Commentary Directory

Japan Retail Sales: August 2023

Jacob Hess
September 28, 2023

Japan Retail Sales

9/28/2023 (August 2023)

+0.1% MoM (+7.0% YoY)


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Commercial Sales +0.5% MoM (+1.7% YoY)
Wholesale Sales 0.9% MoM (-0.3% YoY)

Japanese retail sales grew just 0.1% MoM and 7.0% YoY in August. Wholesale sales were up 0.9% MoM but still down -0.3% MoM. As a result, total commercial sales grew 0.5% MoM and were up 1.7% YoY. The 7.0% YoY increase in retail sales is (tied) for the 2nd highest this year with July. The highest was 7.3% YoY in February. Large-scale wholesale sales continue to trend weak, down -4.7% YoY, a sharper fall from the -3.1% YoY in July. This continues the weakness seen in Q2 2023 where sales were down -2.5% over Q2 2022.

Sales growth was slow in August after a strong showing in July. On an annual basis, the value of sales is up by a lot, but this is likely because of the recent rise in inflation. Wholesale sales, on the other hand, have struggled to grow in the last 12 months which suggests that there is some softness further up the supply chain as a result of a build in inventories. Will that weakness flow forward to retail? Probably in Q4 2023 and Q1 2024. Momentum is falling out of Japanese growth, and higher inflation will eventually get to the consumer.