Retail sales in Japan increased by 0.3% year-on-year in July 2025, slowing sharply from a downwardly revised 1.9% growth in the previous month and falling well short of market expectations of a 1.8% rise. This marked the 40th consecutive increase but the softest pace since February 2022, when retail sales fell by 0.9%. Sales increased for clothing and personal goods (8.0%), pharmaceuticals and cosmetics (3.9%), other retail sales (2.6%), and food and beverages (1.5%). Conversely, sales declined for department stores (-5.8%), fuel (-4.9%), non-store retailers (-4.0%), automobiles (-2.6%), and machinery and equipment (-0.4%). On a monthly basis, retail sales dropped by 1.6% in July, reversing a downwardly revised 0.9% rise in June and marking the steepest monthly decline since August 2021.