TOKYO, Japan: In March, as demand revived, Japan's retail sales rose 5.2 percent year-on-year, the highest level in five months as consumer demand recovered after falling sharply amid pandemic shutdowns and disruptions.
After climbing 6.4 percent in October, retail sales in Japan showed its first positive growth in four months, beating expectations of a 4.7-per-cent rise driven by higher consumer spending on clothing and accessories, as well as general merchandise.
"People felt relaxed, as it becomes spring," said Takeshi Minami, chief economist at Norinchukin Research Institute, as quoted by Reuters.
Compared with February, retail sales saw a 1.2 percent increase on a seasonally adjusted basis.
Data released by the Japanese government reported department store sales climbed 19.3 percent in March. In contrast, supermarket sales fell for the second straight month to reach 2.1 percent.
Last year, retail sales tumbled sharply after the COVID-19 pandemic forced shops, including department stores, to close, causing demand for household appliances, clothing, and other items to fall.
Meanwhile, retail spending only recovered to pre-pandemic levels in the fourth quarter of 2020, as a recovery in exports helped Japan to emerge from a pandemic-induced slump.
While spending eased further in the first quarter of 2021, analysts warned that the slow pace of vaccinations and a resurgence in infections could weigh on household spending in the near term.
Last week, Japan declared a third state of emergency for Tokyo and three other prefectures and imposed new restrictions, including department store closures, to contain the spread of COVID-19.
This has raised concerns over how the move would affect consumer spending on services, such as restaurants and leisure activities.
"Services spending accounts for about half of consumption. If it won't be going on an uptrend, overall consumption will stagnate," said Minami.