GINZA SIX announced "December 2021 was the best single month for sales since we opened". GINZA SIX is one of the most popular commercial complexes in Japan, opened in 2017 in Tokyo's high-end shopping street Ginza.
In January 2021, a headline appeared in a web media, "Ginza's Largest Commercial Complex 'Ginza Six' Close Tenants Massively," it reported that 14 tenants had pulled out of the complex simultaneously due to the COVID pandemic. Major media outlets followed suit, and the story became a hot topic on social networks.
At the time, there was a lot of speculation on social media and among retail industry insiders that the store's aim to attract "inbound" (foreign visitor) customers had failed, and that the store had replaced brands that accounted for a large proportion of "inbound" sales.
Swelling high-income 20s customers
Shortly afterwards, the complex's operator announced that it would replace around 40 tenants by spring 2021 in its first major renewal since opening in April 2017.
While the "mass closures" are true, the company explained that the replacement of tenants was planned to coincide with the expiration of many tenants' four-year contracts. The company's spokesperson was busy trying to quash the reports, saying that it was not due to the effects of the COVID19.
In fact, sales at Ginza Six continued to struggle until the first half of fiscal 2021.
The ratio of "inbound" sales to total sales before the COVID19 was about 30%, but in fiscal 2020 sales plummeted as "inbound" sales evaporated and domestic customers refrained from going out for long periods. In the following year, fiscal 2021, the company continued to shorten its business hours, and sales for the period from March to August of that year were 30% lower than for the same period in fiscal 2019.
However, sales started to recover: in October and November 2021 they were almost the same as in the same months of 2019, and in December they reached a record high, surpassing those of two years earlier.
The recovery in sales has been driven by consumption of luxury goods, such as foreign luxury brands and luxury watches. This is due to the fact that the wealthy in Japan, who have lost what to spend their money on due to travel restrictions and refraining from going out caused by the COVID19, are now spending more.
In particular, sales from high-income people in their 20s, such as business executives and employees of multinational companies, are growing faster than expected. Before the COVID19, sales by people in their twenties accounted for around 10% of total sales, but it has now increased to 20%.
In addition to high-priced goods, restaurants and grocery shops, which have been opened since 2021, have also contributed to the increase in sales. Although the number of visitors to the shop is still lower than in the pre-COVID period, the amount spent per customer between September and December 2021 increased by 22% compared to the same period in 2019.
Not intended to target foreign visitors
Ginza Six is often seen as the symbol of "inbound" consumption in Tokyo. However, the complex's operator is skeptical about this perception and explained, "there are many luxury brands among the tenants, and the location in Ginza attracts many foreign visitors, so as a result the percentage of "inbound" customers is high, but we have never specifically targeted "inbound" tenants for leasing".
A major renovation of the store in 2021 have seen it attract tenants such as fragrance brands, for which physical shops have an advantage over e-commerce (online shopping). In addition, in response to the rising proportion of younger customers, the company has aggressively introduced brands targeting the so-called "Generation Z".
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