Spending at Japan's shops rises in Oct as economy reopens, outlook murky

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TOKYO, Nov 25 (Reuters) – Sales at Japan’s supermarket and department stores rose in October as the end to coronavirus curbs lifted consumption, industry data showed on Thursday, but the modest rebound suggested a full recovery will take time.

Sales at Japanese department stores rose 2.9% in October from a year earlier thanks to robust demand for jewellery and women’s clothing, according to data from the Japan Department Stores Association.

Those at chain stores, which include supermarkets such as Aeon and furniture stores such as Nitori Holdings , grew 3.7% in October from a year earlier, data from the Japan Chain Stores Association showed.

While the data points to a pick-up in spending, it casts doubt on how quickly the world’s third largest economy can bounce back from the pandemic doldrums in the fourth quarter, after state of emergency curbs were lifted on Sept. 30.

Analysts said a full-fledged recovery in sectors hard hit by the pandemic such as services will likely take time.

“Consumption is coming back, but not as a V-shape recovery from the lows of the state of emergency,” said Yutaro Suzuki, economist at Daiwa Institute of Research. “The pace of recovery is gradual.”

A separate survey from the Japan Foodservice Association showed sales at pubs, fast food and family restaurants fell 0.5% in October from a year ago.

That was much better than a sharp 8.2% year-on-year drop in September, the data showed, suggesting conditions largely stabilised in October.

“Restrictions had been lifted further by November so (spending) is likely to improve,” said Taro Saito, executive research fellow at NLI Research Institute.

Consumers were likely becoming less hesitant to go out after Japan saw a sharp decline in COVID-19 cases, Saito said.

The data comes as Japan’s government raised its view on consumption for the first time in 13 months earlier on stronger service spending.

(Reporting by Daniel Leussink and Kantaro Komiya; Editing by Ana Nicolaci da Costa)