More than a month after the earthquake and tsunami that shook Japan to its core, retailers are still feeling the impact.

Aside from the stores directly hit by the natural disasters in the northeast of the country, temporary store closures, or curtailed opening hours, are still in force across the country through a combination of power shortages, supply issues and public safety concerns, exacerbated by the prolonged nuclear crisis.

Seven & I, operator of department stores, supermarkets and the 7-Eleven convenience chain in the country, expects its earnings to drop 22% this fiscal year, while revenue is forecast to fall 10%. President Noritoshi Murata said: “We expect the quake will strip ¥38.1bn (£274m) from our operating profit.”

Seven & I forecasts a special loss of ¥26bn (£187m) to reflect costs for earthquake-damaged stores. Some 600 of the company’s 13,200 domestic 7-Eleven stores closed after the earthquake, with 60 remaining shut. The company said 100 of its 170 York-Benimaru grocery stores, mainly in northern Japan, closed temporarily.

Unsurprisingly, sales at Japan’s non-food retailers have fared no better. As the rest of the world has seen queues forming outside electronics stores in anticipation of the iPad 2 release, in Japan queues have formed with people hoping to buy batteries for torches to be used during the regular power shortages. Japanese electronics retailer and market leader Yamada Denki’s latest update on its position following the earthquake shows 10 stores remain closed in the Fukushima, Chiba and Miyagi areas.

Yamada Denki chairman Noboru Yamada has provided the country with a much-needed boost, however, announcing plans to open about 150 stores in the year to March 2012. Yamada said the figure included small stores of about 10,800 sq ft in northeast Japan. Yamada believes that a drop in demand in the weeks following the earthquake will be offset by consumers replacing damaged or destroyed electrical goods in the coming months.

A lack of availability of certain electronics components from Japan is likely to hit global electronics production and supply for many months. Production in China is expected to be impacted, with Japan accounting for about 14% of the country’s imports. Longer term, it seems likely electronics giants will look to diversify their sources of component supply, further threatening Japan’s recovery.

Matthew Stych, research director, Planet Retail. For more information contact us on:

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