Japan consumers shun luxury goods

Japanese consumers are keeping their wallets firmly closed after the first sales tax rise in 17 years, with luxury items and appliances suffering as one major department store reported a 25 percent drop in sales. The precipitous plunge comes after millions of shoppers made a last-minute dash to stores before the national levy rose to 8 per cent from 5 per cent on April 1, a rise that sparked fears of a drop in consumer spending in turn derailing Japan's nascent economic recovery. Like many retailers, department store Takashimaya had seen a big jump in sales last month, with demand particularly brisk for handbags and other luxury items ahead of the rate hike -- seen as critical for containing Japan's spiralling national debt, according to AFP.