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Heat waves trigger unusual consumer trends in Japan
Publication Date : 26-08-2013
The heat wave-filled summer has brought good news for some industries, but bad news for others.
Even in August, air conditioners have continued to sell well at home appliance outlets. Sales of fried foods at supermarkets have been higher than average.
On the other hand, golf course operators have received a flurry of cancellations from their senior customers apparently due to the soaring temperatures.
Each industry thus has been facing unusual consumer trends this summer.
Air conditioner sales usually peak in June and July. But this August, sales have remained strong at major home appliance retailers and general merchandise stores.
Bic Camera Inc., a leading major home appliance retailer, said air conditioner sales from August 1 to 18 were up by about 50 per cent compared to the same period last year. Meanwhile, sales of electric fans have doubled.
Aeon Co., Japan's largest retailer, also has seen brisk sales in the same department. Over a one-week period in mid-August, the sales of air conditioners and electric fans both doubled compared to a year earlier.
“The heat subsided once this summer, only for extreme heat to return in August and boost demand again,” an Aeon public relations official said.
At supermarkets, it has become clear that cold drinks and ice cream are not the only hot weather treats on blistering summer days.
According to the Japan Chain Store Association, whose members include major supermarket chains, sales of delicatessen items increased by 2.9 per cent in July, compared to the same month last year, due to brisk sales of ready-to-serve fried foods nationwide.
“Consumers tend to avoid cooking [fried foods] at home because of the summer heat,” an association official said.
Among convenience store chains, which have been trying to sell more prepared food items, FamilyMart Co. said it had seen sales of fried foods, such as fried chicken, go up by 10 per cent in August, compared to the same period last year.
Tough season for business
Golf courses generally tend to lose some customers during summer, but this year they are being hit harder than ever as players cannot take the scorching heat.
Even in mid-August, there was no sign of the heat wave easing, with the mercury soaring early in the morning on some days.
A golf course in the northern Kanto region said on days like these it received cancellations from elderly players one after another and ended up having to ask other groups of golfers to start playing earlier than scheduled.
According to the Satsuki golf course in Sano, Tochigi Prefecture, its customers in July and August declined about 10 per cent from the previous year.
Facing the same problem, Pacific Golf Management K.K., a major golf course operator, has come up with plans to lure players back to the greens, for example by offering early-morning and night golfing.
The hot weather has also hit the growth of vegetables, raising the price of leafy greens, in particular lettuce.
Between mid- and late July, the average prices of lettuce and cabbage doubled from those in the same period last year in the Tokyo market.
Unlike major supermarket chains, which can maintain low prices by buying directly from contract farmers, smaller supermarkets and independent stores have a harder time trying to attract and retain customers as prices rise.
200 billion yen in extra spending
However, overall, this summer’s heat wave is expected to have a positive effect on the economy.
According to an estimation by Mitsubishi UFJ Morgan Stanley Securities Co.’s business cycle research body, when the average temperature rises 1 C in July and August, consumer spending surges by 131.3 billion yen (US$1.33 billion).
This year, the average temperature by mid-August was 1.7 C higher than normal. Based on the above research, consumer spending is estimated to increase by more than 200 billion yen, which would boost the July-to-September quarter’s real gross domestic product by about 0.2 per cent.
However, the prolonged hot weather may also negatively impact consumer spending, for example leading to sluggish sales of autumn clothing.
Yasuo Yamamoto, a senior economist at Mizuho Research Institute Ltd., said: “Department stores have already started selling autumn items, so the hot weather in August and later could have a negative influence on sales. This year has also had plenty of heavy rain so if this discourages consumers from going out, consumer spending could be sluggish.”
US$1 = 98.68 yen