Japan Retailers Report Robust Post-Quake Sales

What Quake: The post-quake slump feared by Japan's retailers never materialized.

Retail sales rebounded strongly during the first half of fiscal 2011 which covers April through September, fueling record profits for major retail chains.

“There was a temporary trend of consumers refraining from going shopping after the March 11 disaster, but the underlying consumption power proved to be solid,” said Noritoshi Murata, president of Seven & i Holdings Co., Japan’s leading retailer.

Seven & i Holdings Co. posted record 150.1 billion yen ($1.96 billion) of consolidated operating profits in the August interim fiscal 2011 period, a 25.9 percent jump over a year ago, setting its first new record since 2008. The company’s major subsidiaries, including Seven-Eleven Japan Co., Japan’s top convenience store chain in Japan, posted rising operating profits.

Retailers have been revising earnings forecasts upward after it became apparent that the March 11 disasters wasn’t having the anticipated impact. A rising demand in daily necessities from women and the elderly have boosted sales of boxed lunches and prepared foods.

Even the nationwide power shortage helped boost the bottom line by forcing energy conservation efforts.

Seven’s supermarket chain subsidiary York Benimaru, based in the quake-stricken Tohoku region, reported an operating profit of 9.6 billion yen ($130 mil.), about 10 times the initial forecast of 1 billion yen ($13.5 mil.)

Seven & i Holdings has revised fiscal 2011 earnings forecasts upward to 286 billion yen ($3.7 bil.), a 17.5 percent jump over a year ago. That is only slightly shy of the company’s full-year record profits of 286.8 billion yen set in 2007.

Other convenience store chains FamilyMart and Circle K Sunkus have also revised their earnings estimates upward. The introduction of tobacco taxes last fall failed to drive down sales as much as expected, adding to the better-than-expected results.

The leading department store chain Daimaru Matsuzakaya also revised operating profits forecasts for fiscal 2011 upward by 1.8 billion yen ($24 mil.) in September thanks to much quicker recovery than expected from the March 11 disasters. Strong sales of casual light summer clothing for the national energy-conservation campaign also contributed to its strong sales.