Takuya Okamoto, the founder and honorary chairman of Aeon, the thriving retailer that is bucking the trend of struggling supermarkets in Japan, has called for increased liberalisation of the sector.
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Okamoto says the restrictive regulations on store openings and outlet size, as well as prohibitive licensing laws governing the sale of alcohol and medication, have held back the retail sector and prevented consumers getting the services and goods they require. This is holding back consumer spending and thereby negatively impacting the entire Japanese economy, Okamoto believes.
For a developed country, the Japanese retail sector features an unusually large number of very small outlets. The trend is in reverse, and the overall number of stores has already fallen from 1.7 million in the 1980s to about 1.4 million, but change is coming slowly.
Accelerated deregulation is imperative if consumer spending is to be encouraged, says Okamoto, and analysts agree. Goldman Sachs analyst Yukihiro Moroe told Reuters that full-fledged deregulation would mean less dusty-shelved, closet-sized shops and more brightly lit, price-competitive supermarkets like Aeon.
Since Japanese have nearly ¥1,400 trillion (US$10,630bn) in private savings, the opportunity is huge. Retailers and government need to work together to encourage them to spend it, says Okamoto.
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