In Japan, department stores and public markets grew rapidly from the early twentieth century, and these had significant impacts on both consumers and traditional retailers. Despite pressures from the large-scale retailers, however, traditional, small-scale retailers stubbornly survived. As a result, the Japanese retail system in the pre-war period was characterized as ‘the dual structure’. In addition, the government played a critical role in Japan's retail development. These features can be accounted for as reflections of the unique modernization process of the country.