Changes in consumer spending and weaker demand for some goods in Japan is wreaking havoc on the country's supermarket sector.
This week, the Nagasakiya chain, a medium-sized company running 95 food and non-food stores in Japan employing more than 2,000 people, collapsed with debts of $3.5bn. It has been grappling with a sharp decline in sales coupled with a fall in real estate prices. It had already attempted to restructure.
President Tokuichi Kitajima said there was no hope for the company to remain profitable but it is hoping to continue operating the stores.
Analysts are predicting a shower of further activity in the sector, largely due to similar problems being experienced by other retailers. Daiei, the country's largest supermarket company, is also juggling liabilities of $22.4bn.
"It is the inevitable result of overexpansion during Japan's bubble era," said one analyst.
The company's crash has spurred the Japan's Ministry of International Trade and Industry to help prevent knock-on bankruptcies among the company's suppliers.
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