised, when in fact this is fairly SOP. The idea is to create jobs and damn the efficiency or "profitability" of said business decisions.
I think it safe to conclude that the average japanese concept of ROI is lower than the western mindset.
specific prices to be quoted on this blog shortly.
on to the supermarkets which are a good test of the state of business. Stock levels are fairly good and I find just everything I want in quantities I need. Although the recent poor weather has resulted in terrible vegetable quality and crazy prices. A head of lettuce is 250 yen. An apple 100 yen. 3 carrots 150 yen. Fish as usual is the best bang for the buck and you can see that the fresh fish area of the store is not only well stocked but has a constant turnover in product. We recently bought some horse mackerel for only 88 yen each. Great taste and very fresh. I am paying about 200 yen for a 100gram pack of ground chicken, 88 yen for a bottle of unflavored seltzer water, 108 yen for a container of yogurt and 200 yen for a package of sliced cheese with perhaps 10 slices in it. Prices are high no doubt about that, but it is an island nation of 125 million people whose eating habits are fast copying those in North America. You want meat ? you pay for it. Fish however are plentiful and cheap.
A short word on the bonus situation here in Japan. Salaried workers get 2 bonuses a year and appears to be automatic and not based upon profits to a significant degree. Each bonus is roughly equivalent to a months pay. Recently however bonuses are down about 20% and families who rely on this "extra" revenue are starting to have to cut back.
more later
Well its August 12th and its been about 48 hours from the 6.6 quake that occurred in the subduction zone deep in the trench under Suruga Bay. It really rocked where we live but that is primarily because our house is 35 years old and build of wood. Its designed to go with the flow, and go it did. There are some issues with housing construction methods here that I think should be commented on. Basically the construction industry uses lousy quality materials and houses are in fact not designed to outlast the mortgages that are taken out for the property they sit upon. Little to no insulation is used, plywood of marginal thickness is used in the framing process and frame anchoring is frighteningly under engineered. At least in my opinion when you consider the costs of construction, the taxes involved and the weather in the region it makes no sense to use such poor materials. Not to mention the excessive amount of waste generated from tearing down and rebuilding houses every decade or two.
Lucky for us the tectonic movement was quite brief, had it continued I am pretty sure our house would have been a pile of twigs. While the building was shaking I was reminded how much money I had forked out over the past 5 years in fully insuring the current house. Our Neighbors in fact didn't even get up and it appears they either slept through it or didn't bother to take any action afterwards... In many ways it reminded me of life in Northern California.
Another twist on the earthquake story was that we signed the closing papers on the condo we have been purchasing. As such we are very much clued into the associated costs involved in purchasing property in present day Japan.
Right now the government has a "green points" shopping policy in affect. Folks who buy energy efficient durable goods are given frequent flyer points good for extra gifts. Not sure of the actual payback as I have yet to visit the big electronic shops, but when I know the specifics I will post them here. We are looking at buying a Refrigerator, a washing machine, a rice cooker as well as new flat screen TV. My guess is the rice cooker will be a "free" toss in.
Generally shops in Japan do not have extensive space for stocking extra items and I frequently find that the item I want, say a room fan, is either out of stock or "not available" right now. If I place an order the item usually arrives in a day or two and is delivered to my house gratis. Our most recent fan purchase cost us about 3000 yen and got us a nice mini fan with decent air movement. Hey its a fan thats what its supposed to do right ? We were offered no help in choosing our item yet the store was full of employees busy doing things such as standing at the cash register, trying to look busy, thanking us for shopping or writing information on papers. Then again if you are unfamiliar with the concept of Japanese business methods you would be surprised, when in fact this is fairly SOP. The idea is to create jobs and damn the efficiency or "profitability" of said business decisions.
I think it safe to conclude that the average japanese concept of ROI is lower than the western mindset.
specific prices to be quoted on this blog shortly.
on to the supermarkets which are a good test of the state of business. Stock levels are fairly good and I find just everything I want in quantities I need. Although the recent poor weather has resulted in terrible vegetable quality and crazy prices. A head of lettuce is 250 yen. An apple 100 yen. 3 carrots 150 yen. Fish as usual is the best bang for the buck and you can see that the fresh fish area of the store is not only well stocked but has a constant turnover in product. We recently bought some horse mackerel for only 88 yen each. Great taste and very fresh. I am paying about 200 yen for a 100gram pack of ground chicken, 88 yen for a bottle of unflavored seltzer water, 108 yen for a container of yogurt and 200 yen for a package of sliced cheese with perhaps 10 slices in it. Prices are high no doubt about that, but it is an island nation of 125 million people whose eating habits are fast copying those in North America. You want meat ? you pay for it. Fish however are plentiful and cheap.
A short word on the bonus situation here in Japan. Salaried workers get 2 bonuses a year and appears to be automatic and not based upon profits to a significant degree. Each bonus is roughly equivalent to a months pay. Recently however bonuses are down about 20% and families who rely on this "extra" revenue are starting to have to cut back.
more later
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