Chronic deflation and economic stagnation have plagued the Japanese economy for the better part of 20 years, creating a difficult business environment for home and garden retailers. Sales have been sluggish and the market outlook is far from rosy, with growth predicted to come to a standstill over the next five years. This report examines the factors contributing to the unfavourable macroeconomic environment in Japan, and its impact on consumer spending on home and garden.
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Chronic deflation and economic stagnation have plagued the economy for the better part of the last two decades, and retailers in Japan have been struggling against weak consumption despite the best efforts of the central bank. Even with the effect of significant fiscal stimulus packages, low wage growth is constraining the spending power of consumers, even as saving for the future and future uncertainty dampen consumer confidence.
Over the last five years, value sales in home and garden have been sluggish in Japan, recording a 2012-2017 CAGR of less than 1%. The outlook is far from rosy, with growth predicted to come to a standstill over the next five years. This makes the business environment particularly difficult for home and garden players, as consumers cut their spending on discretionary purchases, including home furnishings.