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Baseball Champs Spur Big Business for Local Stores

November 22, 1999

Big sales celebrating the victories of the champions of Japan's two pro baseball leagues, the Pacific and the Central, are becoming an annual autumn event. Stores affiliated with the teams or operating in their hometowns drastically slash the prices of many of their wares, and some shops ring up three times their usual takings. The sales give consumers a chance to enjoy shopping for the latest autumn and winter items in a festive atmosphere at bargain prices, and the stores an opportunity to stimulate the shopping appetites of their customers. The ultimate key to recovery in the flat retail market, however, may lie in the extent to which businesses are able to keep consumers coming to the stores after the sales are finished.

Victory Equals Big Bucks
On September 26, 1999, a day after the Fukuoka Daiei Hawks clinched the Pacific League championship for the first time since the team's founding 11 years ago, Daiei Inc.--the major retail and supermarket enterprise that owns the team--held a four-day sale. Takings from the company's grocery business alone reached 52 billion yen (around 495 million dollars at 105 yen to the dollar), close to three times average sales figures and far exceeding the double amount they had forecasted. The stores cut the prices of most goods from 10% to 20%. In addition, they also slashed the prices of select clothing items to exceptionally low prices ranging from 100 yen to 300 yen (0.95 dollars to 2.85 dollars). Although the stores prepared enough stock of these items for 1,000 customers per day, the sale was such an overwhelming success that the goods sold out each day in less than an hour. And in Kyushu's Fukuoka Prefecture, where the team is based, the victory sale generated 14.6 billion yen (139 million dollars) worth of business to the local economy and a ripple effect of an additional 24.6 billion yen (234 million dollars). The prefecture estimates the pennant boom pumped up its gross domestic product by 0.14%.

Similar activity was also seen in Nagoya, home of the Chunichi Dragons, who won the Central League championship after an 11-year draught. One major local department store reduced select designer-brand bags to around half price; the bags were all snatched up within some 30 seconds after the store opened its doors. Together, those shops offering sales realized combined receipts of close to double their average.

The two teams squared off against one another in the Japan Series, which began October 23, to determine the country's pro baseball champion. Commemorative and celebratory sales in support of both sides were held once again, further adding to the shopping bedlam.

Post-Sale Strategy Key to Success
These sales that perk the interest of consumers are actually part of sellers' overall business strategy. Discount sales are usually held in January and July to clear out items left over from the winter and summer buying rushes. Victory celebration sales, however, are not off-season bargain-hunting opportunities, but the first stage of stores' annual business strategy to move their goods. Early on, these outlets negotiate with wholesalers and manufacturers to buy new fall and winter items at low cost, which they in turn sell at a discount. The hope of these shops is that momentum from these sales will carry over into their post-sale business.

Victory sales are also events in themselves, where customers can indulge in bargain shopping in a festive environment. In 1998, when the Yokohama Bay Stars captured their first title in 38 years, one local department store that celebrated with a victory sale drew its largest single-day number of customers in 40 years of business. And such sales are not limited to the winners in league play--companies tied to losing teams, too, often hold sales to thank fans for their support. Today, baseball sales have become annual events that spell fun for consumers, profit for businesses, and a P.R. boost for the regions in which the teams are based.

In spite of the immediate success of these sales, however, the post-sale buying habits of consumers remain in caution mode. With the economy still not yet back on its feet, the employment picture grim, and a cloud of uncertainty looming over the future, consumers are maintaining a tight grasp on their wallets. Since mid-1998 consumption by single-person households, which comprise mainly young people and the elderly, has increased over the same period the previous year. Purchases by households consisting of two or more persons, however, by far the bigger category, continue to decline.

Many stores fear that sales will regress into a slump after the sale events wind down. For businesses, therefore, the big question is how to turn those who took advantage of the victory bargains into repeat customers.

Trends in JapanEdited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.