Japanese drugstores remodel ahead of consumption tax hike
Japan’s drugstore operators are remodelling stores ahead of the increase in consumption tax in April 2014
Japan’s drugstore operators are remodelling stores as they hope to retain customer loyalty and store traffic after an increase in consumption tax, Japan’s equivalent of the UK’s VAT, in April 2014.
Drugstore giant Matsumotokiyoshi Holdings Co., the market leader, will upgrade 120 stores this fiscal year, expanding space set aside for both cosmetics and pharmaceuticals at urban locations. More stores will get in-store pharmacies, while processed foods and beverage offerings will be increasingly geared towards elderly customers.
Fellow drugstore operator Cocokara Fine will remodel 107 stores, up 170% from 2012. Meanwhile, Sundrug and CFS Corp. are also expected to increase their range of food products as well as improving cosmetic displays.
The planned increase in the 5% consumption tax to 8% in April could reduce consumer spending by ¥3.4 trillion, according to the Nippon Life Insurance Research Institute. The tax has only been raised once before, in April 1997, from 3% to 5%.