Japanese retailing is more efficient than most people think

Kyoji Fukao,
professor at Hitotsubashi University’s Economic Research Institute,
thinks so too. The team he heads provides much of the Japanese data
that go into international comparisons. He argues that the usual
measures of service sector efficiency – value added per man hour and
total factor productivity, which incorporates capital and labour inputs
– are crude and hard to compare across borders.

He cites Japan’s
retail sector, regularly branded as inefficient. The basic measure of
retail-sector productivity is how much of a product an employee can
shift in an hour. On this measure, Germany does well. That turns out to
be because of restricted opening hours, which oblige customers to make
hefty purchases in one go. Japan does badly. Cavernous US superstores
do better than cramped noodle or tofu shops. Japan also has a dense
network of convenience stores on almost every city block, open 24
hours, allowing people to shop whenever they want. This makes them
inefficient, since purchases are less concentrated.

No allowance
is made, either, for the fact that Japanese shops tend to be within
walking or, at most, cycling distance. Figures do not capture the
inconvenience of having to travel, or the externalities associated with
long shopping expeditions: traffic accidents, pollution, road

Here is the full article, interesting throughout.  The quality of Japanese service, by the way, is miles ahead of anywhere else (though stores don’t like to take returns) and those subjective pleasures of the shopping experience don’t get picked up by the numbers either.  I can’t imagine how a Japanese would feel moving to Germany or Austria.


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