Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

<ul>
<li>Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. </li>
<li>As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.</li>
<li>Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.</li>
</ul>


Last month, Welcia announced the acquisition of Kokumin, the 30th ranked drugstore that runs a well-respected chain stretching across the country. 
As the newly formed Matsukiyo Cocokara group continues to struggle, another year of high growth means Welcia will be only just behind when FY2021 results come in.
Overall growth in the drugstore sector remains strong and could even overtake convenience stores in the near future.


Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>I would like to update and further analyze the relationship between the diversification of shareholding and the decrease in shareholding ratio of the founding families and their performance.</li>
<li>The drugstore industry that has entered a period of shakeout due to generational shift from the founder's generation is expected to undergo an industry reorganization by Aeon in the future.</li>
<li>If signs of a slowdown in profit growth appear in a company where the founder's shareholding has declined, it could lead to a change in management and industry restructuring.</li>
</ul>


I would like to update and further analyze the relationship between the diversification of shareholding and the decrease in shareholding ratio of the founding families and their performance.
The drugstore industry that has entered a period of shakeout due to generational shift from the founder's generation is expected to undergo an industry reorganization by Aeon in the future.
If signs of a slowdown in profit growth appear in a company where the founder's shareholding has declined, it could lead to a change in management and industry restructuring.


Japan's Governance: Founder Family Ownership / Case of Drugstore Industry (3)

<ul>
<li>The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.</li>
<li>The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.</li>
<li>As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.</li>
</ul>


The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.
The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.
As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.


Japan requires retail developers to submit copious amounts of documentation to open any store over 1,000 sqm. In the past five years, there have been 2,505 applications for these larger developments, 750 of them anchored by drugstores, and more than 400 by <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a> alone. The figures show that it is drugstores that are expanding more than any other retail sector.

Japan requires retail developers to submit copious amounts of documentation to open any store over 1,000 sqm. In the past five years, there have been 2,505 applications for these larger developments, 750 of them anchored by drugstores, and more than 400 by Cosmos Pharmaceutical (3349 JP) alone. The figures show that it is drugstores that are expanding more than any other retail sector.

Drugstores Leads Large Store Openings in Japan Led by Cosmos Pharma

Thematic (Sector/Industry)

Inevitably, there were widespread problems throughout the Japanese retail sector in 2020, and with drugstores and supermarkets suffering a relative decline in the first quarter of 2021, things are still yet to improve. Department stores were hit hardest, with convenience stores also suffering their worst year on record but, in contrast, big specialty formats and supermarkets had a good year. The three big specialty sectors, electronics, drugstores and home centres, all had excellent years in 2020, as did supermarkets.Although incomes were robust, consumption declined, meaning that savings accounts are fuller than ever before, promising a surge in spending once confidence returns.

Inevitably, there were widespread problems throughout the Japanese retail sector in 2020, and with drugstores and supermarkets suffering a relative decline in the first quarter of 2021, things are still yet to improve. Department stores were hit hardest, with convenience stores also suffering their worst year on record but, in contrast, big specialty formats and supermarkets had a good year. The three big specialty sectors, electronics, drugstores and home centres, all had excellent years in 2020, as did supermarkets.Although incomes were robust, consumption declined, meaning that savings accounts are fuller than ever before, promising a surge in spending once confidence returns.

FY2020 Proves Better than Expected for Japan Retail but Savings Surge

Japan

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

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Tsuruha Holdings (3391 JP)

Welcia's Purchase of Kokumin: Watch Out Matsukiyo Cocokara

Matsukiyo Cocokara may be No. 1 for now in Japan's drugstore sector but Welcia and Tsuruha are not standing still. Welcia's acquisition of Kokumin...

Michael Causton

Japan's Governance: Founder Family Ownership / Case of Drugstore Industry (3)

This article will update the relationship between diversification/reduced shareholding of founding families and their performance and advance the...

Metrical Inc

Matsukiyo Cocokara: Together at Last

MatsukiyoCocokara may top the drugstore ranking post-merger but Welcia and Tsuruha have grown much faster and may take the lead again soon given...

Michael Causton

Drugstores Leads Large Store Openings in Japan Led by Cosmos Pharma

Some analysts think the drugstore sector in Japan is saturated. As the latest govt. data shows, the sector has led in large store expansion in the...

Michael Causton

FY2020 Proves Better than Expected for Japan Retail but Savings Surge

A bad year for dept. stores and sectors like apparel (with more bad news to come) but a great one for drugstores, electronics and food. Savings...

Michael Causton

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