'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><p>Our best and worst pair from Tuesday's announcements is consumer electronics retailer <a href="https://www.smartkarma.com/entities/bic-camera-inc" target="_blank" data-smartkarma-citation="entities:11328:1" rel="noopener">Bic Camera (3048 JP)</a> and Japan's largest mall operator <a href="https://www.smartkarma.com/entities/aeon-mall-co-ltd" target="_blank" data-smartkarma-citation="entities:5262:1" rel="noopener">AEON Mall (8905 JP)</a>.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/781/original/2020-10-07_06-18-08.png?1602019101" class="editor-image img-responsive" data-smartkarma-image-id="163781"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/163/782/original/2020-10-07_06-18-56.png?1602019156" class="editor-image img-responsive" data-smartkarma-image-id="163782"></figure><div class="content-caption"><span>Source for all charts &amp; tables: Japan Analytics</span></div><div><hr></div><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>16 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 63% Positive / 0% Neutral / 37% Negative</p></li>
<li><p><strong>Average Results Score Change</strong>: +3.4 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> +3.4% Quarter YoY / -0.5% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change</strong>: +0.3ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses: </strong>25%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>11 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 45% Positive /18% Neutral / 37% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 33% Positive / 0% Neutral / 67% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -0.3 point</p></li>
</ul></div>

• BEST &amp; WORST •Our best and worst pair from Tuesday's announcements is consumer electronics retailer Bic Camera (3048 JP) and Japan's largest mall operator AEON Mall (8905 JP).Source for all charts &amp; tables: Japan AnalyticsDAILY STATS16 Quarterly Results
Results Score: 63% Positive / 0% Neutral / 37% Negative
Average Results Score Change: +3.4 points
Average % Change in Revenue: +3.4% Quarter YoY / -0.5% Rolling TTM YoY 
Average Operating Profit Margin Change: +0.3ppt
Percentage Making Quarterly Losses: 25%
11 Annual • 3 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 45% Positive /18% Neutral / 37% Negative
Interim Forecast/Revision Score Change: 33% Positive / 0% Neutral / 67% Negative
Average Forecast/Revision Score Change: -0.3 point


🇯🇵 JAPAN • Results & Revisions - 10/​​​​​​​06 -  SAN-A, AEON Mall, Consumer Electronics Retailers

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. 

<p>At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.</p>
<p>Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.</p>
<p>Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.</p>
<p>The following is an in-depth review of Japan's retail sector, providing:</p>
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
<p>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.</p>

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

<p>Retail sales slumped again in May, but only because people are not buying clothes, visiting department stores and shopping centres, or buying their lunches at convenience stores.</p><p>Although this led to another major drop in total sales, several sectors did very well and in June there was a surge in spending at some speciality chains and a return to some semblance of normality for many.</p>

Retail sales slumped again in May, but only because people are not buying clothes, visiting department stores and shopping centres, or buying their lunches at convenience stores.Although this led to another major drop in total sales, several sectors did very well and in June there was a surge in spending at some speciality chains and a return to some semblance of normality for many.

Japan Retail: Essentials Strong in May but in June Even Discretionary Bounces Back

<p>No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.</p><p>What is certain is that the Japanese consumer economy will recover and it is just a question of when.</p><p>The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be <strong>one of the most dramatic and far-reaching seen so far in retail.</strong></p><p><strong>But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.</strong></p><p>The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into <strong>which sectors, formats and specific companies will win and lose in the next three years</strong>.</p><p><strong>For a short read, we provide the conclusions and winners and losers first.</strong></p>

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

After Covid: The Future for Japanese Retail: Winners & Losers

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/200/original/2020-04-09_06-30-15.png?1586381444" class="editor-image img-responsive" data-smartkarma-image-id="127200"></figure><div class="content-caption">Source • NHK</div><p><strong>SOCIAL SPREADING</strong> - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's case-count continues to climb and is becoming more widespread geographically. There is anecdotal evidence of movement by those that can afford to do so to other areas of the country, which perhaps explains some of these increases. The Governor of Okinawa, which saw five new cases yesterday, has pleaded with citizens of other parts of Japan not to travel there. Meanwhile, the Mayor of Nagoya has been over-ruled by the Bolsonaro-like Governor of Aichi Prefecture in his request to implement stricter controls. A similar dynamic is playing out between the Governor of Tokyo, which saw a new high of 144 new cases yesterday, and the national government.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/201/original/IMG_1197.jpg?1586382076" class="editor-image img-responsive" data-smartkarma-image-id="127201"></figure><div class="content-caption">Source • NHK</div><p><strong>THE PATH TO 80%</strong> -  Japan's goal is to reduce social mobility by 80% and, as measured by activity on the <em>Yamanote</em> rail loop-line around central Tokyo, this was largely achieved last weekend. The reduction on weekdays at peak times from 30th March to 3rd April is still 40% as is activity at the famous Shibuya 'scramble' crossing as shown above. From personal observation, the public and businesses have yet to respond fully to the government's recommendations and there is still confusion as to which business can stay open and if so under what conditions they should operate. The default position, so far, for most non-leisure-related consumer-facing companies is to remain open with customer-distancing.  As the UK has learned to its cost, consistent and repeated messaging is required to ensure even a minimal level of compliance.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/205/original/2020-04-09_07-03-22.png?1586383423" class="editor-image img-responsive" data-smartkarma-image-id="127205"></figure><div class="content-caption">Source • OECD, Financial Times</div><p><strong>FALLOUT</strong> - Forty-two companies have already declared bankruptcy since the onset of COVID-19, all of which are hotels or tour companies. In light of the unclear messaging on compensation for businesses, a Tokyo taxi company yesterday laid off all of its 600 drivers recommending that claiming unemployment benefit would be the quickest way for them to receive benefits while suggesting they would be rehired at a later date. Unsurprisingly the 'Economy Watchers' survey which measures confidence in an array of 1,812 retail, restaurant and service-industry staff fell to 14.2 in March, the lowest score since the series started in 2002. The more robust Cabinet Office index of consumer confidence covering 6,806 households reached an eleven-year low of 30.9, slightly ahead of the March 2009 low of 29.4 and downgraded its assessment to 'worsening'. The OECD has published some ominous forecasts for the potential impact on GDP broken down by sector. We consider this to be a 'worst-case' scenario in the event of a full shutdown of social activity which the government is trying to avoid at all costs.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/212/original/File%202020-04-09%204%2005%2042.jpeg?1586384975" class="editor-image img-responsive" data-smartkarma-image-id="127212"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/214/original/2020-04-09_03-38-04.png?1586385031" class="editor-image img-responsive" data-smartkarma-image-id="127214"></figure><div class="content-caption">Source • Financial Times</div><div class="content-caption"></div><p><strong>PROPORTIONATE RESPONSE</strong> - In this respect, it is important to reflect that the case and absolute fatality rates from COVID-19 in Japan (as is also true in Taiwan, Singapore and South Korea) are very low. Medical scientists and several recent <strong><a href="https://www.icnarc.org/About/Latest-News/2020/03/22/Report-On-196-Patients-Critically-Ill-With-Covid-19" target="_blank" rel="noopener">studies</a></strong>have posited that these benign outcomes may be related to a variety of physiological and environmental factors such as nutrition, obesity, air quality and exposure to Vitamin-D producing sunlight. Such factors may also explain the outcomes so far in Australia and Argentina relative to Spain and Italy. Having experienced the twin traumas of the 2008 financial crisis and the events of "3/11", the Japanse government and Japanese industry are pursuing a measured response which, we believe, will result in a less traumatic economic outcome than other developed countries may experience. Some Twitter 'wags' have compared the chart above to Hokusai's famous ukiyo-e print "<em>Kanagawa-oki Nami Ura</em>". The natural metaphor is quite apt as is the enduring quality of Fuji-san in the distance.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/216/original/2020-04-09_03-36-31.png?1586386089" class="editor-image img-responsive" data-smartkarma-image-id="127216"></figure><div class="content-caption">Source • Hokusai</div><p>In the <strong>DETAIL</strong> below, we shall review the fourteen results announcements and twelve revisions or initial forecasts. The positive/negative balance for results was 9:5, for revisions and forecasts the split was 2:0:9 continuing the recent trend of pessimistic outlooks for consumer-orientated businesses. </p>

Source • NHKSOCIAL SPREADING - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's case-count continues to climb and is becoming more widespread geographically. There is anecdotal evidence of movement by those that can afford to do so to other areas of the country, which perhaps explains some of these increases. The Governor of Okinawa, which saw five new cases yesterday, has pleaded with citizens of other parts of Japan not to travel there. Meanwhile, the Mayor of Nagoya has been over-ruled by the Bolsonaro-like Governor of Aichi Prefecture in his request to implement stricter controls. A similar dynamic is playing out between the Governor of Tokyo, which saw a new high of 144 new cases yesterday, and the national government.Source • NHKTHE PATH TO 80% -  Japan's goal is to reduce social mobility by 80% and, as measured by activity on the Yamanote rail loop-line around central Tokyo, this was largely achieved last weekend. The reduction on weekdays at peak times from 30th March to 3rd April is still 40% as is activity at the famous Shibuya 'scramble' crossing as shown above. From personal observation, the public and businesses have yet to respond fully to the government's recommendations and there is still confusion as to which business can stay open and if so under what conditions they should operate. The default position, so far, for most non-leisure-related consumer-facing companies is to remain open with customer-distancing.  As the UK has learned to its cost, consistent and repeated messaging is required to ensure even a minimal level of compliance.Source • OECD, Financial TimesFALLOUT - Forty-two companies have already declared bankruptcy since the onset of COVID-19, all of which are hotels or tour companies. In light of the unclear messaging on compensation for businesses, a Tokyo taxi company yesterday laid off all of its 600 drivers recommending that claiming unemployment benefit would be the quickest way for them to receive benefits while suggesting they would be rehired at a later date. Unsurprisingly the 'Economy Watchers' survey which measures confidence in an array of 1,812 retail, restaurant and service-industry staff fell to 14.2 in March, the lowest score since the series started in 2002. The more robust Cabinet Office index of consumer confidence covering 6,806 households reached an eleven-year low of 30.9, slightly ahead of the March 2009 low of 29.4 and downgraded its assessment to 'worsening'. The OECD has published some ominous forecasts for the potential impact on GDP broken down by sector. We consider this to be a 'worst-case' scenario in the event of a full shutdown of social activity which the government is trying to avoid at all costs.Source • Financial TimesPROPORTIONATE RESPONSE - In this respect, it is important to reflect that the case and absolute fatality rates from COVID-19 in Japan (as is also true in Taiwan, Singapore and South Korea) are very low. Medical scientists and several recent studieshave posited that these benign outcomes may be related to a variety of physiological and environmental factors such as nutrition, obesity, air quality and exposure to Vitamin-D producing sunlight. Such factors may also explain the outcomes so far in Australia and Argentina relative to Spain and Italy. Having experienced the twin traumas of the 2008 financial crisis and the events of "3/11", the Japanse government and Japanese industry are pursuing a measured response which, we believe, will result in a less traumatic economic outcome than other developed countries may experience. Some Twitter 'wags' have compared the chart above to Hokusai's famous ukiyo-e print "Kanagawa-oki Nami Ura". The natural metaphor is quite apt as is the enduring quality of Fuji-san in the distance.Source • HokusaiIn the DETAIL below, we shall review the fourteen results announcements and twelve revisions or initial forecasts. The positive/negative balance for results was 9:5, for revisions and forecasts the split was 2:0:9 continuing the recent trend of pessimistic outlooks for consumer-orientated businesses. 

🇯🇵 JAPAN • Revisions & Results 8th April - Getting to 80%▼& The GDP Contraction Lottery

Japan

BIC CAMERA INC. operates electronic retail stores throughout Japan focusing on the Tokyo metropolitan area.  The Company sells audio and video equipments, electrical home appliances and telecommunication equipments.  Bic Camera also runs an Internet shopping site.

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Bic Camera Inc (3048 JP)

🇯🇵 JAPAN • Results & Revisions - 10/06 - SAN-A, AEON Mall, Consumer Electronics Retailers

• BEST WORST • Our best and worst pair from Tuesday's announcements is

Campbell Gunn

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

Japan Retail: Essentials Strong in May but in June Even Discretionary Bounces Back

Retail sales slumped again in May, but only because people are not buying clothes, visiting department stores and shopping centres, or buying their...

Michael Causton

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

🇯🇵 JAPAN • Revisions & Results 8th April - Getting to 80%▼& The GDP Contraction Lottery

SOCIAL SPREADING - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's...

Campbell Gunn

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🇯🇵 JAPAN • Results & Revisions - 10/​​​​​​​06 - SAN-A, AEON Mall, Consumer Electronics Retailers

• BEST WORST • Our best and worst pair from Tuesday's announcements is

Campbell Gunn

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

Japan Retail: Essentials Strong in May but in June Even Discretionary Bounces Back

Retail sales slumped again in May, but only because people are not buying clothes, visiting department stores and shopping centres, or buying their...

Michael Causton

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

🇯🇵 JAPAN • Revisions & Results 8th April - Getting to 80%▼& The GDP Contraction Lottery

SOCIAL SPREADING - As the restrictions are implemented with varying degrees of compliance in the designated prefectures in Japan, Japan's...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions - 10/06 - SAN-A, AEON Mall, Consumer Electronics Retailers