Though still in negative territory, Japanese retail sales have been on an upward trend since October 2016. Yet the upside-down demographic and a rapidly aging population do not bode well for consumer spending growth.
Japan’s retail sector profits were down from 6% in 2013 to 5% in 2016 while net gearing has risen by +10pp to 75% over the same period.
Convenience stores and online pure players are the least sensitive subsectors. General retail and home & office suffer from an unattractive positioning.