🏬 Across Japan, the department stores and shopping malls that once anchored entire communities are disappearing at an alarming pace. Between 2025 and 2026, iconic facilities like Meitetsu Department Store in Nagoya, Marui City Yokohama, Matsumoto Parco, and Takashimaya Rakusai are all closing their doors — some after more than 40 years of operation. Redevelopment plans exist on paper, but the "next chapter" remains frustratingly unclear. Japan's commercial landscape is undergoing a seismic transformation.
The Closure Wave: Landmarks Disappearing Across Japan
Japan's commercial facilities are closing at an unprecedented rate, with 2025–2026 marking a particularly brutal period for the retail landscape.
In Matsumoto, Nagano Prefecture, three major commercial facilities shut down within just three months in early 2025: Ito-Yokado Minami-Matsumoto, Matsumoto Parco, and Inoue Department Store. The local employment office estimated over 210 workers would lose their jobs, prompting emergency job fairs with dozens of participating companies. Matsumoto Parco, opened in 1984 during Japan's bubble era, once posted annual sales exceeding 10 billion yen (roughly $67 million) in 2006. But competition from a new Aeon Mall and the relentless rise of e-commerce slashed revenues to just 4 billion yen by 2021.
In Nagoya, the Meitetsu Department Store — the Tokai region's first terminal department store, founded in 1954 — announced its closure for February 28, 2026, along with the adjacent Meitetsu Grand Hotel. Both are being demolished to make way for a massive redevelopment project around Nagoya Station, but the new commercial facilities won't fully open until the early 2040s — leaving a gap of over a decade.
Marui City Yokohama, a fixture of the Yokohama Station East Exit area since 1996, will also close on February 28, 2026, ending roughly 30 years of service. In Kyoto, Takashimaya Rakusai — which opened in 1984 — is set to close in August 2026 after persistent operating losses and the impossibility of justifying the massive investment needed for renovations.
These are just the headline cases. Ito-Yokado, once one of Japan's largest general merchandise retailers, has been systematically closing stores nationwide as part of a strategy to consolidate in the Greater Tokyo area. Ibaraki Prefecture no longer has a single Ito-Yokado store. Four Japanese prefectures — Yamagata, Tokushima, Shimane, and Gifu — now have zero department stores at all.
Why Commercial Facilities Can No Longer Survive
The closure wave stems from several converging structural forces.
The e-commerce revolution. According to Japan's Ministry of Economy, Trade and Industry, the domestic BtoC physical goods e-commerce market reached 15.2 trillion yen in 2024, with an EC penetration rate of 9.78% — approaching the symbolic 10% threshold. Clothing already has a 23.38% EC rate, home electronics 43.03%, and books and media a staggering 56.45%. Smartphones now account for 61.7% of all online purchases. The categories that once drove department store foot traffic have decisively migrated online.
Aging infrastructure. Many of Japan's large commercial facilities were built during the bubble era of the 1980s and early 1990s, meaning they are now 30 to 40 years old. Bringing these buildings up to modern safety and comfort standards requires enormous capital investment — investment that operators can't justify when revenues are declining. Takashimaya Rakusai's closure is a textbook case: despite efforts to revitalize the store, its 2024 fiscal year ended in an operating loss, with no path to profitability in sight.
Population decline. Japan's shrinking and aging population is eroding the customer base that commercial facilities depend on, particularly in regional areas. The department store industry's total sales peaked at 9.7 trillion yen in 1991 and have since fallen to approximately 5.8 trillion yen in 2024 — roughly 60% of the peak.
Suburban competition. Large suburban shopping centers like Aeon Malls, optimized for car-dependent lifestyles with vast parking lots and diverse tenant mixes, have drawn customers away from station-area department stores and fashion buildings. Matsumoto Parco's decline accelerated sharply after Aeon Mall Matsumoto opened in 2017.
The Redevelopment Gap: A Decade of Uncertainty
Perhaps the most concerning aspect of the closure wave is what happens afterward — or rather, what doesn't happen.
The Meitetsu Department Store site in Nagoya illustrates the problem starkly. Demolition begins in fiscal 2026, new construction starts in 2027, but the first phase of the new complex isn't expected until 2033, with full commercial opening not anticipated until the early 2040s. One of Nagoya's most prominent locations could be "under construction" for well over a decade.
In Matsumoto, none of the three closed facilities have confirmed plans for their sites. J. Front Retailing, which operated Matsumoto Parco, has not revealed clear next steps. Inoue Department Store aims to reopen as a new shopping center, but timelines and details remain vague.
Rising construction costs — driven by materials inflation and labor shortages — have made redevelopment economics more challenging than ever. Private companies are increasingly cautious about committing capital, leading to situations where plans exist but execution stalls indefinitely.
A growing trend is the conversion of former commercial sites into residential towers. The former Sogo in Funabashi and the former Isetan in Sagami-Ono are both being replaced by large condominium developments. Where commercial viability is in doubt, housing has become a pragmatic alternative.
A Tale of Two Retail Worlds
Not all of Japan's retail sector is in decline. Isetan Shinjuku posted over 400 billion yen in sales for fiscal year ending March 2025 — a record. Hankyu Umeda in Osaka also reported all-time highs. Flagship stores in prime urban locations, catering to affluent customers and inbound tourists, are thriving.
This polarization holds important lessons. Pure merchandise sales can no longer compete with e-commerce convenience and pricing. But facilities that offer experiences, services, and community gathering spaces retain real demand. New-generation commercial developments like Newoman Takanawa (approximately 200 stores across 60,000 square meters within the Takanawa Gateway City project) and GranGreen Osaka are positioning themselves not as places to shop, but as places to spend time.
The Invisible Cost: Losing Community Spaces
Beyond the economic impact, the closure of commercial facilities erases something harder to quantify — community infrastructure.
Meitetsu Department Store's "Nana-chan" mannequin has been a beloved Nagoya landmark and meeting spot for decades. Inoue Department Store, founded as a kimono shop in 1885, held generations of memories for Matsumoto residents. These "memories of place" cannot be easily transferred to whatever comes next.
For elderly residents in particular, losing a familiar commercial facility means much more than a change in shopping destination. With limited mobility and transportation options, the disappearance of walkable or station-adjacent stores directly affects quality of daily life.
Japan's Challenge in a Global Context
Commercial facility decline isn't unique to Japan. The United States has faced its own "retail apocalypse" with widespread mall closures, and the UK continues to grapple with high street vacancies. However, Japan's population decline is faster than most developed nations, intensifying the challenge.
Japan's commercial sector also has unique assets. The recovery of inbound tourism provides a tailwind for urban facilities, and Japan's distinctive hospitality culture and experience-oriented retail offer value that e-commerce simply cannot replicate.
What's ultimately at stake is a fundamental redefinition of what commercial facilities are for. The transition from "a place to buy things" to "a place where people gather" — a kind of community living room — will determine which facilities survive into the next era.
In Japan, beloved commercial landmarks are vanishing one after another, and even the vision for their future remains unclear. Is something similar happening in your country? Are department stores and shopping malls closing, and if so, what's replacing them? We'd love to hear your perspective.
References
- https://news.yahoo.co.jp/expert/articles/c3d0fffbb89634c9dce6a94ac087677be217d0a6
- https://www.kenbiya.com/ar/ns/region/shinhoku/8553.html
- https://www.wwdjapan.com/articles/2000223
- https://www.fashionsnap.com/article/2026-open-and-close/
- https://www.meti.go.jp/press/2025/08/20250826005/20250826005.html
Reactions in Japan
I used to work part-time at Matsumoto Parco when I was a student, so hearing about the closure almost made me cry. Without that building, the whole atmosphere around Matsumoto Station will completely change. The fact that there's no plan for the site yet is what worries me the most.
Honestly, department stores closing is just how things go. There's no reason to take a train to shop at a department store anymore when Amazon delivers the next day. Instead of being sentimental, we should be thinking about what to do with these spaces next.
I'm really sad about Meitetsu Department Store closing. Meeting up in front of the Nana-chan mannequin was part of Nagoya's culture. I understand the redevelopment will bring something new, but completion in the 2040s? I'll be ancient by then.
Department store sales went from a peak of 9.7 trillion to 5.8 trillion yen — the format is essentially dying. Only a few stores like Isetan Shinjuku are doing great, and media reporting this as a 'department store revival' is misleading.
My grandmother said 'Once Inoue Department Store is gone, I'll have no reason to go to Matsumoto anymore' and it broke my heart. For the elderly, department stores aren't just shopping destinations — they're places to meet people, a reason to go outside.
The pattern of closed stores becoming tower condos — is that really OK? When commercial facilities turn into apartments, foot traffic drops and surrounding businesses fail one by one. The whole area slowly dies.
Ito-Yokado completely pulling out of Ibaraki Prefecture is shocking. It's a business decision by Seven & i, so you can't really argue, but having zero stores in an entire prefecture? Aeon ends up winning by default.
I work in construction, and redevelopment cost projections have been completely destroyed in the past 2-3 years. Material costs and labor shortages mean everything costs 1.5 times the original estimate at minimum. That's why nobody can break ground.
Department stores closing in rural areas, I get it. But Marui in Yokohama closing? I didn't expect that. The population's decent there. It's clearly not about location or size anymore — the entire business model has hit its limit.
When I was a kid, being taken to the rooftop amusement park at the department store was the ultimate treat. Kids today will never know that experience. I know it's just how times change, but it's sad that kind of 'special feeling' is disappearing from our cities.
I think local governments need to be more involved in commercial facility closures. Not just employment measures, but thinking about using vacated sites for public facilities — approaching this as urban planning for the future of the region.
The news about Shinjuku Myroad closing reminded me — I loved those little knick-knack shops in the basement. The redevelopment will probably bring a sleek new building, but that handmade, cozy vibe won't come back.
Everyone talks about 'experiential retail' and 'selling experiences over things,' but how many facilities are actually profitable doing that? Without merchandise sales, you can't collect tenant fees. Experiences alone don't pay rent.
Looking at Takanawa Gateway City and GranGreen Osaka, new models of commercial facilities are definitely emerging. It's sad to see old places go, but I want to be optimistic about what comes next.
I work at a regional shopping center, and honestly, it wouldn't surprise me if we closed too. Vacant tenant spaces are multiplying, creating a gap-toothed feel. Customers still visit, but they end up buying on Amazon anyway.
Inbound tourism boosting department stores is only happening in places like Shinjuku and Umeda. Regional areas see almost zero inbound visitors and zero benefit. The gap just keeps widening.
From the American Midwest, this is incredibly familiar. Our local mall now hosts flea markets in its parking lot because it's so empty. Japan seems to be following the same path about 10 years behind us. Converting to condos might not be the worst option — in America, many dead malls just sit abandoned.
Parisian department stores are struggling too, but Galeries Lafayette and Printemps survived by going all-in on experiential luxury. That model isn't realistic for Japan's regional stores, but perhaps department stores are just destined to become facilities exclusively for the wealthy.
This mirrors the UK's 'high street crisis' almost exactly. Towns where M&S or Debenhams pulled out saw their centers turn into ghost towns. I hope Japan avoids our fate. The key is mixed-use redevelopment — blending commercial, residential, and public facilities together.
Korea faces the same issue. Regional department stores are all struggling, and Lotte Mart pulled out of Jeju Island. In Seoul, some department stores survive by transforming into cultural centers, but applying that to Japanese regional areas would be tough.
Even in Swedish towns of around 200,000 people, large commercial facility closures are an issue. But our municipalities actively intervene, converting sites into public libraries and coworking spaces — and those have been well received. I'd like to see Japanese local governments adopt that mindset.
In China, new shopping malls are still opening, but vacancy rates are creeping up. Japan's situation might be previewing China's future in 5-10 years. With EC penetration above 50% here, malls centered on product sales are already unviable.
As an Italian, I've always admired Japan's department store culture. The depachika food halls and the artistry of their wrapping are remarkable. Losing that is a cultural loss. Even in Europe where department stores struggle, food-focused spaces survive. Could Japan lean into that direction?
India's in the opposite situation — malls are booming and EC penetration is still below 10%. Japan's experience is instructive, but India's growing population should prevent the same outcome. Then again, population alone doesn't guarantee commercial viability.
In the Netherlands, some vacant commercial properties have been converted to urban farms and artist studios. The 'next form' of a commercial facility doesn't have to be commercial. It should be seen as an opportunity to create what the community actually needs.
In German regional cities, Karstadt and Kaufhof closures have hollowed out inner cities too. The government has 'city center revitalization programs,' but with limited success. The root cause is the shift to online, and policy can't really stop that.
In Mexico, abandoned commercial buildings can become security concerns — large vacant structures attract crime. Japan's safety might reduce that risk, but leaving large sites vacant for extended periods still carries risks worth considering.
I'm a Japanese-Brazilian. My grandparents often reminisced about depachika food halls. Brazil has vacancy issues in shopping centers too, but they still function as social gathering spots. Japan may be leaning too heavily on e-commerce at the cost of losing real-world meeting places.
In Poland, old department stores are being reborn as food halls. Warsaw's Hala Koszyki is a huge success — not a regular food court, but a market where local chefs run small kitchens. It seems like a great fit with Japan's depachika food culture.
In Australia, Myer and David Jones are shrinking their footprint too. In regional cities, when anchor tenants leave malls, the remaining stores follow. The story of 210 jobs vanishing at once in Matsumoto — same thing happens here.
Dubai is still building mega-malls, but they're shifting toward experiential concepts — malls with ski slopes and theme parks inside. For Japanese department stores to survive, they need to create reasons to visit beyond just buying things.
Finland's small towns face similar large-store retreats. But in Helsinki, some closed commercial spaces have been turned into civic activity centers and community gardens — and they're popular. Maybe Japan is too fixated on keeping these sites commercial?