Continued “High-Priced Goods Bubble” Supports Department Store Recovery

The recovery of the performance of department store companies is evident. The five major department store operators announced that their August same-store sales increased by 20-40% y/y. Although the seventh wave of COVID-19 infections has had an impact on the number of customers who visited their stores, the increase in sales per customer due to booming consumption of high-end goods is supporting the sales growth of all the companies.

The recovery is being driven by sales of high-end goods such as foreign luxury brands, watches, jewelry, and contemporary art. While middle-income consumers have been slow to recover, it is still the wealthy who are buying.

The driving force behind the consumption of expensive goods is the surplus generated by the restrictions on overseas travel and eating out due to the COVID-19 disaster. In many cases, the wealthy are buying watches and contemporary art for investment purposes.

However, it is unclear whether the high-cost consumption that has been the engine of the sales recovery will continue to gain momentum once the Covid-19 disaster settles down.

(source) https://toyokeizai.net/articles/-/618151?page=3