Development Bank of Japan
Research Report
No. 14

Consumption Demand Trends and the Structure of
Supply:Focus on Retail Industry Supply Behavior

March 2001

Economic and Industrial Research Department
Development Bank of Japan

Contents
Summary ............................................................................................................................. iii
I. Long-term Trend in Consumption as Viewed from Demand and Supply .................... 1
1. Relationship between Personal and Non-Household Consumption and Retail Store
Sales................................................................................................................................................ 1
2. Demand in Industries other than the Retail Industry According to SNA Statistics .......... 5
II. Excess capacity problems in non-manufacturing industries .......................................7
1. The divergence from demand projections based on questionnaire surveys concerningbusiness behavior and the sense of excess capacity ................................................................ 7
2. Comparison of Real Capital Spending with Demand Forecasts or Capital Spending
Corresponding to Actual Demand ..........................................................................................13
III. Retail Industry Supply Behavior and Issues under Deregulation ............................ 19
1. The Effect of Deregulation of the Large-Scale Retail Store Law .......................................19
2. Relationship of the Number of Stores and Sales Volume, by Business.............................21
3. Trends in the Number of Large-Scale Retail Stores (Department Stores andSupermarkets) and Real Sales Volume....................................................................................23
4. Case study: An Examination of the New Store Effect and Store Efficiency inSupermarkets...............................................................................................................................26
Supplement: Information Technology Investment in the Retail Industry and the Status
of Internet Sales .......................................................................................... 37– Results of the Development Bank of Japan’s Survey on Planned
Capital Spending Supplement Survey (August 2000) –References........................................................................................................................... 43

Development Bank of Japan Research Report/No.14

iConsumption Demand Trends and the Structure of Supply:
Focus on Retail Industry Supply Behavior

Summary
1. From a macro perspective, overall consumption demand in Japan stagnated in the 1990s. One
distinct supply-side characteristic was the aggressive opening of new stores by the retail industry
following the deregulation of the Large-Scale Retail Store Law [enacted March 1, 1974, abolishedMay 31, 2000 and followed by the implementation of the Large-Scale Retail Store Location Law
enacted on June 1, 2000]. The result was a sharp increase in retail industry competition for agreater share of a limited pie.
This report looks at the current conditions and issues concerning the structure of supply inJapan’s retail industry. By connecting these to the long-term structural changes in consumption
demand looked at from a macro perspective, the report seeks to improve understanding of retailindustry supply behavior in the 1990s and search for hints to future retail industry capitalspending.
2. An examination of the long-term demand trend for personal consumption (SNA statistics) bycomparing it to the supply side (“Current Survey of Commerce” statistics) shows the percentage
share of retail industry sales accounted for by personal consumption (excluding homeowners’
imputed rents) has tended to decline (73.9% in Fiscal 1973 55.3% in Fiscal 1998.). Demand inindustries other than the retail industry has continued past trends, and during the second half ofthe first decade of the 21 century will reach the level of retail industry sales in the 1990s (average¥143 trillion annually). Retail industry sales correspond to the movement of the goods
consumption included in personal consumption (particularly food and clothing), both of whichhave been stagnant since the beginning of the 1990s. But demand in industries other than retailindustry corresponds to changes in the service consumption that is included in personal
consumption, and despite its relative sluggishness compared to the average annual growth in the
1980s (6.8%) has expanded gradually at an average annual rate of about 3%, even throughout the
1990s. The category of service consumption with the highest percentage share of all personal
consumption during the period from Fiscal 1970 through Fiscal 1998 was “health”, followed by“other (travel, restaurants, etc.), “education”, “transport and communication” and “recreationand culture”.
On the other hand, consumption other than household consumption, which corresponds tothe bulk of intermediate consumption by corporations, began to decrease following the collapseof Japan’s bubble economy. Compared to their peak in 1991, social expenses in particular had
been cut by 25% by 1998, and this trend towards decreasing expenditure is continuing. Retailindustry supply trends during the 1990s must be understood in the context of this stagnant
goods consumption and declining non-household consumption (including social expenses)
demand.

Development Bank of Japan Research Report/No.14 iii

3. When we compare the outlooks for medium-term business demand that were assumed in the
1990s after the bubble period based on questionnaire surveys concerning business behavior toactual demand, the actual results on a total industry basis have been consistently below theforecast levels since 1993. This divergence between demand outlook and actual demand can beseen in both manufacturing and non-manufacturing industries. We can verify a high correlation
between the degree of divergence and a sense of excess capacity. Despite the fact the retailindustry among non-manufacturing industries assumed an industry demand outlook in the 1990s
that was lower than the projected economic growth rate, the degree of divergence was nearly thesame as that for 12 manufacturing industries that made the same assumption. Moreover thecorrelation with a sense of excess capacity is high. Personal services industries are identical totwo manufacturing industries on the point that the industry demand outlooks they assumed in
the 1990s were higher than projected economic growth rates. The degree of divergence iscompletely different, however, and forms a pattern similar to that of the retail industry. The total
degree of divergence for the retail industry plus services for individuals was 18.5% as of 1998,
substantially higher than the percentage for all industries (4.6%), and a situation where demand inline with expected growth has not been realized has continued to the present.
4. We assumed that supply side investment behavior is carried out based on the future demand
outlook. We then compared real capital spending from the bubble period through the 1990s to
the capital spending, calculated using the capital coefficient trend before the bubble period andthe expected growth rate based on questionnaires concerning business behavior. We also
compared this real capital spending to the capital spending that corresponds to realized growth ineach five-year period for every year from 1985 through 1993, to check whether they wereconsistent.
During the period from 1985 to 1991 (1985~1989), real capital spending in the retail industry(personal services industries) changed nearly identically to the capital spending that corresponds
to expected growth rates. Since 1992 (1990), however, capital spending has been less than theinvestment that corresponds to expected growth. When compared to the capital spending that
corresponds to realized growth, however, the divergence between the two after 1988 grew larger
until the cumulative amount of the divergence for the period until 1993 was ¥13.4 trillion (¥7.8
trillion). This can be calculated as amounting to 36% (30%) of actual cumulative capital spendingof ¥37.4 trillion (¥25.8 trillion). The industry growth rate inferred from real capital spending
since 1992 (1990) has constantly been lower than the expected growth rate that is based onquestionnaires concerning business behavior. For the retail industry (personal services industries)
the growth rate has declined from 2.9% in 1992 (4.9% in 1990) to ▲1.1% in 1998 (▲0.0%).
5. The rate of increase in the retail industry capital coefficient, which is an indicator of capitalefficiency from a macro perspective, has been faster than the average rate of increase for
manufacturing industries and has been increasing even more rapidly since the beginning of the
1990s. In order to examine the efficiency of stores opened following deregulation in the 1990s,
we selected supermarkets as one example of a business with a remarkable number of new store
openings. For 48 companies for which individual stores can be randomly chosen from securities
information resources, we selected 1,925 stores that were open as of March 1999 from among
2,242 stores newly opened since the 1980s to create panel data (time-series tracking data). We
divided this into two groups, for general super markets and specialty (food products)
supermarkets according to business, and compared the changes in sales or store efficiency after
the store opened based on the difference between when the stores opened or whether the land
was owned when the store was built.
iv Development Bank of Japan Research Report/No.14

What can be verified at a minimum from this result is that despite some differences bybusiness or whether the land was owned when a store was built, for the most part stores werealike on the three points that the stores opened in the 1990s have not shown the post-store
opening revenue seen in stores opened in the 1980s, the period of time between when a store
opened and the point in time at which store efficiency (real sales per retail floor space) began to
decline grew shorter, and the stores that were opened in the first half of the 1990s had
particularly low tangible fixed asset turnover ratios.
Based on the above analysis, the environment in which the retail industry finds itself has
become more severe as evidenced in the long-term trend in consumption demand viewed from amacro perspective. During the 1990s, demand in line with the industry’s expected growth rate
was never achieved. Add the timing of deregulation, and the 1990s can be seen as a period when
it was difficult for the retail industry to rapidly adjust its supply behavior in ways consistent withrealized demand. Nevertheless, as actual demand remains stagnant, the performance winners andlosses are gradually becoming clearer, not only among companies with differences in company
size or business conditions but even among companies faced with the same business conditions.
In addition, up until now retail industry capital spending had the effect of causing a trend-likerise in the capital coefficient while lowering capital efficiency. Looking just at supermarkets that
aggressively built new stores, we can also note that the efficiency of stores newly opened in thewake of deregulation has not always been good. In this environment we expect that during Fiscal
2000 and Fiscal 2001 the magnitude of swings in investment will grow larger because of thestores built in the rush before enactment of the Large-Scale Retail Store Location Law and thecutbacks in reaction to them. The likelihood is quite high that the move to the new law will bringwith it short-sighted retail industry investment activity.
In the future it will be important to apply IT (information technology) as a tool to improve
the accuracy of consumption demand forecasts and the store sales multiplier effect. There will
also be an urgent need, however, to use the opportunity created by the enactment of the LargeScale Retail Store Location Law and its emphasis on regional and environmental protection toearnestly address the management issue of how to ensure the efficiency of new stores, when
greater consideration of a balance with urban planning or revitalization of central business
districts is demanded.

Development Bank of Japan Research Report/No.14 v

I. Long-term Trend in Consumption as Viewed from Demand and Supply
1.

Relationship between Personal and Non-Household Consumption and Retail StoreSales
In this chapter we take a general overview of the long-term demand trends for consumption bycomparing them to the supply side.
Figure 1-1 shows a long-term time series from Fiscal 1970 through Fiscal 1999 (SNA
statistics only until Fiscal 1998, however), using personal consumption (final consumption
expenditures by households excluding homeowners’ imputed rents) looked at according tonominal basis SNA statistics1 for the demand side, and retail industry sales volume taken fromthe “Current Survey of Commerce” published by Japan’s Ministry of Economy, Trade and Industry
for the supply side.
Since the beginning of the 1990s the growth in personal consumption in Japan has stagnated,showing no progress since reaching a peak of ¥250 trillion in Fiscal 1996 (¥248 trillion in Fiscal
1998). In contrast, after remaining nearly flat since the start of the 1990s, retail industry sales
volume declined for three consecutive years after reading a peak of ¥148 trillion in Fiscal 1996(¥135 trillion in Fiscal 1999). As seen in the graph, the divergence between these two amounts
has gradually widened, and the percentage share of personal consumption accounted for by retailindustry sales has declined from 73.9% in Fiscal 1973 to 55.3% in Fiscal 1998.
Stated another way, during this period of time non-retail industry demand, that is personal
consumption excluding retail industry sales, has tended to increase. Non-retail industry demand
regressed around the time trend from Fiscal 1970 until Fiscal 1998. When this data is simply
extrapolated, non-retail industry demand will reach the level of retail industry sales in the 1990s(average ¥143 trillion annually) sometime during the second half of the first decade of the 21st
century. In Section 2 we will infer the details non-retail industry demand from SNA statistics, but
before doing so we will first take a look at the consumption demand trend by comparing it withretail industry sales volume.
The “retail industry” in the industry classification is on the sale of “things”. Looked at fromthe demand side, however, retail industry sales volume includes business consumption (sales ofgifts, etc.) that is treated as intermediate demand or sales of items such as automobiles forbusiness use that are treated as capital spending. It is therefore necessary to look at the data by
dividing the consumption demand associated with retail industry sales volume into final demandfor “things” and intermediate demand.
To look at the connection with final demand for “things”, in Figure 1-2 we compared retailindustry sales volume to goods consumption (the total of durable goods, semi-durable goods andnon-durable goods). The data for goods consumption are from the SNA statistics for personal
consumption, which is thought to correspond roughly to retail industry sales. The two items
moved nearly in parallel, and in the 1990s we can see that goods consumption tracked the
movement in retail industry sales volume and did not grow. Even when we extracted andexamined food and clothing consumption (the total for “foods, beverages and tobacco” and“clothing and footwear” in the category “final household consumption expenditures by purpose”
in the SNA statistics) from goods consumption, the same tendency appeared. We believe that asJapan entered the 1990s, the stagnation in final demand for goods has been influencing the retailindustry supply side.

1

Although the 93SNA Statistics were published on October 27, 2000, the SNA statistics we used in this report are based on the
68SNA Statistics because we had not obtained the long-term time series data before the 1990s at the time of writing.

Development Bank of Japan Research Report/No.14

1

Figure 1-1. Long-Term Change in Consumption as Viewed from Demand and Supply(Ye n trillio n s )300
Retail industry sales volume
Non-retail industry demand
Personal consumption (nominal)
250

200

150

100

50

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99(F is c a l y e a r)

Figure 1-2. Long-Term Change in Goods Consumption as Viewed from Demand andSupply(Yen trillions)

(%)

300

250

30
Retail industry sales volume
Consumption of durable, semi-durable and non-durable goods
Food and clothing
Percentage of non-household consumption (right-hand scale)

25

200

20

150

15

100

10

50

5

0

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98(Fiscal year)

2 Development Bank of Japan Research Report/No.14

Notes:

Sources:

Personal consumption (nominal) = Household final consumption expenditures – homeowners’ imputed rents
Non-retail industries demand = Personal consumption (nominal) – retail industry sales volume
The scope of the retail industry is the Japan Standard Industrial Classification Division I - Wholesale and Retail
Trade, Eating and Drinking Places excluding agents, intermediaries and eating and drinking places.
The retail industry sales volume for Fiscal 1970-1978 is adjusted using the three-year average ratio for the new
and former classifications in the survey for Fiscal 1979-1981, in order to be consistent with the industrial
classifications used since 1979. Note that “retail industry sales volume” looked at from the demand side includes
business consumption (intermediary consumption such as gifts, etc.) or capital spending as represented by salesof items such as automobiles for business use.
3. The statistics for non-retail industry demand for Fiscal 1999 and later are extrapolated using the following
equation.
(Fiscal 1970-1998 (N = 29))
Sa = 3.717 * t(142.27)
adj. R2 = 0.959
4. Percentage of non-household consumption = 100 – (durable + semi-durable + non-durable goods
consumption/retail industry sales volume * 100)
Ministry of Economy, Trade and Industry, “The Current Survey of Commerce”, and Cabinet Office, “The Annual Reporton National Accounts”

1.
2.

The divergence (note that capital spending corresponding to final demand is also included inthis divergent portion, however) between the retail industry sale volume and goods consumption
shown in Figure 1-2 provides a reference when examining the trend in intermediate consumption.
When we define the divergence between the two categories as non-household consumption, thepercentage moves within a range between 10-17%, closely tracking the business cycle, mostrecently since Fiscal 1997 when the percentage declined in Fiscal 1998 to about the 13% level asJapan entered a period of recession.
Next let us turn our attention in Figure 1-3 to non-household consumption, whichcorresponds to business consumption, as an indicator to comprehensively show the trend inintermediate demand that is thought to influence the supply side together with personal
consumption. The figure shows the long-term change from 1970 through 1995 (no survey results
are available for 1971 and 1972, however). In order that non-household consumption
corresponds to the total for “lodging, daily allowances, social expenses and welfare expenses” inthe “Input-Output Tables” from the Ministry of Public Management, Home Affairs, Posts andTelecommunications and the “Input-Output Tables (Updated Tables)” of the Ministry of Economy,
Trade and Industry, service industrial classifications are included in the supply side corresponding
to non-household consumption. Of these, the item that exerts the most direct influence on theretail industry is social expenses, which account for 30-40% of non-household consumption, andwe used just the social expenses from the National Tax Agency to extend the figure to 1998.
The amount of non-household consumption increased continually until 1992 with the
exception of a single year in 1982 (¥2,910 billion in 1970 ¥19,253 billion in 1992), but social
expenses began declining following the collapse of Japan’s bubble economy (¥17,777 billion in1995). Looking at the percentage of total consumption represented by social expenses we can seethat over the long term there was a slightly downward trend, but this tendency became more
pronounced in the 1990s, declining for six consecutive years beginning in 1990 (1989 7.3%
1995 5.9%). When we look at social expenses, these moved in nearly the same manner as all nonhousehold consumption until 1995, and by 1998 had fallen to ¥5,064 billion, a 25% decline fromthe peak spending level in 1991 (¥6,797 billion). This trend in cutbacks in social expenses is
continuing. Taking this trend into consideration there is a very high likelihood that reductions willcontinue to characterize non-household consumption even after 1996, and we assume this has
Development Bank of Japan Research Report/No.14

3

become a long-term trend following the change of direction to cutbacks as personal
consumption has stagnated.
This shows that when we look at the long-term demand trend for consumption by matching
it against the supply side, the supply behavior of the retail industry in the 1990s must be
understood as part of the demand trend in which goods consumption is stagnant and nonhousehold spending (including social expenses) is declining.
Figure 1-3. Long-term Changes in Non-Household Consumption Expenditures(Including Social Expenses)(Yen billions)

（％）

10

20,000Non-household consumption ratio(right-hand scale)

18,0008

16,00014,00012,00010,0006

Non-household consumption
expenditures
Social expenses

8,000

4

6,000
4,000

2

2,000
0

0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99(Survey year)

Notes:

Sources:1.

Non-household consumption expenditures are the total of spending for lodgings, daily allowances, social
expenses and welfare expenses (the total of travel expenses, social expenses, welfare expenses and other nonhousehold consumption expenditures for 1970 and 1973-1976). The social expenses for 1996 through 1998 arefrom National Tax Agency surveys.
2. Non-household consumption ratio = Non-household consumption expenditures/(private final consumption
expenditures + non-household consumption expenditures) * 100.
Ministry of Economy, Trade and Industry, “Input-Output Tables (Updated Tables)”, Ministry of Public Management,
Home Affairs, Posts and Telecommunications, “The 1970-75-80 Linked Input-Output Tables”, and National Tax Agency“Survey of Corporate Business Conditions”

4 Development Bank of Japan Research Report/No.14

2. Demand in Industries other than the Retail Industry According to SNA Statistics
Now let us turn to the topic mentioned in the previous section and use SNA statistics to infer the
specific details of non-retail industry demand, which has tended to increase over time.
Figure 1-4 shows the non-retail industry demand, which we examined at in Figure 1-1,
compared to the services consumption data (service consumption excluding homeowners’
imputed rents) included in SNA statistics for personal consumption and which are thought togenerally correspond to this demand. Except for Fiscal 1997 and Fiscal 1998, the two items have
moved nearly in parallel. We can see that although services consumption growth has slowed
compared to its average rate of growth in the 1980s (6.8%), even in the 1990s it corresponded tothe changes in non-retail industry demand, expanding at an average annual rate of about 3%. Let
us interpret this fact to mean that the supply side for non-retail industries underlies the long-term
trend in the shift in consumption to services seen up until now.
We estimated the details for services consumption based on the classifications for “family
final consumption expenditures by item” from the SNA statistics. For weightings we used thepercentages of consumption of services for each of the 10 major expense categories determinedfrom the “Commodity classification – Yearly average monthly expenditures by type of goods andservices per household for all households” taken from “The Family Income and Expenditure Survey”
published by the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
Over the period from Fiscal 1970 through Fiscal 1998, services consumption expanded 10.2
times from ¥12.2 trillion to ¥124.9 trillion. During this period of time medical and health care
represented the largest share of all personal consumption (Fiscal 1970 7.6% Fiscal 1998
11.8%). This was followed by “Other (travel, restaurants, etc.)” (12.8% 16.0%), “Education”(2.7% 5.6%), “Transport and communication” (6.0% 8.4%) and “Recreation and culture”(2.2% 4.2%). This spending can be seen to reflect the aging of Japan’s population plus achange in consumer thinking regarding what is important in life to “leisure and spare time
lifestyle” and the shift from “things” to “personal satisfaction” as the object of a better life.
Under the long-term trend of the shift towards consumption of services, the environment
centered on the sale of “things” in which the retail industry had operated can be said to have run
into hard times in the 1990s.

Development Bank of Japan Research Report/No.14

5

Figure 1-4. Long-Term Change in Services Consumption Viewed from Demand andSupply
1 40(Yen trillions)
Other
Housekeeping and cleaning

1 20

Housing and land rentals
E ducation
1 00

R ecreation and culture
Transport and communication
Health80

Non-retail industry demand
60

40

20

0
70

72

74

76

78

80

82

84

86

88

90

92

94

96

98

(Fiscal year)
Reference: Spending volume for services consumption and the share as a percent of total consumption(Unit: Yen trillions)Fiscal year
1970
1998
Fiscal year
Services consumption
12.2
124.9
Services consumption
Health
2.6
29.4
Health

1970
35.4
7.6

(Unit: %)
1998
50.3
11.8

Transport and communication
Education

2.1
0.9

21.0
14.0

Transport and communication
Education

6.0
2.7

8.4
5.6

Recreation and culture
Housing and land rentals

0.8
0.8

10.4
8.0

Recreation and culture
Housing and land rentals

2.2
2.3

4.2
3.2

Housekeeping and cleaning
Other

0.6
4.4

2.6
39.6

Housekeeping and cleaning
Other

1.8
12.8

1.0
16.0

Notes:

Sources:1.
2.
3.

Services consumption (nominal) = services consumption – homeowners’ imputed rents
Non-retail industry demand = personal consumption (nominal) – retail industry sales volume
To estimate the details for services consumption we used the classifications by type from the SNA data on
household final consumption expenditures as a standard and divided expenditures proportionately by referringto the percentages for goods and services classifications by product in the household survey.
○ “Health” is the total of consumers’ personal payments plus medical insurance payments for medical expenses.
○ “Recreation and culture” is the sum of monthly expenditures for all types of entertainment and culture,broadcasting and telecommunications charges, entrance fees, admission fees, game fees, etc.
○ “Other” includes barber and hairstyling services, dining at eating and drinking places, lodging expenses, travel
tour expenses, expenses for ceremonial occasions such as weddings and funerals, etc.
Ministry of Economy, Trade and Industry, “The Current Survey of Commerce”, Ministry of Public Management, Home
Affairs, Post and Telecommunications, “The Family Income and Expenditure Survey”, and Cabinet Office, “The Annual
Report on National Accounts”

6 Development Bank of Japan Research Report/No.14

II. Excess Capacity Problems in Non-Manufacturing Industries– The Retail and Personal Services Industries –1.

The Divergence from Demand Projections Based on Questionnaire Surveys
Concerning Business Behavior and the Sense of Excess Capacity
It is reasonable to expect that firms make capital spending plans based upon demand forecasts
for the goods and services to be supplied. Granting that is the case, if realized demand falls
below the demand projections, the capital spending incurred based on the initial demand outlook
will cause distortions from the perspectives of both profitability and recovery of the investment.
This in turn can be thought to lead before long to a sense of excess capacity. The bubble
economy in the latter half of the 1980s and the 1990s following the collapse of the bubble
economy represent periods of time when creation of accurate demand outlooks was extremely
difficult. An examination of the relationship between the divergence between demand anddemand projections and the sense of excess capacity is therefore thought to be particularly
meaningful.
As a surrogate variable for future demand outlook underlying capital spending plans, weused the industry demand outlooks for the next five years, the maximum span of time in the“Business Activity Questionnaire Survey” conducted by the Cabinet Office. For real GDP for eachindustry in the 1990s we contrasted expected results and actual results. We then verified whether
the degree of divergence of these two items has a correlation to the sense of excess capacity seenin the Bank of Japan’s TANKAN Diffusion Index (D. I.) of decisions on manufacturing andoperating capital spending (= “excess” – “shortage”). Specifically, based on the actual values ofreal GDP from 1985 through 1993 for each industry in the SNA statistics, we used the averageannual growth rate outlook for the next five years for each industry (actual numbers) to calculate
the forecast values for real GDP for the years 1990 through 1998. We then compared these to theactual values to determine the degree of divergence, and looked at the correlation of this degreeof divergence and the manufacturing and operating production capacity judgment D. I. Finally, inorder to combine the non-manufacturing industries in this report with those covered by the“Business Activity Questionnaire Survey”, we selected those large companies listed on the first andsecond sections of stock exchanges that are also covered by the production capacity judgment
D.I., excluding the finance and insurance industries.
When looking at the correlation of the degree of divergence in demand and the sense ofexcess capacity by using the Bank of Japan’s TANKAN Diffusion Index (D. I.) of judgment on
production capacity, the focus of the excess capacity problem will inevitably correspond to
manufacturing industries with a relatively high D. I. level because of the tendency to determine
the level of excess capacity by the level of the index. In fact, in contrast to an average capacity
judgment D. I. of 25.5 for large-scale manufacturing industries in 1998 and 1999, the level for
non-manufacturing industries of all sizes was 5.9, a level only 1/5 that of manufacturing. One
would think from glancing at this figure that non-manufacturing industries have no excess
capacity problem.
Nevertheless, the capital spending behavior of non-manufacturing industries in the 1990s
differed from the situation during the 1970s and 1980s when it provided a prop for the economy
even during recessions. No longer is it rare for the growth rate of real capital spending to fall
below the level of the prior year. For the industries covered by this survey, the level of the capital
judgment D. I. for the retail and personal services industries accounts for about 20% of the realcapital spending of non-manufacturing industries (excluding the finance and insurance industries),
a low figure compared to manufacturing industries. Considering that these industries areconfronted directly by circumstances of stagnant consumption demand, however, the possibility
Development Bank of Japan Research Report/No.14

7

exists that a divergence between the industry demand outlook and actual demand has indeed
occurred. By looking at the correlation of the degree of divergence between the industry demand
outlook and actual demand with the manufacturing and operating production capacity judgment
D. I., the sense of excess capacity in non-manufacturing industries becomes clear from thedirection of the change, rather from the level of the D. I.
When we look on at the degree to which real GDP diverged from projections during the
1990s a total industry basis, real GDP has been below the outlook since 1993, the year marking
the bottom of the prior recession. This divergence persisted even during the economic recovery
phase from 1994 through 1996 (¥34 trillion~¥50 trillion: a divergence ratio of 7.4%~10.9%),
and was ¥29 trillion (a divergence ratio of 6.1%) as of 1999. When we try looking at the total forthe retail industry and personal services industry, the real GDP has been below the outlook levels
since 1991 when Japan entered its prior recession, with the divergence reaching ¥11 trillion (adivergence ratio of 18.5%) as of 1998. From this we can see that a situation in which the demand
from the expected growth has not been achieved has continued to the present.
Next we separated manufacturing and non-manufacturing industries and plotted the real
GDP values (1985~1998), five-year future outlooks (1990~2003) and the divergence ratios(1990~1998) between these for both industry categories to create Figure 2-1-1 (manufacturingindustries) and Figure 2-1-2 (non-manufacturing industries).
What becomes clear from the divergence from the demand projections is (1) for the
manufacturing and non-manufacturing industries the real GDP growth rate outlooks for the
1990s (the average annual growth rate using the 1990 actual value and the 1999 projected value)
were 1.9% and 2.0%, a result of about 2% for either industry, but the real GDP growth rateachieved during this period was an annual average of 1.3%, well below these outlooks; (2)although the industry real demand outlook for manufacturing industries (the average annual
growth rate using the 1990 actual value and the 1999 projected value) was 1.1% and assumed tobe even lower than the projected economic growth rate (1.9%), in fact industry real demand
growth rate (the average annual growth rate using the 1998 actual value and 1990 actual value)
was an even lower at 0.9%; (3) industry real demand outlook for non-manufacturing industries(the annual average growth rate using the 1990 actual value and the 1999 projected value) was
2.4% and assumed to be higher than the projected economic growth rate (2.0%), but in fact theindustry real demand growth rate (the annual average growth rate using the 1990 actual value andthe 1998 actual value) was only 1.8%.

8 Development Bank of Japan Research Report/No.14

Figure 2-1. Industry Demand Outlook and Actual Results for the 1990s (1990-1999) andthe Correlation between the Degree of Divergence between Outlook andActual Demand and the Production Capacity Judgment D. I.
Real GDP projection > industry real demand
projection (1.9% > 1.1%)
Figure 2-1-1. Manufacturing(Yen trillions)
1 60
1 40

1 20

80
60

40
20

Production
capacity judgment
D. I. (Right-handscale)
Correlation
coefficient
0.745

Divergence ratio
between actual andoutlook (Right-handscale)

0
85

87

89

91

93

60

40

300

40

30

280

50

Industry real demand(5-year future outlook)

1 00(Yen trillions)
340
Industry real demand(5-year future outlook)

60

Industry real demand(Actual)

95

97

99

01

Real GDP projection < industry realdemand projection (2.0% < 2.4%)
Figure 2-1-2. Non-Manufacturing

320

20

260

10

240

0

220

‑10

200

‑20

180

03

Industry real demand(Actual)30

Production capacity
judgment D. I.
(Right-hand scale)

20
10

Divergence ratio
between actualand outlook(Right-hand scale)

Correlation coefficient
0.828
85

(Calendar year)

50

87

89

91

93

95

97

99

01

0
‑10
‑20

03

(Calendar year)(1) Manufacturing
Real GDP projection > industry real demand
projection (1.9% > 0.2%)
Figure 2-1-3. Manufacturing, 12 Industries(Yen trillions)
220
200
180
160

(Yen trillions)

Correlation coefficient
0.752
Production
capacity judgment
D. I. (Right-handscale)

140
120
100

Divergence ratio
between actual andoutlook (Right-handscale)

Industry
real demand(Actual)80

Industry real demand(5-year future outlook)

60
85

87

Real GDP projection < industry real demand
projection (1.9% < 3.7%)
Figure 2-1-4. Manufacturing, 2 Industries

89

91

93

95

97

99

01

03

40

160

30

140

20

120

10

100

0

80

‑10

60

‑20

40

‑30

20

‑40

0

(Calendar year)

Production capacity
judgment D. I.

Correlation
coefficient 0.615
Divergence ratio
between actualand outlook(Right-handscale)

10
0
‑1 0
‑2 0
‑3 0

Industry real demand(5-year future outlook)
87

30
20

Industryreal
demand(Actual)

85

40

89

91

93

95

97

99

01

‑4 0
03

(Calendar year)

Development Bank of Japan Research Report/No.14

9

(2) Non-manufacturing
Real GDP projection > Industry real demand
projection (1.9% > 1.2%)
Figure 2-1-5. Non-Manufacturing,
2 Industries

Real GDP projection < Industry real demand
projection (2.0% < 2.7%)
Figure 2-1-6. Non-Manufacturing,
5 Industries(Yen trillions)(Yen trillions)

200

Correlation coefficient 0.914

50

280

Correlation coefficient 0.797

50

180

Divergence ratio between actualand outlook (Right-hand scale)

40

260

40

240

140

Production capacity 30
judgment D. I.
20(Right-hand scale)Industry real demand(Actual)

120

10

200

0

180

160

100
80

Industryreal
demand(Actual)Industry real demand(5-year future outlook)

60
40
85

87

89

91

93

95

97

99

01

220

‑10

160

‑20

140

‑30

120

(Calendar year)

80
70
60

Correlation coefficient 0.772
Divergence ratio
between actualand outlook(Right-hand scale)
Production capacity
judgment D. I.
(Right-hand scale)Industry
real demand(Actual)30
20

Industry real demand (5-year future outlook)1087

Divergence ratio
between actualand outlook(Right-hand scale)

‑10
‑20
‑30

87

89

91

93

95

97

50

100

Correlation coefficient 0.536

40

90

30

80

Divergence ratio
between realand outlook(Right-hand scale)

20

70

10

60

0

50

‑10

40

‑20

30

99

01

03

(Calendar year)

89

91

93

95

97

99

01

50

Production
capacity
judgment D. I.
(Right-handscale)

40
30
20

Industryreal
demand(Actual)

10
0
‑10
‑20

Industry real demand (5-year future outlook)
‑30

85

0

Production
capacity judgment
D. I.
(Right-hand scale)(Yen trillions)

50
40

20

Real GDP projection < Industry real demand
projection (2.0% < 2.8%)
Figure 2-1-8. Personal Services Industries(Yen trillions)
90

30

10

85

03

Real GDP projection > Industry real demand
projection (1.8% > 0.9%)
Figure 2-1-7. Retail Industry

Industry realdemand(5-year future
outlook)

03(Calendar year)

10 Development Bank of Japan Research Report/No.14

20

‑30
85

87

89

91

93

95

97

99

01

03

(Calendar year)

Notes:

Sources:1.

The 5-year future outlook for industry real demand for manufacturing and non-manufacturing industries wascalculated based on the future 5-year annual average growth rate outlook (actual value) for each industry, fromthe time of each survey, taken from the “Business Activity Questionnaire Surveys” for each industry (firms listed on
the first and second sections of a stock exchange; excludes the finance and insurance industries)
2. Non-manufacturing is the total for construction, electric power, city gas and water, wholesale and retail, realestate, transportation, telecommunications, and services (including leasing). We have deducted homeowners’
imputed rents that are included in real estate industry data, however, and used the housing rental industry
deflator to convert imputed rents to real rents.
3. The 12 industries included in manufacturing are food and beverages, textiles, paper and pulp, petroleum andcoal, cement, ceramics and glass, iron and steel, metal products, non-ferrous metals, general machinery,transportation equipment, precision machinery, and the total for other manufacturing industries (clothing,personal belongings, parts and wooden products, furniture, printing and publishing, hides, leather and leather
goods, rubber products)
4. The two industries for manufacturing are the total for chemicals (including pharmaceuticals) and electricmachinery.
5. The two industries for non-manufacturing are the total for retailing and transportation and telecommunications.
6. The five non-manufacturing industries are the total for construction, real estate, electric power, city gas andwater, wholesale and services (including leasing).
7. The industry real demand five-year future outlook for the personal services industry and the production
capacity judgment D. I. have been substituted for the services industry (including leasing).
8. The production capacity judgment D. I. = Production capacity “excessive capacity” – “insufficient capacity”(ratio of number of firms responding, % points), large firm base. Average from the surveys in March, June and
September 2000.
9. Divergence ratio for actual and outlook = [Industry real demand (5-year future outlook) – Industry real demand(Actual)] / Industry real demand (Actual)
10. The real GDP projection is the annual average growth rate using the 1990 actual value and the 1999 projection
value.
Bank of Japan, “Short-term Economic Survey of Enterprises in Japan”, and Cabinet Office, “Annual Report on
National Accounts” and “Annual Report on the Business Activity Questionnaire Surveys”

As a result, in both manufacturing industries and non-manufacturing industries a divergencearose from 1993 onward because actual results fell below the outlook (for manufacturingindustries the average amount of the divergence from 1993 through 1998 was ¥12 trillion andthe divergence ratio was 9.3%; for non-manufacturing industries the amount of the divergencewas ¥26 trillion and the divergence ratio was 9.2%). When we calculate the correlation between
the degree of divergence and the sense of excess capacity for 1990 through 1998, we discover
there is a high correlation (correlation coefficients: 0.745 for manufacturing, 0.828 for nonmanufacturing). Compared to the projected economic growth rate, despite that fact that there
were differences in the industry demand outlook between manufacturing industries where stableindustry demand was expected and non-manufacturing industries where rather strong industry
demand was expected, the correlation with a sense of excess capital was common to both. This
tells us that the excess capacity problem in this economic downturn is by no means a problem
just for manufacturing industries.
For non-manufacturing industries as well the demand projection pattern is not the same foreach industry. We can divide non-manufacturing industries into those that anticipated stableindustry demand compared to the projected economic growth rate, and those that expected
strong industry demand. The two industries in the former group are retailing and transportationand telecommunications (industry real demand outlook of 1.2% compared to the expected
Development Bank of Japan Research Report/No.14

11

economic growth rate of 1.9%) (Figure 2-1-5), while the five industries in the latter group areconstruction, real estate, electric power, city gas and water, wholesaling, and services (including
leasing) (industry real demand outlook of 2.7% compared to the expected economic growth rateof 2.0%) (Figure 2-1-6).
For the former two industries a divergence arose because actual demand fell below theoutlook from 1993 onward (the average amount of divergence for 1993 through 1998 was ¥37
trillion, a divergence ratio of 11.3%). We could verify a strong correlation (correlation coefficient
0.914) between the degree of divergence and the sense of excess capacity for 1990 through 1998.
Looking at the retail industry (industry real demand outlook of 0.9% compared to the expectedeconomic growth rate of 1.8%) (Figure 2-1-7), from 1992 onward the actual results fell below theoutlook (average divergence amount of ¥4 trillion from 1992 through 1998, a divergence ratio of
18.4%) and the correlation coefficient is 0.772.
On the other hand, a divergence did arise for the five industries in the latter group as well as
actual demand fell below the outlook from 1994 onward (the average amount of divergence for1994 through 1998 was ¥24 trillion, a divergence ratio of 10.4%). The correlation for this groupis high (correlation coefficient 0.797). When we look at the personal services industries, however,(industry real demand outlook of 2.8% compared to the expected economic growth rate of2.0%) (Figure 2-1-8) included in services industries (industry real demand outlook of 3.6% versus
the expected economic growth rate of 2.0%), a situation where actual demand has been below
outlook since 1990 (the average annual amount of the divergence from 1990 through 1998 was¥6 trillion, a divergence ratio of 16.6%) but the correlation coefficient is low at 0.536. We must
be careful, however, noting that we cannot necessarily use this result to make the snap judgmentthat the personal services industry has a weak correlation with the sense of excess capacity.
As reasons, we note first that the personal service industry has been substituted for theservice industry due to the data limitations of demand projections and the production capacity
judgment D. I., and it is possible the data cannot adequately reflect actual conditions in the
personal services industries that are included in all service industries.
Second, as with the retail industry a divergence from the demand projections arose in the
personal services industry. The importance of this becomes clear when we look at the industries
by dividing them, as we did with the non-manufacturing industries, into the 12 industries (foodand beverages, textiles; paper and pulp; petroleum and coal; cement, ceramics and glass; iron andsteel; metal products; non-ferrous metals; general machinery; transportation equipment; precision
machinery; and other manufacturing industries) for which the industry real demand outlook(0.2%) fell below the projected economic growth rate (1.9%) (Figure 2-1-3) and the two
industries (chemicals [including pharmaceuticals] and electric machinery) for which the industry
real demand outlook (3.7%) was higher than the projected economic growth rate (1.9%) (Figure
2-1-4).
The demand projection pattern for the 12 manufacturing industries is the same as that for
the two non-manufacturing industries including the retail industry. The actual demand from 1993
onwards has continued to fall below the outlook (the average amount of divergence from 1993
through 1998 was ¥18 trillion, a divergence ratio of 20.2%), and the correlation coefficient forthe degree of divergence and the sense of excess capital is high at 0.752. In contrast, the demand
projection pattern for the two manufacturing industries is the same as the pattern for the fivenon-manufacturing industries including the personal services industry. In this case however thecorrelation coefficient is low at 0.615, a situation similar to the case when we looked at just thepersonal services industry.
Nevertheless, the definitive difference from the personal services industry is the relationshipbetween realized demand and the outlook. In the case of the two manufacturing industries,
12 Development Bank of Japan Research Report/No.14

against a backdrop of the strength in demand for electric machinery the industry real demandachieved in the 1990s was 6.4% (the annual average growth rate using the 1990 actual value andthe 1998 actual value), well above the outlook (3.7%). The sense of excess capital will become
greater not only from the process of realized demand being less than the outlook; it can also
increase from the process of actual demand stagnating and approaching the outlook, and thedivergence ratio shrinking. When a sense of excess capital remains, the movement seen on capitalspending for electric equipment as a force propelling information technology investment fromthe latter half of Fiscal 1999 can certainly be regarded as resulting from demand that exceeds theoutlook once again grown stronger.
2.

Comparison of Real Capital Spending with Demand Forecasts or Capital Spending
Corresponding to Actual Demand
As a method to verify the possibility of excess capital we must also check the capital spending
actually completed from the bubble years through the 1990s from the standpoint of whether or
not it was unreasonable. For this purpose we assumed that spending activity in the manufacturingindustries, the retail industry and the personal services industries was based on future demand
outlooks. We used the real capital spending amount and the actual amount of capital stock in
1984 as standards. To calculate whether or not the new capital spending amounts (all enterprises,
including the construction in progress) actually invested by each industry as shown in the “Gross
Capital Stock of Private Enterprises” published by the Cabinet Office were consistent, we compared
the amounts to the real capital spending amount calculated based on the industry demand
outlook (the average annual growth rate [actual value] for the next five years from the time ofeach survey in the years 1985 through 1993) from the “Business Activity Questionnaire Survey”
published by the Cabinet Office or to the real capital spending amount calculated based onrealized demand (the average annual growth rate using the actual value for real GDP by industry
for 1985~1993 and the actual value for real GDP by industry for 1990~1998) from SNA
statistics.
When calculating the required capital spending for a certain rate of growth we used thefollowing function equation, and for the ratio of the rise in the capital coefficient we utilized thetrend from 1975 to 1985 that covers before the bubble years after the period of stable growth.
Real capital spending I = (growth rate g + retirement rateδ + rate of increase in thecapital coefficient for 1975~1985α) × Capital stock K
Where real Gross Domestic Production Y = ε× K (ε: capital productivity = thereciprocal of the capital coefficient)
ΔY/Y (=g) = ε× ΔK/Y + Δε× K/Y = ε× ΔK/Y +Δε/ε
ΔK = I – δ × K
α = – Δε/ε
Figure 2-2-1 through Figure 2-2-6 show the plots for the above three changes in capitalspending (1984~1998) and the industry growth rate (1985~1998), capital coefficient(1970~1998) and capital retirement rate (1970~1998) that correspond to these for manufacturingindustries, the retail industry and the personal services industries.
In the manufacturing industries, real capital spending from 1988 onward was substantiallyhigher than either the capital spending corresponding to the expected growth rate and capitalspending corresponding to the realized growth rate, and we can see that furthermore the swings
Development Bank of Japan Research Report/No.14

13

in spending were quite sharp. In particular the divergent portion that arose between the realcapital spending and capital spending corresponding to the realized growth rate reached acumulative total of ¥87.1 trillion by 1993, which amounts to 54.4% of the cumulative total of¥160.3 million for real capital spending. Compared to the three growth rates, the growth rate
corresponding to real capital spending from 1988 onwards was the highest; from this we calculatethat future demand growth from 1987 through 1991 was expected to increase even further from
4.7% to 7.9%. Over this period of time, however, the growth rate actually achieved was exactly
opposite and fell rapidly from 5.0% to 0.9%. Despite the fact that the expected growth rate
declined from 2.2% to 1.8% even during the prior investment recovery phase from 1994 to 1997,
the growth rate corresponding to real capital spending reflected a demand recovery and assumed
an increase in the growth in future demand from 2.7% to 4.6%. The growth rate actuallyachieved during this period cannot be calculated at the present time. But given the strong
likelihood that it remained at a low level of 0~1% and assuming that the capital spending
corresponding to the realized growth rate remained lower than real capital spending, it’s possible
to see how the spending actually completed was carried out under expectations of high demand.
In contrast to this the real capital spending in the retail industry changed fairly consistently
with the capital spending corresponding to the expected growth rate from 1985 until 1991, but
has been below the capital spending corresponding to the expected growth rate since 1992.
Compared to capital spending corresponding to the realized growth rate, however, the divergence
between the two widened from 1988 onward, just as in the manufacturing industries. The
cumulative amount of the divergence that arose until 1993 reaching ¥13.4 trillion and amounted
to 35.9% of the cumulative total of ¥37.4 trillion for real capital spending. The growth rate
corresponding to real capital spending during this period was calculated to stagnate and fall from
4.3% in 1988 to 1.7% in 1993, but the growth rate actually achieved moved to an even lower level(2.1% in 1988 to ▲0.9% in 1993). In addition, the growth rate corresponding to real capitalspending since 1992 fell sharply from 2.9% in 1992 to ▲1.1% in 1998, providing severe demand
outlooks that were constantly below the expected growth rate (3.4% in 1992 1.5% in 1998).
When one considers that real capital spending in the retail industry from 1994 through 1998 takes
into consideration the low level of capital spending corresponding to the realized growth rateuntil 1993, there is a large possibility that it has remained higher than this.

14 Development Bank of Japan Research Report/No.14

Figure 2-2-1. Manufacturing Industry Capital
Spending

Figure 2-2-2. Manufacturing Industry Capital
Coefficient, Capital Retirement
Rate and Industry Growth Rate

(Yen trillions)

(%)

35
30

Growth rate corresponding to c

9

Real capitalspending c

8

Expected growth rate dCapital retirement rate

7

25

6

20

5

15
10
5

4

Capital spending
corresponding torealized growth rate eCapital coefficient c3

Capital spending
corresponding to
expected growth rate deCapital coefficient dRealized growth rate e

2
1

0

0

70 73 76 79 82 85 88 91 94 97

84 85 86 87 88 89 90 91 92 93 94 95 96 97 98

85 88 91 94 97(Calendar year)(Calendar year)

Figure 2-2-3. Retail Industry Capital Spending

Figure 2-2-4. Retail Industry Capital Coefficient,
Capital Retirement Rate andIndustry Growth Rate

(Yen billions)

(%)

8,000

7

Capital spending corresponding to expected
7,000 growth rate dCapital retirement rate

5

6,000

4

5,000

Capital coefficient d

3
4,000
3,000
2,000
1,000

Expected
growth ratedGrowth rate corresponding to c

6

Capital spending
corresponding torealized growth rate eReal capitalspending cc2Capital coefficient e

1

Realized growth rate e

0
‑1
‑2

0

70 73 76 79 82 85 88 91 94 97

84 85 86 87 88 89 90 91 92 93 94 95 96 97 98(Calendar year)

85 88 91 94 97(Calendar year)

Figure 2-2-5. Personal Services Industries Capital Figure 2-2-6. Personal Services Industries Capital
Spending
Coefficient, Capital Retirement
Rate and Industry Growth Rate
(Yen billions)
8,000
7,000

(%)
8

Capital spending corresponding to
expected growth rate d

6,000

7

Growth rate corresponding to c

6

Realized growth rate e

5

5,000

4
4,000
3

Real capitalspending c

3,000
2,000
1,000

Capitalretirement rate
Capital coefficient d2
1

Capital spending corresponding torealized growth rate e

Expected
growthrate dcCapital coefficient e

0

0

‑1
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98(Calendar year)

70 73 76 79 82 85 88 91 94 97

85 88 91 94 97(Calendar year)

Development Bank of Japan Research Report/No.14

15

Notes:

Sources:“Real capital spending c” is the amount of new investment (all enterprises, including the construction inprogress) in the capital stock of private firms; the growth rate corresponding to this amount was determined by
calculation using the function equation. “Capital spending corresponding to expected growth rate d” is the realcapital spending amount calculated based on the industry demand outlook (Expected growth rate d) from the“Business Activity Questionnaire Survey”. “Capital spending corresponding to realized growth rate e” shows thereal capital spending amount calculated based on the realized demand (Realized growth rate e) from SNA
statistics. All of the above were calculated using real capital spending and the actual amount of capital stock asof 1984 as the standard.
2. For “expected growth rate d” we adopted the average annual growth rate outlook (actual value) for the next
five-year period from the time of each survey from 1985 through 1993; for “realized growth rate e” weadopted the average annual growth rate for real GDP value by industry for 1990 through 1998 from the real
GDP value by industry for 1985 through 1993.
3. The capital retirement rate was determined by dividing the amount of capital retired in any year by the total
capital stock at the end of the prior year.
4. The capital coefficients c~e correspond to capital spending c~e and industry growth rates c~e and were
determined by dividing the average of the capital stock at the end of the current year and end of the prior yearby the real GDP for the current year.
5. “Personal services industries” as used here is the total for inns and other lodgings, movies and recreation, andother services.
Cabinet Office, “Annual Report on National Accounts”, “Gross Capital Stock of Private Enterprises”, and “Annual
Report on the Business Activity Questionnaire Survey”

1.

We can verify a pattern similar to the one in the retail industry for the personal services
industry as well. Real capital spending changed fairly consistently with the capital spending
corresponding to the expected growth rate during the years 1985 through 1989, but has been
below the capital spending corresponding to the expected growth rate since 1990. Compared tocapital spending corresponding to the realized growth rate however, the divergence between thetwo widened from 1988 onward. The cumulative amount of the divergence that arose until 1993
reached ¥7.8 trillion and amounted to 30.3% of the cumulative total of ¥25.8 trillion for realcapital spending, the high level next to the retail industry. The growth rate corresponding to realcapital spending during this period was calculated to stagnate and fall from 4.8% in 1988 to 1.6%
in 1993, but the growth rate actually achieved changed at even lower levels (3.1% in 1988 to ▲0.0% in 1993). Moreover the growth rate corresponding to real capital spending since 1990 fell
sharply from 4.9% in 1990 to ▲0.0% in 1998, and the severe demand outlooks that wereconstantly below the expected growth rate (7.5% in 1990 3.1% in 1998) were similar to the retailindustry. During the previous capital spending recovery phase from 1994 through 1997, however,a period during which the expected growth rate barely changed and ranged from 3.5% to 3.2%,
the growth rate corresponding to real capital spending reflected a recovery in demand, just as
seen in the manufacturing industries. So one difference from the retail industry is that the growthrate of future demand increased gradually from 0.7% to 1.8%.
The above calculations demonstrate that the industry growth rates deduced from the capitalspending actually completed in the retail and personal services industries no longer anticipatedgrowth rates in the 1990s as high as the expected growth rates based on the “Business Activity
Questionnaire Survey”. Nevertheless, the changes in capital spending that produced a divergence
between real capital spending and the capital spending corresponding to the realized growth ratefrom the bubble years through the 1990s exist because the growth rates actually achieved were
below the growth rates corresponding to real capital spending. In light of this point we cannot
16 Development Bank of Japan Research Report/No.14

deny the considerable possibility that when faced with the stagnation of actual demand, thecapital spending actually carried out was unreasonable. Nor is it possible to minimize therelationship to the problem of capital excess when evaluating retail industry and personal services
industry spending during this time period from a macro perspective.

Development Bank of Japan Research Report/No.14

17

III. Retail Industry Supply Behavior and Issues under Deregulation
1. The Effect of Deregulation of the Large-Scale Retail Store Law
We will begin by verifying the relationship of the number of stores established and reported
during the decline in the retail industry growth rate that we deduced from real capital spending in
the 1990s with deregulation of the Large-Scale Retail Store Law [enacted March 1, 1974 andabolished May 31, 2000 and followed by the enactment of the Large-Scale Retail Store Location
Law on June 1, 2000].
The provisions of the Large Stores Law created an obligation when building storesexceeding 500m2 in total area to report the opening date, retail floor area, hours of business andnumber of closing days per year, principally for the purpose of protecting small and medium-size
stores. Adjustments to build stores were made based on the contents of the report.
Figure 3-1 shows, for the retail industry, the reported circumstances under the Large-Scale
Retail Store Law (Fiscal 1974~Fiscal 1999) and the changes in the amount of new investment for
the entire retail industry (Fiscal 1955~Fiscal 1998).
The opening of new large-scale retail stores under the Large Stores Law was controlledduring the 1980s with amendment of the law in 1979 to add a second class of stores subject toregulation and lengthen the time period for store coordination, and by central government
official notification advising self-control on new stores or the strengthening of unique regulations
by local administrations (average number of new stores opened annually during the 1980s: 560).
Changes in the form of the appropriate application of the Large Stores Law declared in “Vision
for Distribution in the 1990s” by the Ministry of Economy, Trade and Industry in June 1989 and thepromise to review the Large Stores Law after three years that was incorporated in the Interim
Report of the Japan-U.S. Structural Impediments Initiative issued in April 1990, however, andderegulation of the Large Stores Law implemented three times in the 1990s, all had the same
effect of accelerating the opening of new stores centered on Class 2, so that the average numberof stores opened annually in the 1990s was 1,770, or three times above the average of the 1980s.
When we look at the amount of new capital spending by corporations in the 1990s when thenumber of notifications for large-scale retail stores increased rapidly, the amount in Fiscal 1998(¥3.8 trillion) had declined by about 30% from the peak in Fiscal 1991 (¥5.5 trillion).
Nevertheless, since Fiscal 1992 corporate new capital spending has fluctuated at around ¥4
trillion per year, nearly as high level as in the bubble years, and has not declined as much as
capital spending for the entire retail industry (which declined about 40% from ¥7.4 trillion in
Fiscal 1991 to ¥4.5 trillion in Fiscal 1998). There was a large decline in capital spending by sole
proprietors, however, which also reflected changes such as the closing of stores owned by sole
proprietors as represented by the “hollowing out” of business districts in urban areas. Following
its peak in Fiscal 1989 (¥2.0 trillion) spending turned downward, falling to ¥0.7 trillion in Fiscal
1998, a level not seen since the early 1970s. The result was that the percentage of retail industry
corporate capital spending began to rise in the 1990s (72.5% in Fiscal 1990 85.3% in Fiscal
1998), showing activity that differs from the manufacturing industries that have fluctuated up to
now at well over 90%.

Development Bank of Japan Research Report/No.14

19

Figure 3-1. Changes in Notifications for Large-Scale Retail Stores and theAmount of New Investment by the Retail Industry(Cases)(Yen billions)

8,000

2,500
Category 1

Category 2
7,000

2,000

Amount of new capital spending by the retail industry
all enterprises) (Right-hand scale)

6,000
5,000

Amount of new capital spendingby incorporated enterprises(Right-hand scale)
Amount of newcapital spendingby sole proprietors(Right-hand scale)

1,500

1,000

4,000
3,000
2,000

500
1,000
0

0
55

57

59

61

63

65

67

69

71

73

75

77

79

81

83

85

87

89

91

93

95

97

99

(Fiscal year)
Notes:

1.
2.

3.

Sources:

In addition to new capital spending, also includes spending that increased retail floor space to more than 500m2.
The definition of “retail floor space” changed as follows as the result of amendments to the Large Stores Law
in Fiscal 1979 and Fiscal 1992.
Fiscal 1974-1978: Retail floor space of 1,500m2 or greater (for Special Wards in Tokyo and ordinance-designatedcities, 3,000m2 or greater)
Fiscal 1979-1991: Class 1 retail floor space of 1,500m2 or greater (3,000m2 or greater), Class 2 retail floor spaceof more than 500m2 but less than 1,500m2 (more than 500m2 but less than 3,000m2)
Fiscal 1992 and later: Class 1 retail floor space of 3,000m2 or greater (6,000m2 or greater), Class 2 retail floor
space of more than 500m2 but less than 3,000m2 (more than 500m2 but less than 6,000m2)
The amount of new capital spending is the real value including the construction in progress for gross assets
based on the average price in 1990 (before depreciation).

Ministry of Economy, Trade and Industry, “Notifications for Large-Scale Retail Stores”, and Cabinet Office, “Gross
Capital Stock of Private Enterprises”

The relationship between the fact that the number of large-scale retail store notifications
increased rapidly in the 1990s and deregulation of the Large Store Law carried out at the sametime cannot be ignored. The possibility is quite high that even after deregulation was effected thelevel of corporate capital spending in the retail industry was maintained at a high level because it
was difficult to rapidly adjust spending to correspond to realized demand. But we must ask thequestion again: even if we assume that deregulation was implemented and the competitiveenvironment liberalized, it was possible for businesses to check the divergence from realized
demand, continually review future demand projections, and avoid the rush to open stores – but
why didn’t this happen? This is the major point we must consider after understanding the supply
behavior of the retail industry in the 1990s. To put it another way, up to the 1980s when store
20 Development Bank of Japan Research Report/No.14

opening regulations were strict, it was assumed in many cases that the coordination time period
until a store was opened had grown longer and that it was easy to anticipate obtaining medium tolong-term profits after a store opened. So to what extent was there an environment in whichbusinesses could accurately project future demand trend and continually review divergence fromthe demand forecast?
As we saw in Chapter 1, until the happy 1980s goods consumption demand continued to
grow. For the supply side we can see that rather than focus attention on how to develop, stores
focused on the medium to long-term demand trend. Under a strictly regulated environment, a
store strategy of utilizing limited new store opportunities as much as possible was an easy course
to adopt. Even if the initial cost of entry were high, if a store were authorized the probability
that other competing companies could enter the market afterwards was low. On the other hand,during the 1990s when regulations were relaxed, we can see that as goods consumption demandstagnated, the supply side fell into a vicious circle of store building rather than search for an
approach that focused on the medium to long-term demand trend. Managers at each company
assumed that competing companies would continue opening as many new stores as possible,
which would cause sales at their own adjusted2 stores to plummet if they restricted new store
openings. In order to avoid this danger each company felt compelled to open as many new storesas possible to cope with the threat.
2. Relationship of the Number of Stores and Sales Volume, by BusinessIn this section we will briefly examine what kind of changes appeared in the results of the retailindustry supply activities that can be seen under deregulation and in the store businessconditions.
The relationships between the number of stores in the 1990s for each business (stock basis)and the average annual growth rate for each business’ sales volume are plotted in Figure 3-2.
Although a generally positive correlation can be discovered between the two variables, here we
tried to separate them using an average retail floor space per store (stock base) of 500m2 as astandard, given that 500m2 is the lower limit under the Large Stores Law.
Businesses that have a retail floor space of 500m2 or greater are department stores (16,089m2
in 1997), general supermarkets (7,166m2 in 1997) and specialty supermarkets (731m2 in 1997).
Throughout the 1990s, however, the only business to optimistically maintain both the number ofstores and sales volume were specialty supermarkets that specialized in food, clothing and home
items (average annual growth rate in number of stores: 6.5% from 1991 to 1994, 8.6% from 1994
to 1997, 2.7% from 1997 to 1999; average annual growth rate in sales volume: 6.8% from 1991 to
1994, 6.1% from 1994 to 1997, 4.9% from 1997 to 1999). Specialty supermarkets compete withdepartment stores and general supermarkets on the point of specializing in a roadside format,
but even though the retail floor space is small compared to the other two businesses they can besaid to be competing vigorously.

2“Adjusted” means that the percentage change is calculated only with figures collected from stores which were surveyed in both
years.

Development Bank of Japan Research Report/No.14

21

Figure 3-2. Relationship between Average Annual Growth Rate in the Number of Stores,
by Business and Retail Floor Space per Store and the Average Annual
Growth Rate in Sales Volume

Average annual growth rate in sales volume(%)(1) Businesses with average retail floor space per store of 500m2 or greater
10
1991→1994
1994→1997
1997→19998
6
4

Department stores(14,086m2→16,089m2)

Specialty supermarkets(625m2→731m2)

2
0

-10

-8

-6

-4

-2 -2 0

2

4

6

8

10

-4
-6
General supermarkets(5,659m2→7,166m2)-8-10

Average annual growth rate in number of stores (%)

Average annual growth rate in sales volume(%)(2) Businesses with average retail floor space per store of less than 500m2
10

1991→1994
1994→1997

Convenience
stores 8(94m2→99m2)

6

1997→1999

4
2
Other supermarkets(97m2→89m2)

0
-18

-14

-10

-6

-2-2

2

6

10

14

-4
-6
Specialty stores(48m2→56m2)-8-10

Average annual growth rate in number of stores (%)
Note:
Sources:

The figures within parentheses ( ) for each business show the average retail floor space per store for 1991 through1997. Figures from the “1999 Bulletin” base have not been published.
Ministry of Economy, Trade and Industry, “Census of Commerce – Statistical Edition by Business (Retail Industry)”

22 Development Bank of Japan Research Report/No.14

In contrast to this, for department stores and general supermarkets – which are more
representative businesses when looking at the personal consumption trend from a supply
perspective – the number of stores closed exceeded the number of new stores opened,particularly during the period from 1997 through 1999 when consumption slumped. As a result,
together with a broad decline in the number of stores the change in sales volume also turned
negative (5.4% annual average decline for number of stores and a 6.2% average annual decline
for sales volume during this period) and the desperate struggle among stores intensified.
On the other and, businesses with retail floor space per store of less than 500m2 include
other supermarkets (89m2 in 1997), convenience stores (99m2 in 1997) and specialty stores (56m2
in 1997). Only convenience stores have shown bullish growth in both the number of stores andsales volume (average annual growth rate in number of stores: 5.8% from 1991 to 1994, 9.1%
from 1994 to 1997, 0.7% from 1997 to 1999; average annual growth rate in sales volume: 8.7%
from 1991 to 1994, 9.2% from 1994 to 1997, 4.5% from 1997 to 1999) through the 1990s,
however. Convenience stores have a small retail floor space that is outside the purview of theLarge Stores Law. They are specialized in industrial areas, residential neighborhoods and office
districts, and have achieved high growth through aggressive product management using POS
systems and 24-hours operations. This stands in contrast to specialty stores where the decline inboth the number of stores and sales volume continues (average annual growth rate in number ofstores: 2.6% decline from 1991 to 1994, 3.3% decline from 1994 to 1997, 2.9% decline from1997 to 1999; average annual growth rate in sales volume: 0.9% decline from 1991 to 1994, 0.9%
decline from 1994 to 1997, 5.9% decline from 1997 to 1999).
In addition to the disparity in the size of corporations and sole proprietorships seen in thefirst section of this chapter, in the 1990s the disparity between businesses has also become
conspicuous. Specialty supermarkets and convenience stores grew bullishly but their power has
lost its edge since 1997. Even among companies in the same business the performance winners
and losers are gradually becoming clearer, and we might say we’ve reached a point where retailindustry trends have taken on extremely complicated aspects.
3.

Trends in the Number of Large-Scale Retail Stores (Department Stores andSupermarkets) and Real Sales Volume
In the previous section we looked at the stance taken by department stores and generalsupermarkets in the tough battles in the 1990s; in this section we will confirm the trends for thenumber of stores and sales volume for each year for large-scale stores. Considering that the
1990s were a time of price disruptions, in order to look at the changes of the quantity base wewill convert sales volume into real values. Furthermore, in order to look at the effect of theincrease in store openings in the 1990s, beginning with Fiscal 1991 we will examine the changes
on both a total stores basis and adjusted stores basis.
Figure 3-3-1 and Figure 3-3-2 show the long-term time series from Fiscal 1973 throughFiscal 1999 for the changes in the rate of growth compared to the prior fiscal year for real sales
volume and the number of stores (stock basis) for large-scale retail stores (department stores andsupermarkets), taken from the “Current Survey of Commerce” issued by the Ministry of Economy,
Trade and Industry. To restate sales amounts into real sales volume we used each indicator for“agricultural, marine and animal products”, “manufactured products”, “printed materials” and“restaurants”, which have the highest connection to the industries in question, taken from theindices for commodities and services categories in the “Consumer Price Index” issued by the
Cabinet Office, and deflated sales to the 1995 base weight using the weighted average price index.
Looking at all large-scale retail stores, the growth rate of real sales volume on a total stores
Development Bank of Japan Research Report/No.14

23

basis was negative in Fiscal 1997 for the first time in three years (2.9% decline compared to theprior fiscal year). After remaining nearly the same as the prior fiscal year level in Fiscal 1998 andFiscal 1999 (0.1% increase in Fiscal 1998, 0.7% increase in Fiscal 1999), however, on an adjusted
stores basis sales have fallen below the prior year level since Fiscal 1997 (6.2% decline in Fiscal
1997 3.7% decline in Fiscal 1998 3.0% decline in Fiscal 1999). Behind sales remaining at thelevel of the prior fiscal year on a total stores basis, however, is the increase in the number ofstores opened (the number of stores at fiscal year-end, beginning in Fiscal 1994, the first year forwhich a time series comparison is possible, expanded from 2,761 stores at the end of Fiscal 1994
to 3,632 stores at the end of Fiscal 1999, an annual rate of growth of 5.6%). Looking at the rateof growth in real sales volume converted to a per-store basis, we can see there has been nochange in the situation where sales fell below the prior year level (8.5% decline in Fiscal
1997 7.7% decline in Fiscal 1998 3.5% decline in Fiscal 1999).
Looking at just department stores, initially there was only a small number of stores. Almost
no increase in the number of stores is seen because in the latter half of the 1990s the number of
new stores opened and the number of stores closed were nearly the same (428 stores at the endof Fiscal 1994 421 stores at the end of Fiscal 1999). For this reason there is almost no
difference between total stores and adjusted stores in the rate of growth in real sales volume. For
both categories, however, since Fiscal 1997 real sales have fallen below the prior fiscal year level
for three consecutive years (total stores: 5.4% decline in Fiscal 1997 3.0% decline in Fiscal
1998 1.9% decline in Fiscal 1999; adjusted stores: 6.8% decline in Fiscal 1997 3.4% decline in
Fiscal 1998 1.5% decline in Fiscal 1999). The rate of growth shows the same pattern afterconverting real sales volume to sales per store (4.7% decline in Fiscal 1997 1.9% decline in
Fiscal 1998 2.4% decline in Fiscal 1999).
For supermarkets (Figure 3-3-2), on the other hand, the increase in the number of stores
opened is remarkable (2,333 stores at the end of Fiscal 1994 3,211 stores at the end of Fiscal
1999, an annual rate of increase of 6.6%). As a result, although sales decreased slightly on a total
stores basis in Fiscal 1992, Fiscal 1993 and Fiscal 1997, the rate of growth after converting sales
to real sales volume per store rose in Fiscal 1995 but afterwards fell below the prior year level for
four consecutive years (1.9% increase in Fiscal 1995 1.4% decline in Fiscal 1996 7.3% decline
in Fiscal 1997 6.4% decline in Fiscal 1998 1.9% decline in Fiscal 1999). Moreover, thedifference between total stores and adjusted stores in the rate of growth in real sales volume has
widened (1.9% points in Fiscal 1991 7.0% points in Fiscal 1999). Considering that there wasalmost no increase in the number of stores in the 1980s when new store regulation was strict, by
analogy there was nearly no difference at that time between total stores and adjusted stores in therate of growth of real sales volume. So the slump during the 1990s at adjusted stores is anespecially notable phenomenon in supermarket history.

24 Development Bank of Japan Research Report/No.14

Figure 3-3-1. Department Store Real Sales Growth Rate and Number of Stores(%)(Stores)
3,500

20

3,000

16

All stores (Right-hand scale)
2,500

12

2,000

8

1,500

4

1,000

0

Adjusted stores (Right-hand scale)
Number of department stores (Fiscal year-end, lefthand scale)

500

-4

0

-8
73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

(Fiscal year)

Figure 3-3-2. Supermarket Real Sales Growth Rate and Number of Stores(%)(Stores)

3,500

20

Number of supermarkets (Fiscal year-end, left-hand scale)
3,000

16

All stores (Right-hand scale)
2,500

12

2,000

8

1,500

4

1,000

0

Adjusted stores (Right-hand scale)

500

-4

-8

0
73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

(Fiscal year)

Note:

Sources:

The definition of “large-scale store” was changed as follows (amendments to the Law in July 1978 and July 1991).
◯ Department store: A shop that is a retail store with 50 or more employees and does not fall under the definitionof a “supermarket”, and has a retail floor space of 3,000m2 or greater in Special Wards inTokyo and ordinance-designated cities or 1,500m2 or greater in other areas.
◯ Supermarket (“self-service store” before Fiscal 1991): Until Fiscal 1991, a retail store with 50 or more employees
and which has adopted self-service methods for 50% or
greater of the retail selling space; since Fiscal 1991, a store
which has a retail floor space of 1,500m2 or greater.
Ministry of Economy, Trade and Industry, “Summary of Dynamic Statistics of Commerce”, and Ministry of Public
Management, Home Affairs, Posts and Telecommunications, “Annual Report on the Current Survey of Commerce”

Development Bank of Japan Research Report/No.14

25

4.

Case study: An Examination of the New Store Effect and Store Efficiency inSupermarkets
Until now the phenomenon where the sales trend at adjusted stores worsened as the efforts ofsupermarkets to open new stores grew more aggressive in the 1990s has always been a result
from aggregate data. In the “Current Survey of Commerce”, if one year has passed since a store was
opened that store is counted as an adjusted store. So stores opened in the 1980s and stores
opened in the first half of the 1990s, for example, are all counted as adjusted stores as long as
they are still in business at the time of the survey. In this situation the phenomenon of a sales
slump at adjusted stores is effected greatly by the sales slump at old stores opened in the 1980s,
and we cannot ascertain whether new stores opened in the 1990s are steadily improving theiroperating results.
The rate of increase in the retail industry capital coefficient (=capital stock/real GDP),
which is an indicator of capital efficiency from a macro perspective, has been faster than the
average rate of increase for manufacturing industries (retail industry: 0.9 in 1970 2.2 in1990 3.4 in 1998; manufacturing: 1.4 in 1970 2.1 in 1990 2.8 in 1998) and has been increasing
even more rapidly since the beginning of the 1990s (see Chapter 2, Section 2, Figure 2-2-2 andFigure 2-2-4). This suggests it is necessary to verify the investment in stores opened in the 1990s
and make corrections accordingly. When we compare the change over time in store sales or store
efficiency after a store opens to those of stores opened in the 1980s, and assuming it was notpossible for stores opened in the 1990s to follow the route to higher revenue and that store
efficiency is not always very good, then in the face of stagnant consumption demand theapproach to investing in stores based on the premise of long-term investment recovery should
probably be reconsidered.
In order to clarify this point we selected supermarkets as one example of a business with aremarkable number of new store openings. For 48 companies for which individual stores can berandomly chosen from securities information resources, we created panel data (time-series
tracking data) for stores that were newly opened since the 1980s and were still in existence as ofMarch 19993. We divided this into two groups according to business, for general super markets
3

The following points required careful attention when creating the panel data.
○ The number of data was 1,925 stores out of 2,242 stores (excluding 317 stores that fall in the categories below) for 48
supermarkets for which sales, invested capital (land, buildings, structures, etc.) and retail floor space for each store newly
opened from 1980 through 1998 are publicly disclosed in the “operating conditions” and “capital conditions” in eachcompany’s marketable securities information (600 stores opened from 1980 through 1989, 1,325 stores opened from 1990
through 1998; the names and number of stores opened by each company are shown in Table 3-1).
z Store was closed during this time period
z Management of the store was transferred to a company outside the subject group during this time periodz Stores integrated or merged into another store of the same company during this time periodz Stores included among the stores added through merger with another company during this time period, but
excluding stores newly opened in the year of the merger.
z Stores that ceased operations for a period of time for renovations, etc. during this period of time and which did notprovide continuous data
○ By referring to the business classifications in the “Current Survey of Commerce” of the Ministry of Economy, Trade andIndustry and using whether sales of special departments were 70% or greater of the company’s recent sales as a criteria,
the 2,242 stores of the 48 supermarket companies were divided into 1,012 stores at 18 supermarket companies with lessthan 70% and 913 stores at 30 specialized (food product) supermarket companies with 70% or greater.
○ The average monthly sales were annualized and the resulting numbers deflated to calculate the real value by

using a weighted average price index using the 1995 standard weight that was chosen from the indices for“agricultural, marine and animal products”, “manufactured products”, “printed materials” and “restaurants”
from the commodity and service classification indices in the Cabinet Office Consumer Price Index as having thehighest relationship to the business in question.
○ To aggregately total the number of stores by when stores opened we grouped stores by the number of years passed until it
was possible to follow-up all of the stores in each five-year period (the 15th year from store opening for stores opened from26 Development Bank of Japan Research Report/No.14

and specialty (food products) supermarkets, and compared the changes over time in sales or store
efficiency after the store opened based upon the difference between when the stores opened orwhether the land was owned when the store was built. The results are arranged in graphs in
Figure 3-4 through Figure 3-8. From the graphs we can understand the following.
(1) The number of store openings for both general supermarkets and specialty supermarkets
increased rapidly in the 1990s. Simultaneously there was a tendency for the retail floor space
per store to increase at both types of supermarkets (general supermarkets: 5,957m2 in1990 7,549m2 in 1998; specialty supermarkets: 1,375m2 in 1990 2,018m2 in 1998). Looking
at the cumulative total stores, specialty supermarkets increased as a percentage of thenumber of large-scale stores with a retail floor space of 1,500m2 or greater (29.2% in1990 56.0% in 1998), while general supermarkets remarkably expanded the retail floor
space per store on a new store basis (6,610m2 in 1990 8,969m2 in 1998).
The amount of capital spending per store to open a store grew larger for generalsupermarkets from 1989 through 1993 and for specialty supermarkets from 1990 through1993. During this period the average investment per retail floor space for both types ofstores reached roughly ¥1.1 million per 3.3m2. The average investment to open a store from1994 through 1998, however, was less than 50 to 60% of this level (¥520,000 per 3.3m2 forgeneral supermarkets, ¥630,000 per 3.3m2 for specialty supermarkets), declining to nearly
the level of the average investment to open a store during the 1980s (an average of¥510,000 per 3.3m2 from 1980 through 1988 for general supermarkets, and an average of¥540,000 per 3.3m2 from 1980 through 1989 for specialty supermarkets).
(2) We compared the change in real sales over time by dividing the stores into four groups for
1980-84 (294 stores), 1985-89 (306 stores), 1990-94 (481 stores) and 1995-98 (844 stores),depending upon when the stores opened, and using the level of real sales per store at thetime the stores opened as 100. When we examine the cases for stores opened in the first halfof the 1980s and those opened in the second half of the 1980s, the number of years untilsales reached a peak after the store opened declined from the 10th year to the 6th year.
Moreover, the increased revenue effect at the time of peak sales compared to the time thestores opened also declined slightly from 23% growth to 19% growth. On the other hand,the sales after store opening for stores opened in the first half of the 1990s did not exceed
sales at the time of store opening but showed no growth. For stores opened in the latter halfof the 1990s, the sales after the store opened fell by approximately 10% compared to sales at
the time of store opening. Here is a situation where supermarkets were unable to find a path
to increased revenue after store opening in the manner seen at stores opened in the 1980s.
This trend appears to be a new pattern for general supermarkets. At specialized
supermarkets, in the case of stores opened in the latter half of the 1980s the increased
revenue effect at the time of sales peak compared to when a store opened as a 31% increase,higher than in the case of stores opened in the first half of the 1980s (increased revenue
1980 through 1984, the 10th year from store opening for stores opened from 1985 thorough 1998, and the 5th year fromstore opening for stores opened from 1990 through 1994), and by each year for stores opened from 1995 through 1998 (forstores opened in 1998, only the first year when opening)○ To aggregately total the number of stores by whether or not they owned the land for stores, we used <1,847 stores coveredby the study [of which 431 stores owned land (general supermarkets 241 stores, specialty supermarkets 190 stores) and
1,416 stores leased land (general department stores 712 stores, specialty department stores 704 stores)]>, excluding storesfor which the form of land use changed during the period of time since the store opened (stores for which the land wasowned when the store opened but which was sold or converted to a land lease, or stores for which the land was leased
when the store opened but which was later purchased).
○ Tangible fixed asset turnover ratio = Nominal sales/average of the tangible fixed asset balances at the beginning and end of
the period (excluding the price of land). The subject number of stores was the 1,847-store base indicated above. To
calculate the store turnover ratio for just the first year when the store opened we used the year-end balance.

Development Bank of Japan Research Report/No.14

27

effect of 25% increase). But this is related to the fact that at stores opened in the latter halfof the 1980s, the scale of real sales at the time of store opening was at a level nearly 30%
lower than at stores opened in the first half of the 1980s. Furthermore, the change in sales
after store opening at specialty supermarket stores opened in the latter half of the 1990s has
not dropped as in the case of general supermarkets.
(3) When we try breaking down the percentage change over the prior year of real sales per store
by time of store opening into components for retail floor space per store and store
efficiency (real sales per store retail floor space), frequently the increase in retail floor space
per store after store opening contributes a positive effect. The time period to improve store
efficiency grows shorter however, the newer the store, and looking at just that from when astore opened, the time until store efficiency declines has shortened (time when store
efficiency begins to decline: tenth year for stores opened in the first half of the 1980s, fifth
year for stores opened in the latter half of the 1980s, fourth year for stores opened in thefirst half of the 1990s). At stores opened in the latter half of the 1990s, however, thedecline in store efficiency in the second year after store opening is remarkable. Thistendency can be confirmed for both general supermarkets and specialty supermarkets. But
the fact that at specialty supermarket stores opened in the latter half of the 1990s thechange in sales after store opening has not plunged as much as that at general supermarkets
is because the decline in store efficiency in the second year after store opening is relatively
small. The fact that even after the second year store efficiency is maintained at specialty
supermarkets is a large factor.
(4) We also compared the change over time by dividing stores on the basis of whether or not
the land for the store was owned at the time of store opening and using the level of real
sales per store at the time the store opened, looked at by year of store opening, as 100. In
the case of stores opened in the 1990s, both types of supermarkets are identical on the
point that neither was able to find a route to increased revenues after store opening, but thefollowing characteristics can be highlighted by looking at the stores by business.
c At stores on land that was owned, the performance of stores opened in the latter halfof the 1990s compared to that of stores opened in the 1980s deteriorated remarkablyat specialty supermarkets. In the case of stores opened in the latter half of the 1990s,
both general supermarkets and specialty supermarkets showed the same degree of large
decline (a decline of 10% to 15% compared to when stores opened).
d For stores on land that was leased, specialty supermarkets opened in the 1990s did not
do as badly as general supermarkets, maintaining sales at nearly the same level as whenstores opened.
(5) When we divided stores on the basis of whether or not the land was owned at the time ofstore opening, and examined them by breaking down the change from prior year in real sales
per store looked at separately by year of store opening into components for retail floor
space per store and store efficiency (real sales per retail floor space), frequently an increase
in retail floor space per store after store opening contributes a positive effect. The time
period to improve store efficiency grows shorter to the extent the store is new, however, andlooking at only the time from when a store opened, both types of supermarkets are identicalon the point that the time until store efficiency declines has shrunk. The following
characteristics can be highlighted by looking at the stores by business.
c At stores on land that was owned, at specialty supermarkets the performance of stores
opened in the first half of the 1990s compared to that of stores opened in the 1980s
show an obvious degree of deterioration. At both general supermarkets and specialty
supermarkets, store efficiency in the case of stores opened in the latter half of the
28 Development Bank of Japan Research Report/No.14

1990s deteriorated substantially in the second year after opening, and continued to
decline thereafter in the case of general supermarkets.
d For stores on land that was leased, in contrast to general supermarkets where the store
efficiency at stores opened in the 1990s deteriorated substantially in the second year
after opening and did not improve in following years, the decline in store efficiency atspecialty supermarkets was relatively small and, moreover, improved somewhat in thecase of stores opened in the latter half of the 1990s.
(6) We compared the change over time in the tangible fixed asset turnover ratio viewed by theyear of store opening. At stores opened in the first half of the 1990s the turnover ratio
declined to the extent a store is new, but this was greatly effected by the decline in theturnover ratio at general supermarket stores on leased land. At specialty supermarkets theturnover ratio of stores opened in the first half of the 1990s declined remarkably comparedto that of stores opened in the 1980s, without regard to whether or not the land was owned.
On the other hand, in general the turnover ratio at stores opened in the latter half of the
1990s is higher than the turnover ratio at stores opened in the first half of the 1990s,
regardless of the business or whether or not the land is owned. In particular the turnoverratio at general supermarkets opened in 1995 and 1996 on owned land was much higher
than the turnover ratio at stores opened in the first half of the 1980s. This is because theinitial amount of capital investment declined nearly to the level of the initial capital
investment at stores opened in the first half of the 1980s, as well as the fact that compared
to stores opened in the first half of the 1980s the scale of sales at the time a store opened
was much larger. At stores opened in 1997 and 1998, however, the level of the turnoverratio declined to a level near that of stores opened in the first half of the 1980s, effected by
the increase in initial capital investment.

Development Bank of Japan Research Report/No.14

29

Table 3-1

Names of Companies Studied and New Store Openings by Company(Unit: stores)

30 Development Bank of Japan Research Report/No.14

Total

The marketable securities reports of each company

Subtotal

Sources:

Subtotal

General supermarkets
Jusco Co., Ltd.
Ito-Yokado Co., Ltd.
Daiei, Ltd.
Uny Co., Ltd.
MyCal Group, Inc.
Seiyu, Ltd.
Izumi Corp.
HeiwadoNagasakiya Co., Ltd.
Shinshu Jusco Ltd.
Kotobukiya Co., Ltd.
Valor Co., Ltd.
Tokyu Store
Izumiya Co., Ltd.
Fuji Co., Ltd.
Tobu Store
Olympic Corp.
Domy Co., Ltd.
Specialty (Food) supermarkets
Life Corp., Ltd.
Maruetsu, Inc.
InageyaYork-Benimaru Co., Ltd.
Chainstore Okuwa
Kasumi Co., Ltd.
Wellmart Co., Ltd.
Yamanaka Co., Ltd.
Marukyu
Yaoko Co., Ltd.
Taiyo
Marukyo Corp.
Super Daiei Co., Ltd.
Sotetsu Rosen
Kansai Super Market Ltd.
Harashin
Flex
Ralse Co., Ltd.
Hymart Co., Ltd.
Fukuhara Co., Ltd.
MaruyaMammy Mart Corp.
Yamazawa Co., Ltd.
SSV
Maruwa Co., Ltd.
Tairaya Co., Ltd.
Belc Co., Ltd.
Matsuya
Aoki Super Co., Ltd.
Fuji Co., Ltd.
Total

SubtotalStores opened
during 1995-98
95 96 97 98
85 102 102 92 381 1,012
14 20 23 22 79 164
6 6 8 9 29
96
12 6 7 4 29
93
9 14 7 10 4082
5 6 5 6 2276
4 3 7 2 1668
6 8 5 3 2258
2 7 5 1 1558
1 3 2 2 845
9 3 4 6 22
43
2
1 4 7
41
4 5 6 8 2333
1 2 4 2 933
4 3 5 2 1432
2 9 4 4 1929
1 2 3 2 828
2 3 4 4 1322
1 2 2 1 611
96 116 124 127 463 913
17 22 27 19 85 127
8 11 5 7 3195
5 6 7 4 2277
5 5 8 2 2060
4 6 3 7 2055
8 5 5 7 2551
3 5 6 6 2045
4 4 5 4 17
39
2 1 3
31
2 4 5 6 1730
6 4 7 3 2024
3 6 4 4 1724
3 3 2 5 1323
2 1 3 1 721
2 2 3 4 11
19
3 3 4
10
19
3 1
1 5
18
3 2 5 1018
2 2 9 1317
2 4 4 3 1317
6 3 1 3 1316
2 1 1 3 715
2 4 4 3 1313
6 6 12121
1 3 1 6 22 1 5
11
3 2 5 1010
1 1 1 2 1 3 78
1 2 1 3 77
1 1 2 1 1 1 5
6
3 1 1 5
570 70 59 46 49 294 48 63 63 75 57 306 63 76 84 111 147 481 181 218 226 219 844 1,925
SubtotalStores opened
Stores opened
Stores opened
from 1980-84
during 1985-89
during 1990-94
80 81 82 83 84
85 86 87 88 89
90 91 92 93 94
58 55 41 31 33 218 34 35 42 38 32 181 28 32 42 58 72 222
5 8 6 2 3 24 5 4 7 5 5 26 4 2 8 11 10 35
10 4 7 4 5 30 3 4 5 4 3 19 2 3 3 6 4 18
6 7 3 420 2 5 5 5 3 20 3 5 4 5 7 24
5 3
2 2 12 5 2 2 2 5 16 1 3 2 2 6 14
7 6 4 3 5 25 3 2 2 3 3 13 4 3 2 3 4 16
6 8 6 4 3 27 2 2 1 4 1 10 25 3 5 151
1 2 1 5 2 3 2 1 1 9 2 2 3 6 9 22
2 3 1 3 9 3 5 6 4 3 21 2 3 1 3 4 13
6 5 2 4 3 20 3 2 1 1
7 2 2 3 2 1 10
1 3 2 1 7 3
5 4 2 148 8 5 2 1 24 2 2 3
1 8
1 1
2
6 4 102 1 4 7 13 3 7
3 1 4 2 10
1 2 1 1 2 7 2 1 2
1 6 1 1 12 5
1 23
2 2 3 73 2 1 1 1 8 1 2 2 1 1 7 2
3 5
1 1 2
1 1 1 4 73
2 5
12 15 18 15 16 76 14 28 21 37 25 125 35 44 42 53 75 249
5 1 2 8 1 5 4 414
2 1 7 10 20
3 7 1 5 6 22 3 6 3 4 1 17 5 4 5 6 5 25
4 4 6 5 2 21 3 5 2 4 2 16 2 4 4 2 6 18
4 4 3 2 2 15 1 1
3 2 7 2 4 4 3 5 18
8 7 4 19 3 2 6 3 2 16
1 2
3 3 2
1 1 7 2 4 3 3 4 16
4 4 8 4 5 1 5 2 1712
1 4 1 1 1 2 2 7 2 3 3
3 11
3 3 2 6 1 4 4 17 3 3 1
1 8
1 1 2 1 2 2 1 5 11
1 3 4
1 1 2 3 7
1 3 3 1 2 102
1 2 5 3 1 1 2 2 9
1 2 3 2 8
1 2 1 2 3 9
2 2 2 6 4 1 1
1 7
4 4 8
1 1 1
1 4
1 3 4
3 3
1 1 4 2 8

Figure 3-4. Changes in the Number of New Stores Opened by Business, Capital
Investment in New Stores per Store, Number of Stores (Cumulative) andRetail Floor Space per Store(Stores)250(Stores)
2,000

200

1,600

150

1,200

800

100

800

400

50

400

0

0

(Yen millions)Figure 3-4-1 All Stores (1,925 Stores) – Flow –2,000

Figure 3‑4‑2 All Stores (1,925 Stores) – Stock –Retail floor space of 1,500㎡ or greater

Retail floor space of 1,500㎡ or greater

Retail floor space of 500~1,500㎡

Retail floor space of 500~1,500㎡

1,600

Retail floor space less than 500㎡

Retail floor space less than 500㎡
Number of stores

Capital investment in new stores per store

1,200

Number of new stores opened (Right-hand scale)

0
80(Yen millions)

85

90

95

80

(Year)

3,000

Figure 3-4-3 General Supermarkets (1,012 Stores) – Flow – (Stores)
120

2,500

100

1,000

80

800

1,500

60

600

1,000

40

400

500

20

200

0

0

Retail floor space of 1,500㎡ or greater
Retail floor space of 500~1,500㎡
Retail floor space less than 500㎡
Capital investment in new stores per store
Number of new stores opened (Right-hand scale)

2,000

0
80

(Yen millions)

1,000

85

90

95

Figure 3-4-5 Specialty Supermarkets (913 Stores) – Flow –(Stores)
140

Retail floor space of 1,500㎡ or greater
Retail floor space of 500~1,500㎡

800

60

400

85

90

95

(Year)

Retail floor space of 1,500㎡ or greater
Retail floor space of 500~1,500㎡
Retail floor space less than 500㎡
Number of stores

600

80

(Year)

Figure 3-4-6 Specialty Supermarkets (1,012 Stores) – Stock –(Stores)
1,000

800

Number of new stores opened (Right-hand scale)

600

80

100

Capital investment in new stores per store

95

Retail floor space of 1,500㎡ or greater
Retail floor space of 500~1,500㎡
Retail floor space less than 500㎡
Number of stores

120

Retail floor space less than 500㎡

90

Figure 3-4-4 General Supermarkets (1,012 Stores) – Stock –(Stores)
1,200(Year)

85

400

40
200

200

20

0

0

0
80

Sources:

85

90

95

(Year)

80

85

90

95

(Year)The marketable securities reports of each company

Development Bank of Japan Research Report/No.14

31

Figure 3-5. Change Over Time in the Indices of Real Sales per
Store, by Business and by Time of Store Opening
Figure 3-5-1 All Stores (1,081 Stores)– Stores opened from 1980 through 1994 –

140
130

Figure 3-5-2 All Stores (844 Stores)– Stores opened from 1995 through 1998 –140(First year store is open = 100)

(First year store is open = 100)
130

120

120

110

Stores opened in 1995 (181)Stores opened in 1996 (218)Stores opened in 1997 (226)Stores opened in 1998 (219)110Stores opened from 1980 through 1984 (294)100Stores opened from 1985 through 1989 (306)100Stores opened from 1990 through 1994 (481)9090(Number of years passed since store opened)(Number of years passed since store opened)8080

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Figure 3-5-3 General Supermarkets (631 Stores)

Figure 3-5-4 General Supermarkets (381 Stores)– Stores opened from 1980 through 1994 –140– Stores opened from 1995 through 1998 –140(First year store is open = 100)

(First year store is open = 100)

130

130

120

120
110

110
100

Stores opened from 1980 through 1984 (218)Stores opened from 1985 through 1989 (181)Stores opened from 1990 through 1994 (232)90(Number of years passed since store opened)

80

Figure 3-5-6 Specialty Supermarkets (463 Stores)

Figure 3-5-5 General Supermarkets (450 Stores)– Stores opened from 1995 through 1998 –– Stores opened from 1980 through 1994 –

140

140
(First year store is open = 100)

(First year store is open = 100)

130

130

120

120

110

110
Stores opened from 1980 through 1984 (76)Stores opened from 1985 through 1989 (125)100Stores opened from 1990 through 1994 (249)Stores opened in 1995 (96)Stores opened in 1996 (116)Stores opened in 1997 (124)Stores opened in 1998 (127)90

90(Number of years passed since store opened)(Number of years passed since store opened)8080
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Sources:(Number of years passed since store opened)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19100

Stores opened in 1995 (85)Stores opened in 1996 (102)Stores opened in 1997 (102)Stores opened in 1998 (92)

100

90
80

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

The marketable securities reports for each company, and Cabinet Office “The Annual Report on the Consumer Price
Index”.

32 Development Bank of Japan Research Report/No.14

Figure 3-6. Breakdown of the Principal Causes of the Percentage Change in Real Sales
per Store Over Time after the Store Opened, by Business(％)

Figure 3-6-1 All Stores (1,706 Stores)

15Stores opened from 1980
through 1984
(294 stores)

10Stores opened from 1985
through 1989
(306 stores)

Stores opened in 1995 (181 stores)
Stores opened in 1996 (218 stores)
Stores opened in 1997 (226 stores)

Stores opened from 1990
through 1994
(481 stores)

50-5Retail floor space per store-10

Real sales per retail floor space
Percentage change in real sales per store-15(Number of years passed since store opened))
-20
1

3

5

7

9 11 13 15 17 19 1

(％)

3

5

7

9 11 13 15 17 19 1

3

5

7

9 11 13 15 17 19 1

3

5

2

4

1

3

5

Figure 3-6-2 General Supermarkets (920 Stores)

15Stores opened from1985 through 1989
(181 stores)

Stores opened from 1980
through 1984
(218 stores)

10Stores opened from1990 through 1994
(232 stores)

Stores opened in 1995 (85 stores)
Stores opened in 1996 (102 st ores)
Stores opened in 1997 (102 stores)

5
0
-5
-10

Retail floor space per store
Real sales per retail floor space-15

Percentage change in real sales per store(Number of years passed since store opened)

-20
1

3

5

7

9 11 13 15 17 19 1

(％)

3

5

7

9 11 13 15 17 19 1

3

5

7

9 11 13 15 17 19 1

3

5

2

4

1

3

5

Figure 3-6-3 Specialty Supermarkets (786 Stores)

15Stores opened from1985 through 1989
(125 stores)

Stores opened from1980 through 1984
(76 stores)

10Stores opened from1990 through 1994
(249 stores)

Stores opened in 1995 (96 stores)
Stores opened in 1996 (116 stores)
Stores opened in 1997 (124 stores)

5
0
-5
-10

Retail floor space per store
Real sales per retail floor space-15

Percentage change in real sales per store(Number of years passed since store opened)

-20
1

Note:
Sources:357

9 11 13 15 17 19 1

3

5

7

9 11 13 15 17 19 1

3

5

7

9 11 13 15 17 19 1

3

5

2

4

1

3

5

Excludes stores opened in 1998
Same as for Figure 3-5.

Development Bank of Japan Research Report/No.14

33

Figure 3-7. Change Over Time in the Tangible Fixed Asset Turnover Ratio, by Businessand by Time of Store Opening(Turns)Figure 3-7-1 All Stores (1,014 Stores)– Stores opened from 1980 through 1994 –12(Turns)

11

11

10

10

9

9

8

8

7

Figure 3-7-2 All Stores (833 Stores)– Stores opened from 1995 through 1998 –

127Stores opened from 1980
through 1984 (272 stores)
Stores opened from 1985
through 1989 (285 stores)
Stores opened from 1990
through 1994 (457 stores)

6
5
4
3

(Number of years passed since store opened)

2

Stores opened in 1995
(178 stores)
Stores opened in 1996
(212 stores)
Stores opened in 1997
(224 stores)
Stores opened in 1998
(219 stores)

6
5
4
3

(Number of years passed since store opened)

2
1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

Figure 3-7-3 General Supermarkets (580 Stores)(Turns)– Stores opened from 1980 through 1994 –

1

12

11

11

10

10

9

9

8

8

7

7
Stores opened from 1980
through 1984 (199 stores)
Stores opened from 1985
through 1989 (163 stores)
Stores opened from 1990
through 1994 (218 stores)

5
4
3(Number of years passed since store opened)

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

Figure 3-7-4 General Supermarkets (373 Stores)(Turns)1262– Stores opened from 1995 through 1998 –Stores opened in 1995
(84 stores)
Stores opened in 1996
(96 stores)
Stores opened in 1997
(101 stores)
Stores opened in 1998
(92 stores)

6
5
4
3

(Number of years passed since store opened)

2
1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

Figure 3-7-5 Specialty Supermarkets (434 Stores)– Stores opened from 1980 through 1994 –(Turns)
12

1

11
10

9

9

8

8

7

7

Stores opened from 1985 through 1989
(122 stores)
Stores opened from 1990 through 1994
(239 stores)

5
4
3(Number of years passed since store opened)

2

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

Figure 3-7-6 Specialty Supermarkets (460 Stores)– Stores opened from 1995 through 1998 –

1210Stores opened from 1980 through 1984
(73 stores)

3(Turns)11

62Stores opened in 1995
(94 stores)
Stores opened in 1996
(116 stores)
Stores opened in 1997
(123 stores)
Stores opened in 1998
(127 stores)

6
5
4
3

(Number of years passed since store opened)

2
1

2

Note:

Sources:

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

1

2

3

4

5

6

7

8

9 10 11 12 13 14 15 16 17 18 19

Tangible fixed asset turnover ratio = Nominal sales / the average of the beginning and end of period balances fortangible fixed assets (excluding land prices). For the calculation of the turnover ratio in the first year when a store
opened, the end of period balance was used.
Same as for Figure 3-4.

34 Development Bank of Japan Research Report/No.14

Figure 3-8. Change Over Time in Capital Spending per Store, by Businessand by Time of Store Opening (Excluding Land Prices)
Figure 3-8-1 All Stores(1,847 Stores, Including 431 Stores on Owned Land and 1,416 Stores on Leased Land)(Yen millions)
3,500

Stores opened from 1980
through 1984
(Land owned 59 stores)(Land leased 213 stores)

3,000
2,500

Stores opened from 1985
through 1989
(Land owned 60 stores)(Land leased 225 stores)

Stores opened from 1990
through 1994
(Land owned 125 stores)(land leased 332 stores)

Stores opened in 1995, 1996,
1997 and 1998
(Land owned 40, 54, 53, 40 stores)(Land leased 138, 158, 171, 179 stores)

Land owned

2,000Land leased

1,500
1,000
500
0
1

3

5 7

Stores opened from 1980
through 1984
(Land owned 47 stores)(Land leased 152 stores)

3,000
2,500

3 5

7

9 11 13 15 17 19 13

5 7

9 11 13 15 17 19 1 3 5 2 4 1 3 5 2 4(Number of years passed since store opened)

Figure 3-8-2 General Supermarkets(953 Stores, Including 241 Stores on Owned Land and 712 Stores on Leased Land)(Yen millions)
3,500

9 11 13 15 17 19 1

Stores opened from 1985
through 1989
(Land owned 37 stores)(Land leased 126 stores)

Stores opened from 1990
through 1994
(Land owned 67 stores)(land leased 151 stores)

Stores opened in 1995, 1996, 1997 and 1998
(Land owned 21, 30, 23, 16 stores)(Land leased 63, 66, 78, 76 stores)

Land owned
Land leased

2,000
1,500
1,000
500
0
1

3

5 7

Stores opened from 1980
through 1984
(Land owned 12 stores)(Land leased 61 stores)

3,000
2,500

3 5

7

9 11 13 15 17 19 13

5 7

9 11 13 15 17 19 1 3 5 2 4 1 3 5 2 4(Number of years passed since store opened)

Figure 3-8-3 Specialty Supermarkets(894 Stores, Including 190 Stores on Owned Land and 704 Stores on Leased Land)(Yen millions)
3,500

9 11 13 15 17 19 1

Stores opened from 1985
through 1989
(Land owned 23 stores)(Land leased 99 stores)

Stores opened from 1990
through 1994
(Land owned 58 stores)(land leased 181 stores)

2,000Stores opened in 1995,
1996, 1997 and 1998
(Land owned 19, 24, 30, 24 stores)(Land leased 75, 92, 93, 103 stores)

Land owned
Land leased

1,500
1,000
500
0
1

Sources:3

5 7

9 11 13 15 17 19 1

3 5

7

9 11 13 15 17 19 13

5 7

9 11 13 15 17 19 1 3 5 2 4 1 3 5 2 4(Number of years passed since store opened)

Same as for Figure 3-4.

Development Bank of Japan Research Report/No.14

35

Based on the analytical results using this panel data, looking just at supermarkets that
aggressively opened stores following deregulation in the 1990s we can detect a situation where
the store efficiency of newly-opened stores has not always been good. This is despite small
variations depending on the business or whether or not the land was owned at the time of store
opening. This must of course be determined more rigorously by tempering profitability bylooking at the profit of each store, not just those taken from marketable securities information.
But at the very least, the fact that stores opened in the 1990s were unable to follow the same path
to increased revenue after store opening as the stores opened in the 1980s suggests thatconditions have changed and a long-term customer pulling effect is difficult to anticipate. In
addition, the fact that after store efficiency is improved the time until the efficiency begins to
decline is much shorter indicates that stores are faced with a situation where they will have torethink their approach to store investment based on the premise of long-term investment
recovery.
In conclusion we can summarize the results of the analysis in the above three sections asfollows.
Based on the above analysis, the environment in which the retail industry finds itself has
become more severe as evidenced in the long-term trend in consumption demand viewed from amacro perspective. During the 1990s, demand in line with the industry’s expected growth rate
was never achieved. Add the timing of deregulation, and the 1990s can be seen as a period when
it was difficult for the retail industry to rapidly adjust its supply behavior in ways consistent withrealized demand. Nevertheless, as actual demand remains stagnant, the performance winners andlosses are gradually becoming clearer, not only among companies with differences in company
size or business conditions but even among companies faced with the same business conditions.
In addition, up until now retail industry capital spending had the effect of causing a trendlike rise in the capital coefficient while lowering capital efficiency. Looking just at supermarkets
that aggressively built new stores, we can also note that the efficiency of stores newly opened in
the wake of deregulation has not always been good. In this environment we expect that during
Fiscal 2000 and Fiscal 2001 the magnitude of swings in investment will grow larger because of
the stores built in the rush before enactment of the Large-Scale Retail Store Location Law andthe cutbacks in reaction to them. The likelihood is quite high that the move to the new law willbring with it short-sighted retail industry investment activity.
In the future it will be important to apply IT (information technology) as a tool to improve
the accuracy of consumption demand forecasts and the store sales multiplier effect. There will
also be an urgent need, however, to use the opportunity created by the enactment of the LargeScale Retail Store Location Law and its emphasis on regional and environmental protection toearnestly address the management issue of how to ensure the efficiency of new stores, when
greater consideration of a balance with urban planning or revitalization of central business
districts is demanded.
[Hiroaki Jindoh <hijindo@dbj.go.jp>,[Takahiro Igarashi <taigara@dbj.go.jp>]

36 Development Bank of Japan Research Report/No.14

(Supplement) Information Technology Investment in the Retail Industry and the Status
of Internet Sales– Results of the Development Bank of Japan’s Survey on Planned
Capital Spending Supplemental Survey (August 2000) –For its “Survey on Planned Capital Spending for Fiscal Years 1999, 2000 and 2001” conducted in August
2000, the Development Bank of Japan implemented for the first time a survey concerning
information technology investment trends (sent to 3,495 companies, with 1,763 firms returning
valid responses; a response rate of 50.4%). Because applications of IT (information technology)
with the principal goal of timely and appropriate understanding of consumers’ needs was
attracting attention at that time as the latest of recent activities in the retail industry, the bankconducted the survey by combining it with a supplemental survey concerning Internet sales inthe so-called “Business to Consumer” (B to C) electronic commerce marketplace as part of
information technology investment4.
The responses for actual and planned investment in information technology by the retailindustry in Fiscal 1999 and Fiscal 2000 are compiled in Supplemental Table 1. The responses forthe current status of Internet sales and the actual and planned investment for Fiscal 1999 andFiscal 2000 are compiled in Supplemental Table 2. The results of the survey are summarized
below.
c Information technology investment for the entire retail industry accounts for a less than
20% of all capital spending. Looked at in detail, the category “other companies” was thehighest, at slightly less than 30% in both fiscal years. This was primarily investment for new
or renewed POS and store controller technology by convenience chain stores, investment
attributed to system software development related to the above or installation of new multimedia terminals to handle electronic transactions. The percentage of information technology
investment is relatively large at departments stores, accounting for about 30% of planned
capital spending in Fiscal 2000 and almost 20% of actual investment in Fiscal 1999. This wasboosted by spending in areas such construction of in-house LAN or systems development,
and POS-related investment. Compared to the other two categories, supermarket
information technology investment is low. Behind this number, however, lie conditions thatmake it hard to grasp the investment in information technology at the time of store opening(it is difficult to provide an answer on information technology separate from the total store
investment). Added to this is the fact that in Fiscal 2000 store openings were front-loaded,
resulting in a lower plan percentage.
d Turning to the details of information technology investment, for the entire retail industry
the investment accounted for as tangible fixed assets ranges from 20% to a little more than
30%, the amount accounted for in intangible fixed assets ranges between 20% and 30%, andthe investments accounted for as leasing agreements or as expenses range from less than4

The supplemental survey targeted 260 firms in the retail industry excluding companies with capital of ¥1.0 billion or greater,which are mainly companies such as automobile dealers, which are the subject of capital spending surveys of the bank. The
survey asked the following questions concerning Internet sales (282 companies were covered by the survey on information
technology investment).
○ Please circle the number of the appropriate response concerning your Internet sales.
(1) Now selling via the Internet (2) Plan to begin Internet sales in the future (3) Have no plans now or in the future○ Please indicate how much of your information technology spending is investment related to Internet sales. Enter “0” (zero)
if you have no such investment.
Fiscal 1999 actual investment ¥millions
Fiscal 2000 planned investment ¥millions

Development Bank of Japan Research Report/No.14

37

40% up to 50% (of this amount, 49.6% of actual investment in Fiscal 1999 and 33.5% ofplanned investment in Fiscal 2000 is accounted for as lease agreements). Thus as a share ofcapital spending, the percentage of information technology investment accounted for as
tangible fixed assets (= IT ratio) is low at 3.6% of real capital spending in Fiscal 1999 and5.6% of planned capital spending in Fiscal 2000. For department stores and supermarkets,
the share of real capital spending in Fiscal 1999 accounted for by leasing agreements washigh (58.4% for department stores and 63.6% for supermarkets), a reflection of POS-related
investment and the introduction of stocking and inventory control systems and terminals tohandle debit cards. For planned information technology investment in Fiscal 2000, thepercentage of spending to build in-house LAN and introduce software for product control,
debit card systems and POS-related functions accounted for as intangible fixed assets is high(40.5% at department stores and 35.3% at supermarkets). At other retail stores, thepercentage of planned information technology investment in Fiscal 2000 that will be
accounted for as tangible fixed assets will exceed 40%, which is attributed to spending suchas new installations of multi-media terminals to handle electronic commerce at convenience
stores.
e Comparing the percentage change for information technology investment and for capitalspending excluding information technology investment (referred to below as “store
investment”) for Fiscal 2000/Fiscal 1999, for the retail industry as a whole the growth rate
for the latter category will exceed that of the former. Looked at by business, at department
stores the squeeze on store investment will lead to a rise in investment in information
technology. At supermarkets, store openings are front-loaded and store investment will
increase broadly, while the investment in information technology will decline. Other retailers
are planning to increase the growth rate of investment in information technology higher
than the growth of store investment. So differences are appearing in the respective
investment activities.
f With regard to the current status of Internet sales, more than 30% of all retail industry
companies that responded indicated they are “now selling via the Internet”, and this climbed
to 57.3% when combined with the companies that indicated they “plan to begin Internet
sales in the future”. More than 40% of the companies that responded indicated they “haveno plans now or in the future” (including companies that are studying the issue now oranswered unclearly). A high percentage of department stores responded they are “nowselling via the Internet”, and this reached 78.7% when combined with the department storesthat indicated they “plan to begin Internet sales in the future”. In contrast, the percentage ofsupermarkets that indicated they are “now selling via the Internet” was low, while thepercentage of supermarkets that indicated they “have no plans now or in the future” wasgreater than 50%.
g When we inquired about each company’s current Internet sales activities,(1) At department stores, where the percentage of “now selling via the Internet” responses
was high, the earliest companies started selling from around 1995 in ways that werereflexive in cases where they limited selling to just their own company’s original goods.
In the current situation, however, Internet sales are minimal and are less than 0.1% of
total sales and amounts only to practically handling New Year’s or the mid-summer gifts.
Cases of companies that open stores in a virtual shopping center rather than build
Internet sales at their own expense can also occasionally be seen, corroborating thereaction. This also includes cases of department stores that tried and then halted suchsales at a number of stores from the standpoint of cost-effectiveness, because of having
to regularly renew the information on the website.
38 Development Bank of Japan Research Report/No.14

(2) At supermarkets, where the percentage responding “now selling via the Internet” waslow, the time since the startup time is short and in many cases stores began
experimentally using existing products or gift products, or stop at introducing local
products without moving on to full-fledged development. We can also see cases where
there is a broad difference in site access depending upon the products, where stores areworking hard at website maintenance. As reasons the percentage of “have no plans now
or in the future” responses was high, we can point to the difficulties of Internet sales
activity arising from food supermarkets business characteristics, the initial lack of mailorder sales know-how, the difficulty of projecting profitability for Internet sales aimed
at customers who do not come to a store, the lack of urgency even when studying theissue internally, and the fact that it is not a specific issue for study at the present time. In
addition, there are also efforts to find an approach not as a company alone but for agroup as a means of spreading the risk.
(3) In addition to the above there are numerous cases where convenience stores, catalog
mail-order companies, home centers, and consumer appliance and electronic massmerchandisers have just begun their efforts, and at this point in time evaluation of
actual performance is difficult. If there are cases of companies grabbing a good lead byhandling products such as books, CDs and DVDs, which come near to being Internet
sales specialty industries, then among the consumer appliance and electronics massmerchandisers that entered the market comparatively early there are also cases wherecompanies compete with their own stores even if they have inquiries from customers inareas where they have no stores, just as seen in the phenomenon of opening many
stores all at one and seeing sales decline. As with supermarkets, we also can observe
cases where companies will not “go it alone” but will tackle the issue in a group. In
addition, a comparatively high number of companies in cooperatives and the restaurant
industry responded “have no plans now or in the future”, including now studying
Internet issues inside the company.
h Investment related to Internet sales by the retail industry as a whole (referred to below as“direct sales”) will expand sharply by 11.7 times from ¥1.4 billion in Fiscal 1999 to a planned
amount of ¥15.9 billion in Fiscal 2000. The percentage of investment in direct sales as ashare of information technology investment is planned to increase from 2.3% of actual
investment in Fiscal 1999 to 19.8% in Fiscal 2000. The main factor is full-fledged investment
for direct sales by convenience stores. The percentage at other businesses will remain small.
Looking just at the results of the recent supplemental survey, efforts are being made toaddress information technology investment in the retail industry but we can find differences
when we examine this activity by business. For Internet direct sales in particular, overall the retailindustry is at the beginning stage and it is still too early at this point in time to make a decision
regarding its success or failure.
With regard to the issues of whether the investment by the retail industry in information
technology that we have confirmed here will increase industry growth prospects by improving
forecasting accuracy for consumption demand or increasing productivity at companies that
aggressively invest in information technology, whether Internet sales can bring greater store sales
and have a multiplier effect, and especially whether the convenience stores that grew so rapidly inthe past can again begin to take a path to growth by entering the Internet market, all will require
the accumulation and investigation of more data and are topics to address in the future.

Development Bank of Japan Research Report/No.14

39

Supplemental Table 1 Actual and Planned Investment in Information Technology by the
Retail Industry in Fiscal 1999 and Fiscal 2000
(1) 136 companies responding in Fiscal 1999 and Fiscal 2000 (Out of 282 companies; 48.2%
response rate)(Unit: Yen millions, %)Fiscal 1999 actual investment
Number ofcompanies
Retail industry

Capitalspending
A

Fiscal 2000 planned investment

Information technology
Number ofinvestmentcompanies
B
B/A

Capitalspending
A

Information technology
investment
B

B/A

136

441,957

78,83417.8

136568,71394,086

16.5

Department stores

28

63,663

11,87318.6

2853,511

14,158

26.5

Supermarkets

36

210,895

19,1339.1

36296,297

15,114

5.1

Other

72

167,399

47,82828.6

72218,905

64,814

29.6

Note:

Capital spending = Investment accounted for in tangible fixed assets – the purchase of land.

(2) Details of Information Technology Investment in Fiscal 1999 and Fiscal 2000
(Unit: Yen millions, %)Fiscal 1999 actual investment

Fiscal 2000 planned investment

Information technology investment
B

Tangible
Intangible
fixed assets fixed assets

Information technology investment
Leased or
expensed

D

Tangible
Intangible
fixed assets fixed assets

Leased or
expensed

Retail industry

78,834

15,737

18,84644,251

94,086

31,62026,47435,992Composition

100.0

20.0

23.9

56.1

100.0

33.6

28.1

38.3

(IT ratio)

(3.6)

(5.6)

Department stores

11,873

788

2,629

8,456

14,158

979

5,733

7,446

Composition

100.0

6.6

22.1

71.2

100.0

6.9

40.5

52.6

(IT ratio)

(1.2)

(0.9)

Supermarkets

19,133

2,208

3,291

13,634

15,114

2,799

5,329

6,986

Composition

100.0

11.5

17.2

71.3

100.0

18.5

35.3

46.2

(IT ratio)

(1.0)

Other
Composition(IT ratio)
Note:

(0.9)

47,82812,741

12,92622,16164,814

27,842

15,412

21,560

100.0

26.6

27.0

46.3

100.0

43.0

23.8

33.3

(7.6)

(12.7)

Information technology (IT) ratio = The share of information technology investment accounted for as tangible
fixed assets/capital spending * 100.

40 Development Bank of Japan Research Report/No.14

(3) Percentage Change in Information Technology Investment and the Trend in Capital
Spending Excluding Information Technology Investment(Unit: Y millions, %)Capital spending excluding
information technology investment

2000/1999 percentage change

Total
Retail industry

Department stores

Supermarkets

Other
Note:

Tangible
Intangible
fixed assets fixed assets

Leased or
expensed

Fiscal 1999
E

Fiscal 2000
F

2000/1999
Percentagechange

19.3

100.9

40.5

▲18.7

426,220537,093

26.0

19.2

24.2

118.1

▲11.9

62,87552,532

▲16.5

▲21.0

26.8

61.9

▲48.8

208,687

293,498

40.6

35.5

118.5

19.2

▲2.7

154,658

191,063

23.5

B/E
D/F
18.5
17.5
18.9
27.0
9.2
5.1
30.9
33.9

Capital spending excluding information technology investment = Capital spending – the information technology
investment that is accounted for as intangible fixed assets

Development Bank of Japan Research Report/No.14

41

Supplemental Table 2 Current Status of Internet Sales and Actual and Planned
Investment in Fiscal 1999 and Fiscal 2000
(1) 157 Companies that Responded Concerning the Status of their Internet Sales (Out of 260
companies; 60.4% response rate)(Unit: Companies, %)Number ofcompanies

Number of companies

Component ratio

Havecompleted

Plan toinvestNo plansHavecompleted

Plan to invest

No plans

157

52

38

67

33.1

24.2

42.7

Department stores

33

18

8

7

54.5

24.2

21.2

Supermarkets

45

9

11

25

20.0

24.4

55.6

Other

79

25

19

35

31.6

24.1

44.3

Retail industry

Note:“Have no plans” also includes companies that are now studying or answered unclearly.

(2) 112 Companies that Provided an Answer Concerning Information Technology Investment(Out of 260 companies; 43.1% response rate)(Unit: Yen millions, %)Fiscal 1999 actual
Number ofcompanies

Information
technology
investment
G

112

Department stores

Fiscal 2000 plan

Investment related toInternet sales

Number ofcompanies

Information Investment related totechnology
Internet sales
investment
K
K/I
I

H

H/G

59,846

1,352

2.3

112

80,241

15,86219.8

24

10,978

253

2.3

24

12,841430

3.3Supermarkets

29

14,283

23

0.2

29

11,329

195

1.7

Other

59

34,585

1,076

3.1

59

56,071

15,237

27.2

Retail industry

42 Development Bank of Japan Research Report/No.14

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44 Development Bank of Japan Research Report/No.14

List of Back Numbers (Including JDB Research Report)
No.14

Consumption Demand Trends and the Structure of Supply: Focus on Retail Industry Supply Behavior(This Issue)

No.13

Recent Trends in the Japanese Economy: Weakness of Current Economic Recovery and Its Background,
March 2001

No.12

Empirical Reassessment of Japanese Corporate Investment Behavior: Features and Changes since the 1980s,
based on Micro-level Panel Data, March 2001

No.11

Survey on Planned Capital Spending for Fiscal Year 1999, 2000 and 2001, October 2000

No.10

Job Creation and Job Destruction in Japan, 1978-1998: An Empirical Analysis Based on Enterprise Data,
September 2000

No.9

Recent Trends in the Japanese Economy: Information Technology and the Economy, September 2000

No.8

Trend of International Reorganization Affecting the Japanese Automobile and Auto Parts Industries, June
2000

No.7

Survey on Planned Capital Spending for Fiscal Years 1999 and 2000, May 2000

No.6

Current Status and Future Perspective of the Japanese Remediation Industry: Technology and Market for
Underground Remediation, May 2000

No.5

Recent Trends in the Japanese Economy: The 1990s in Retrospect, March 2000

No.4

Destabilized Consumption and the Post-bubble Consumer Environment, February 2000

No.3

The Slump in Plant and Equipment Investment in the 1990s: Focusing on Lowered Expectations, the Debt
Burden and Other Structural Factors, January 2000

No.2

Survey on Planned Capital Spending for Fiscal Years 1998, 1999 and 2000, November 1999

No.1

Corporate Strategies in Japan’s Semiconductor Industry: Implications of Development in Other AsianCountries, November 1999

JDB Research Report
No.96

Recent Trends in the Japanese Economy: Focused on Fixed Investment and Capital Stock, August 1999

No.95

Efforts to Protect the Natural Environment in the United States and Germany: Environmental Mitigation
and Biotope Conservation, July 1999

No.94

Survey on Planned Capital Spending for Fiscal Years 1998 and 1999, June 1999

No.93

Towards the realization of ‘environmental partnership’: A survey of Japan’s environmental NPO sector
through comparison with Germany, June 1999

No.92

The Impact of Demographic Changes on Consumption and Savings, March 1999

No.91

Recent Research and Development Trends in Japanese Enterprises: Technology Fusion, March 1999

No.90

Recent Trends in the Japanese Economy: Prolonged Balance Sheet Adjustment, January 1999

No.89

Impact of Asset Price Fluctuations on Household and Corporate Behavior: A Comparison between Japanand the U.S., December 1998

No.88

Survey on Planned Capital Spending for Fiscal Years 1997, 1998, and 1999, December 1998

No.87

Foreign Exchange Rate Fluctuations and Changes in the Input-Output Structure, November 1998

No.86

Structural Changes in Unemployment of Japan: An Approach from Labor Flow, November 1998

No.85

Recent Trends in the Japanese Economy: Characteristics of the Current Recession, August 1998

No.84

R&D Stock and Trade Structure in Japan, August 1998

No.83

Survey on Planned Capital Spending for Fiscal Years 1997 and 1998, August 1998

No.82

The Significance, Potential, and Problems of DNA Analysis Research: Establishing Public Acceptance isEssential, May 1998

No.81

The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996, 1997 and 1998
Conducted in August 1997, March 1998

No.80

Recent Trends in the Japanese Economy: Growth Base of the Japanese Economy, January 1998

No.79

Information Appliances: The Strength of Japanese Companies and Tasks for the Future, January 1998

No.78

Challenges and Outlook for the Japanese Machinery Industries: Impact of ISO14000 Series andEnvironmental Cost, January 1998

No.77

Current Conditions and Issues of Computerization in the Health Care Industry : For the Construction of a
Health Care Information Network, January 1998

No.76

Household Consumption and Saving in Japan, December 1997

No.75

The Direction of Japanese Distribution System Reforms: Strengthening the Infrastructure to Support
Diverse Consumer Choices, November 1997

No.74

Foreign Direct Investments by Japanese Manufacturing Industries and Their Effects on International Trade,
October 1997

No.73

The Impact of the Changing Trade Structure on the Japanese Economy: With Special Focus on the Effects
on Productivity and Employment, October 1997

No.72

An Analysis of Foreign Direct Investment and Foreign Affiliates in Japan, August 1997

No.71

Recent Trends in the Japanese Economy: Stock Replacement and New Demand as Aspects of Economic
Recovery, August 1997

No. 70 Corporate Fundraising : An International Comparison, June 1997
No. 69 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in February 1997, May 1997
No. 68 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1996 and 1997
Conducted in August 1996, August 1997
No. 67 An International Comparison of Corporate Investment Behavior: Empirical Analysis Using Firm Datefrom Japan, France and the US, April 1997
No. 66 Housing in the National Capital: Analysis of the Market for Housing using Micro Data, March 1997
No. 65 The Environment for Locating Business Operations in Major East Asian Cities, January 1997
No. 64 Direction of Reconstruction of Business Strategy in the Chemical Industry, January 1997
No. 63 Reflection on Discussions Concerning Regulation of the Electric Power Industry: Deregulation of theElectric Power Industry in Japan and Implication of Experiences in the United States, December 1996
No. 62 Current Status and Future Perspective of the Japanese Semiconductor Industry, November 1996
No. 61 A Breakthrough for the Japanese Software Industry?: Responsiveness to Users’ Needs is the key, October
1996
No. 60 Recent Trends in the Japanese Economy Focusing on the Characteristics and Sustainability of the Current
Economic Recovery, September 1996

No. 59 Analysis of the Primary Causes and Economic Effects of Information: Related investment in the UnitedStates and Trends in Japan, August 1996
No. 58 Selected Summaries of Research Reports: Published in FY 1995, June 1996
No. 57 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1995 and 1996
Conducted in February 1996, May 1996
No. 56 Recent Trends in the Japanese Economy, May 1996
No. 55 Issues Concerning the Competitiveness of the Japanese Steel Industry, February 1996
No. 54 Changes in the Financial Environment and the Real Economy, January 1996
No. 53 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994, 1995 and 1996
Conducted in August 1995, October 1995
No. 52 Current Economic Trends: Focusing on the Appreciation of the Yen and its Effects, October 1995
No. 51 Problems Concerning the International Competitiveness of the Petrochemical Industry, October 1995
No. 50 An Economic Approach to International Competitiveness, October 1995
No. 49 Selected Summaries of Research Reports Published in FY 1994, July 1995
No. 48 Strategies for Improving the Efficiency of the Japanese Physical Distribution System: Part2, July 1995
No. 47 Issues on International Competitive Strength of the Auto Industry, June 1995
No. 46 Problems Concerning the International Competitiveness of the Electronics and Electric Machinery
Industry, June 1995
No. 45 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1994 and 1995
Conducted in March 1995, June 1995
No. 44 Strategies for Improving the Efficiency of the Japanese Physical Distribution System, March 1995
No. 43 Capital Spending Recovery Scenario Cycle and Structure, August 1994
No. 42 Progress of International Joint Development between Industrialized Countries on the Private Level, May
1994
No. 41 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993, 1994 and 1995
Conducted in August 1994 , November 1994
No. 40 Selected Summaries of Research Reports Published in FY 1993, June 1994
No. 39 Recent Trends in Japan’s Foreign Accounts, April 1994
No. 38 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1993 and 1994
Conducted in March 1994, April 1994
No. 37 Economic Zones and East Asia Prospect for Economic Activity Oriented Market Integration, December
1993
No. 36 Japanese Corporate Responses to Global Environmental Issues, December 1993
No. 35 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992, 1993 and 1994
Conducted in August 1993, September 1993
No. 34 Structure of Profit to Capital in the Manufacturing Industry, September 1993
No. 33 Comparison of the Japanese and The U.S. Labor Markets, October 1992
No. 32 The Relative Competitiveness of U.S., German, and Japanese Manufacturing, March 1993
No. 31 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1992 and 1993
Conducted in March 1993, April 1993

No. 30 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991, 1992 and 1993
Conducted in August 1992, December 1992
No. 29 Flow of Funds in the 80s and Future Corporate Finance in Japan, November 1992
No. 28 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1991 and 1992
Conducted in February 1992, April 1992
No. 27 An Analysis of Foreign Direct Investment in Japan, March 1992
No. 26 Projection of Japan's Trade Surplus in 1995: Analysis of Japan's Trade Structure in the 80s, February 1992
No. 25 Intra-Industry Trade and Dynamic Development of The World Economy, November 1991
No. 24 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990, 1991 and 1992
Conducted in August 1991, September 1991
No. 23 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1990 and 1991
Conducted in February 1991, March 1991
No. 22 Trends of the Petrochemical Industry and its Marketplace in East Asia, March 1991
No. 21 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989, 1990 and 1991
Conducted in August1990,September 1990
No. 20 Deepening Economic Linkages in The Pacific Basin Region: Trade, Foreign Direct Investment andTechnology, September 1990
No. 19 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1989 and 1990
Conducted in February 1990, March 1990
No. 18 Petrochemicals In Japan, The US, and Korea an Assessment of Economic Efficiency, February 1990
No. 17 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1988, 1989 and 1990
Conducted in August 1989, October 1989
No. 16 Impact of the EC Unification on Japan’s Automobile and Electronics Industries, August 1989
No. 15 Industrial and Trade Structures and the International Competitiveness of Asia’s Newly Industrializing
Economies, August 1989
No. 14 The Japan Development Bank Reports on Capital Investment Spending: Survey for Fiscal Years 1988 and1989 Conducted in February 1989, March 1989
No. 13 The Japan Development Bank Reports on Capital Spending: Survey for Fiscal Years 1987, 1988 and 1989
Conducted in August 1988, September 1988
No. 12 Growing Foreign Investors’ Activities and the Future of Internationalization, September 1988
No. 11 Futures Tasks and Prospects for the Japanese Machine-Tool Industry, July 1988
No. 10 International Division of Labor in the Machine Industries Among Japan, Asia’s NICs and ASEANCountries, June 1988
No. 9

Trends of the Petrochemical Industry and its Marketplace in East Asia around Japan, May 1988

No. 8

The International Competitiveness of Japan and U.S. in High Technology Industries, April 1988

No. 7

The Japan Development Bank Reports on Private Fixed Investment in Japan, March 1988

No. 6

Economic Projections of the Japan’s Economy to the Year 2000, February 1988

No. 5

The Japan Development Bank Reports on Private Fixed Investment in Japan, September 1987

No. 4

Current Trends in the Japanese Auto Parts Industry in Overseas Production, July 1987

No. 3

Current Moves for Foreign Direct Investment into Japan, May 1987

No. 2

Overseas Direct Investments by Japanese Corporations, May 1987

No. 1

Current U.S. Consumption Trends, May 1987