By Aki Ito
April 27 (Bloomberg) -- Japan’s retail sales tumbled the most in 13 years last month as the nation’s record earthquake shut stores and discouraged households from spending money.
Sales slumped 8.5 percent in March from a year earlier, the biggest decline since March 1998, according to a statement by trade ministry in Tokyo today. The median estimate of 14 economists surveyed by Bloomberg News was for a 6.1 percent drop.
Japanese retailers Aeon Co. and Seven & I Holdings Co. say full-year profit may decline after store shelves were left empty because of supply disruptions caused by the March 11 quake. The world’s third-largest economy will contract the most since the financial crisis this quarter, analysts said in a Bloomberg survey this month.
“There is concern that lower confidence could lead to a downward spiral of lower consumer spending, weaker economic activity, and declining pay and employment,” David Rea, a Japan economist at Capital Economics Ltd. in London, said before the report. “As the second quarter unfolds we expect a further deterioration in activity and consumer spending.”
The yen traded at 81.52 per dollar as of 9:34 a.m. in Tokyo, compared with 81.55 yen in New York yesterday. The Nikkei 225 Stock Average rose 1.2 percent to 9,675.35.
First Official Figures
Today’s report provides the first official retail-sales figures to reflect the impact of the quake last month.
Confidence among both merchants and households fell the most on record last month, a sign consumers may continue to cut back in the months ahead.
Meantime, Toyota Motor Corp. led a record drop in auto sales in March and domestic output plunged 63 percent after disruptions in its supply chains and factory closures. Production will return to normal by December, the automaker said.
Prime Minister Naoto Kan unveiled a 4-trillion yen ($49 billion) extra budget last week to rebuild the northeast area that was devastated by the earthquake and tsunami. The spending aims to provide more than 100,000 temporary homes and clean up debris from the disaster.
The magnitude-9 quake and ensuing tsunami crippled the Fukushima Dai-Ichi nuclear plant operated by Tokyo Electric Power Co. , causing radiation leaks and power shortages in eastern Japan. The disaster left more than 26,000 people dead or missing, according to the National Police Agency.
Shares in Seven & I Holdings Co. have fallen 11 percent since March 10. The owner of the 7-Eleven convenience-store brand said this month full-year profit may decline 22 percent.
Aeon Co., which may surpass Seven & I to be the country’s biggest retailer in terms of revenue this fiscal year, has decreased 5 percent in the same period. It said net income may decline 33 percent.
The Nikkei 225 Stock Average fell 7.4 percent since the quake.
Canon Inc. , the world’s largest maker of cameras, cut its profit forecast yesterday because of production interruptions, saying its net income this year will probably fall 11 percent.
To contact the reporter on this story: Aki Ito in Tokyo at aito16@bloomberg.net
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
Last Updated: April 26, 2011 20:54 EDT