Japan’s retailers take hit from Olympics’ overseas spectator ban
The industry invested heavily in the buildup to the Olympics, expecting a sales boost.
Japan has banned overseas spectators from attending this summer’s Tokyo Olympics that are scheduled to begin on 23 July 2021, which will keep the country from meeting its retail growth target of 2.9% in 2021, according to a report from GlobalData.
The Tokyo Olympic and Paralympic Games could have been a perfect opportunity for the country’s retail industry to bounce back to the growth phase after facing a slowdown in 2020 due to the pandemic, said GlobalData’s retail analyst Ankita Roy.
“With more than 205 participating nations, the games provide a platform for the brands and retailers to get noticed by a larger audience. However, without international visitors, the recovery chance of the retail industry will definitely be affected,” Roy said.
Japan saw a decline in the new COVID-19 case numbers from a peak of more than 12,000 cases on 30 April to just under 2,000 cases on 2 July. However, sluggish vaccine rollout in Japan remains an area of concern with only 8% of the total population getting vaccinated.
In addition, the present situation will affect the new employment that usually comes along with similar events, the report noted. Low hiring activities in 2021 will also influence retail spending in the country, reflecting in the subdued retail sales due to financial uncertainties and the pandemic’s impact on household income.
Japan’s retail industry has invested heavily in the build-up to the Tokyo Olympics, similar to other industries such as tourism & hospitality, as several retailers expected a sales boost, Roy said, noting that several new concepts were trialled keeping safety and hygiene in mind.
“However, without overseas visitors, minimal returns on expenditure will be seen, which will, in turn, push the retail industry in Japan to further lows,” Roy added.