The trade operations of wholesalers and retailers has often been denigrated by other nations as a barrier to trade, as well as being called antiquated and inefficient. Small retailers and "
mom and pop" stores predominated- -in 1985 there were 1.6 million retail outlets in Japan, slightly more than the total number of retail outlets in the United States (1.5 million in 1982), even though Japan has only half the population of the United States and is smaller in size than California.
Small businesses are a large voter base of the
LDP and had a strong stance in
government-business relations. The business situation for non-Japanese companies has improved, though, due to growing experience of foreign firms on the market and more international cooperation in the wake of
globalization. The Japanese economic crisis of the 1990s helped, too. There were several changes in wholesaling and retailing in the 1980s. Japan's distribution system was becoming more efficient. Retail outlets and wholesale establishments both peaked in number in 1982 and then went down 5.4 percent and 3.7 percent, respectively, in 1985. The main casualties were sole proprietorships, especially mom-and-pop stores and wholesale locations with fewer than ten employees. Almost 96,000 of the 1,036,000 mom-and-pop stores in operation in 1982 were out of business three years later. Government estimates for the late 1980s show additional consolidation in both wholesale and retail sectors including a continued sharp decline in mom-and-pop store operations. A further decline in mom-and-pop stores is expected as a result of the
Large-Scale Retail Store Law of 1990, which greatly reduced the power of small retailers to block the establishment of large retail stores. Soaring land prices are another major cause of the decline of mom-and-pop stores, but an even more important reason is the growth of convenience and discount stores. Discount stores are not much bigger than the traditional small shops, but their distribution networks gives them a big pricing edge. As of 2005, large chains dominate nearly every market niche be it
consumer electronics (notably
Yodobashi Camera) or cookies (
Aunt Stellas). In the 1980s, Japanese consumers were discovering the advantages of
catalog shopping, which offered not only convenience but also greater selection and lower prices. According to a
Nikkei survey, the mail-order business expanded 13 percent between April 1987 and March 1988 alone, to more than US$8.9 billion in annual sales. Specialty chains, particularly those handling men's and women's clothing, shoes, and consumer electronics, were also doing better than the overall industry. Department stores, supermarkets, and superstores (hybrid supermarket-discount stores) and other big retail operations were gaining business at the expense of small retailers, although their progress was quite slow. Between 1980 and 1988, department stores increased their share of total retail sales by only 1 percentage point to 8.4 percent. Supermarkets and superstores increased in market share from 6.5 to 7.3 percent. Between 1980 and 1988, the number of department stores grew from 325 to just 371, and other big self-service stores only increased in number by 62 units between 1984 and 1988. The late 1990s brought a decline of the catalog mail order in favor of
online shopping. ==Service industries==