TOKYO -- Coronavirus infections are not showing signs of dwindling, and consumers are becoming more economical because of uncertainty about the future. Apparel retailers are struggling with poor sales across the board. Nikkei asked Tadashi Yanai, chairman and CEO of Fast Retailing, the operator of the Uniqlo casualwear chain, about what the consumption environment will be like in 2021. Excerpts from the interview follow.
Q: As consumer confidence falls amid the third wave of coronavirus infections, you will cut clothing prices at your affiliated GU brand.
A: We see steady growth in the numbers of people out of work, employees on leave and people obliged to stay home. People feel anxieties about the future, so we will be thinking of their anxieties. Consumers are very sensitive to prices, more than they were during the crisis following the Lehman Brothers collapse. We cannot raise prices in such a situation. If we raise the prices of ordinary goods, they simply will not sell.
China and Southeast Asia will drive consumer spending, but the situation of coronavirus infections varies by country. For example, consumer spending is stagnant in Malaysia, Indonesia and the Philippines -- Asian countries with serious infection conditions -- but Taiwan and Vietnam, which have controlled the coronavirus, are enjoying firm spending. Unless infections stop growing, spending recovery will be difficult.
Q: How do you see the world after the coronavirus pandemic dies down?
A: In and after 2021, Asia will be the center of the world, as expected. Suits originated in Europe. Asia, on the other hand, is an emerging market where there are many factors that allow casual everyday clothes to be accepted. We want to become a global brand as the best clothing brand for the first time, starting with Asia.
Q: What are the things that countries can do to ease anxiety?
A: As a result of continued monetary easing, rich people have become richer with rising stock prices. However, money has not gone to the poor people who are truly in need of support. First, we want governments to be more reliable for the people.
Q: In the near term, consumers are likely to become more selective.
A: In Japan, the third wave of infections is having a major negative impact on sales. There are particularly large sales declines on Saturdays and Sundays because consumers have come to avoid going out on holidays. However, people do go shopping in areas near their homes. Uniqlo stores in the centers of big cities are all performing poorly, but those in suburban areas are thriving.
As people economize, the quality of brands and products will be more important. Consumers will select reliable, truly good brands. In the meantime, [with growing demand for casual clothing and the spread of telework], the days of suits have come to an end and the days of everyday wear have begun. I want to make the ultimate everyday clothes. People will select clothes that are comfortable to wear as working clothes as well as in their homes, and that last long and can be worn in various combinations. There will be no need for clothes that are worn for a year and then are discarded.
Q: Amazon of the U.S. is also placing emphasis on fashion.
A: Retail businesses with physical stores will not disappear. IT companies want information from businesses with physical stores. We cannot know consumers' reactions to goods and their feelings about goods unless we directly ask consumers. So a lot of IT companies are acquiring retail businesses operating physical stores.
Consumers are now thinking that there is no difference between purchases at physical stores and purchases via online sites. In the future, they may come to check clothes and talk with clerks through the internet. We want to provide products that can sell whether customers come to the stores or not.