What: Even though department stores are recuperating from the pandemic, they are still losing steam in a country where they used to be at the centre of retail.

Why it is important: just like in other markets, it is all about right-sizing rather than extinction.

Department stores in Japan, once known as "the kings of retailing", have been gradually closing down, especially in rural areas. Shimane Prefecture recently lost its last department store, Ichibata Department Store, after 65 years in business, becoming the third prefecture with no department stores, along with Yamagata and Tokushima.

The COVID-19 pandemic exacerbated the challenges faced by department stores, which were already struggling with declining customer traffic due to Japan's aging population, the  rise of online shopping, and competition from large shopping mall. With 17 prefectures currently having only one department store, the number of prefectures without department stores is expected to increase. Gifu Takashimaya, the only department store in Gifu Prefecture, will close on July 31, bringing the total to four prefectures.

Some department stores are seeking external help to survive. Saga Tamaya, the sole department store in Saga Prefecture, has transferred its operations to a Kyoto-based real estate company to secure funding for renovations and diversify its business. While department stores in urban areas like Tokyo have seen a gradual recovery in customer traffic and sales since the pandemic, stores in rural regions, particularly in the

Tohoku, Chugoku, and Shikoku regions, continue to face difficulties.

Japan: more prefectures losing department stores even amid pandemic recovery