One way to revive Japan: 70 percent off at big Tokyo store
A close-out sale this month at a famous store creates a consumerfrenzy.
"It's like a sardine can in here," laughs Matsue Owada, looking around at the jostling crowds inside Tokyu Department store in central Tokyo. Mrs. Owada traveled an hour just to be at Tokyu's closing sale and has four fat shopping bags to show for her efforts. "I just realized that I hadn't shopped in a long time - I feel good," she says. "I spent a lot."
Japan's leaders have been wanting to hear those magic words for more than a year now, hoping that a boost in consumer spending could get the sluggish economy moving.
They've cajoled and offered incentives to get people to spend, to no avail.
Buffeted by recession and unsure of the future, the risk-averse Japanese prefer to save these days.
Now it's clear there's one thing the government should have tried: lowering prices. The owners of Tokyu Department store - Japan's Macy's - slashed prices as much as 70 percent at the central Tokyo branch and are seeing the biggest crowds of its 36-year history.
On the morning of Jan. 2, when the sale started, some 100,000 people waited in the cold for the doors to open. They bought $6.5 million worth of goods once they got inside, an all-time record for the branch.
The sale ends Jan. 31, when the doors close forever, and shoppers are still going strong. Tokyu's ground floor looks less like a sale than a rock concert or rugby scrum. Businessmen and housewives elbow each other for a look at the $30 shoes and the $50 pea coats, while salesman raucously shout the virtues of Italian handbags and moisture-proof umbrellas.
To handle the added business, Tokyu has set up extra cash registers. But even with 15 young women ringing up purchases side by side, there are still at least 10 people in each line, bundles of merchandise tucked untidily under their arms.
Tokyu wouldn't be having the sale if any of these shoppers had shown up more regularly over the past few years. The branch is closing because of dwindling sales. This echoes the national trend all retailers have seen: Department store sales in 1998 fell 5 percent from the year before.
The central Tokyu branch is in a business and banking district and was hit particularly hard by a drop in menswear purchases, says spokesman Hisao Miyamoto. But since the sale began, men have been streaming in to buy cashmere coats and suits, accounting for 20 percent of all sales.
"I'm not laid off or anything," says one businessman who is here with his wife and daughter and won't give his name, "but these days our family has been very careful about spending money in general."
He has spent over $500 in the last two hours and he's sure his wife and daughter have spent more. "I bought shoes, bags, and clothes for myself, extra clothes for next winter too," he says. Surveying the frenzy around him, the businessman sees it as a sign of how Japan has changed since the free-spending days of the late 1980s economic 'bubble.' "People want more inexpensive things these days, they're more selective," he says.
"That's good, but it's a hard lesson for a department store like Tokyu," he adds.