TOKYO -- Outside Masahisa Noda's secondhand shop in Tokyo's Asakusa district are racks of bargain items, on sale at 30% off; on the glass door is a sign offering a 5% rebate for cashless payments. Inside, surrounded by kimonos and obis stacked neatly on shelves, Noda is gloomy about the future. A hike in the consumption tax last fall hit his sales hard, and he sees little prospect of a recovery.
"People buy a kimono as a small luxury. It's not an essential item," he said. "A tax increase of just 2% can still make people postpone purchases. Sales started slowing even before the higher tax kicked in. People had already become defensive. They tried to avoid unnecessary spending."