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Thu, Dec 26, 2002 - Page 12 News List

Retailers suffer as Japan stops buying

BLOOMBERG , TOKYO

Sachiko Tanaka is joining the throngs filling Ginza's most glitzy department stores as she does every December. This year, though, the construction-company clerk is out to ogle, not to buy.

"My bonus was halved this year," said the 32-year-old, gazing at a jewelry display at Mitsukoshi Ltd's showcase store in central Tokyo. "I don't have an extra yen to spend just because it's the holiday season. I'm even worried about keeping my job." It's a good thing Japan's retailers aren't as dependent on a year-end bounce from the holiday season as counterparts in the US and Europe. Even so, Tanaka and many like her in Japan are increasingly reluctant to open their pocketbooks and purses as they fret about job and wage security, holding back a recovery in the world's second-biggest economy.

"The outlook on consumer spending is pretty grim," said Yasukazu Shimizu, an economist at Aozora Bank Ltd. "Without a rebound in consumer spending, it's not easy to hope for a sustained recovery in the economy either."

Spending by consumers amounts to about 55 percent of Japan's economy. Even with few Japanese celebrating Christmas, December is usually the busiest month of the year for retailers as shoppers shell out for oseibo, or year-end gifts, for friends and business contacts.

December sales typically account for about 11 percent of retailers' annual total, says Takashi Yanahira, a retail analyst at ING Securities Japan Ltd. That compares with about 30 percent or more in other rich economies.

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