Tokyo, Jan. 16 (Bloomberg) -- Department store sales in Tokyo rose in December, one brightpoint in an otherwise tough year for retailers. Spending at Takashimaya Co. and Mitsukoshi Ltd., the top two, and other department stores,rose 0.5 percent from a year earlier to 257.7 billion yen ($2.2 billion), the Japan DepartmentStore Association said. Sales declined 0.9 percent last year, following a 2.3 percent fall in 1999, the fourth straightannual decline. The long slide in sales has taken its toll on department stores, which haveseen shoppers migrate to discount and specialty shops. Sogo Co. filed for bankruptcy in July, and has since closed about half its 21 stores, includingits flagship Tokyo outlet. The same month, Mitsukoshi closed one of its stores in Shinjuku,one of Tokyo's biggest shopping districts. ``We can't expect to see any acceleration in spending,'' said Tomoko Fujii, an economist atNikko Salomon Smith Barney Ltd. ``Department stores will continue to have a tough time.'' December is the busiest month of the year for retailers, as people buy new-year gifts. Lastmonth marked the first time in four years that December sales have risen. December sales fellthe past three years after peaking at 298.7 billion yen in 1996. Shoppers last month spent more on accessories, bags and shoes, jewellery and furniture, asthe mild winter weather lured people from indoors to shops and malls.
Tougher Competition
Department stores are trying to fend off competition from new discount stores, such as FastRetailing Co.'s Uniqlo outlets, whose cheap mix-and-match clothes have won over youngJapanese shoppers. ``We are seeing a shift from department stores to discount stores,'' said Kazuhiko Ogata,economist at HSBC Securities Japan Ltd. ``People are still into saving.'' To combat that, department stores are turning to discounting stock and other promotions,such as sales tied to sporting teams, to keep shoppers coming through their doors. Take Takashimaya, which is trying to stem a two-year decline in sales by luring shoppers withpromotional campaigns. Last month, Japan's biggest department store offered shoppers whospent 50,000 yen a chance to win up to that much back in gift vouchers, and other prizes. Takashimaya expects sales to fall 2.7 percent in the fiscal year through February, to 1.16trillion yen.