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. 

Thematic (Sector/Industry)

<ul>
<li>Wealthy Japanese staying in Japan, more people acquiring wealth, a return of inbound tourists and better merchandising and store investment. </li>
<li>All combined to help department stores rebound strongly in 2022 but there has been a sharp shift in where department stores make their money.</li>
<li>Further growth is expected but only for some, and in some product categories much more than others.</li>
</ul>


Wealthy Japanese staying in Japan, more people acquiring wealth, a return of inbound tourists and better merchandising and store investment. 
All combined to help department stores rebound strongly in 2022 but there has been a sharp shift in where department stores make their money.
Further growth is expected but only for some, and in some product categories much more than others.


Japan Department Stores: Transformation Amidst a Recovery

Equity Bottom-Up

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

<ul>
<li>Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. </li>
<li>The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.</li>
<li>While dependence on just a few stores makes <a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi Holdings Ltd (3099 JP)</a> vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.</li>
</ul>


Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. 
The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.


Isetan-Mitsukoshi: ¥300 Billion from Just One Store

<ul>
<li>Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers. </li>
<li>It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.</li>
<li>Capturing more share of the wealth market is the only real hope department stores have to grow.</li>
</ul>


Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers. 
It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.
Capturing more share of the wealth market is the only real hope department stores have to grow.


Iwataya Opens Lounge S - A New Space for the Truly Wealthy

<ul>
<li>Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.</li>
<li>Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.</li>
<li>Department stores will rebound further but only the leading firms will survive in a contracting sector.</li>
</ul>


Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.
Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.
Department stores will rebound further but only the leading firms will survive in a contracting sector.


<ul>
<li>Inbound tourism only got going again from October but the pent up demand to visit Japan has meant a surge in visitors. </li>
<li>Since many tourists also have stuffed wallets due to curtailed spending during the pandemic and the Yen is at very low levels, there is much higher spending. </li>
<li>Key beneficiaries are listed below among department stores, premium fashion stores and drugstores.</li>
</ul>


Inbound tourism only got going again from October but the pent up demand to visit Japan has meant a surge in visitors. 
Since many tourists also have stuffed wallets due to curtailed spending during the pandemic and the Yen is at very low levels, there is much higher spending. 
Key beneficiaries are listed below among department stores, premium fashion stores and drugstores.


Inbound Tourism up 50%, Spending Almost at 2019 Levels

Japan

Isetan Mitsukoshi Holdings Ltd. is a holding company established through a merger of Mitsukoshi and Isetan. The group operates department stores nationwide, selling clothing, foods, household goods, cosmetics and general merchandise.

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Isetan Mitsukoshi Holdings Ltd (3099 JP)

Japan Department Stores: Transformation Amidst a Recovery

Department stores in Japan have rebounded to close to 2019 levels but the sector as a whole will return to genteel contraction once reached. Within...

Michael Causton

Isetan-Mitsukoshi: ¥300 Billion from Just One Store

Department stores have seen a remarkable recovery since Covid and the leading store, Isetan Shinjuku, more than most. Sales are expected to exceed...

Michael Causton

Iwataya Opens Lounge S - A New Space for the Truly Wealthy

Department stores in Japan are investing heavily in lounges and services to better attract wealthy customers. With the HNWI market one of the few...

Michael Causton

Outlook for Japanese Retail in 2023

Most Japanese retailers can look forward to a good year in 2023 but there will be challenges for formats like supermarkets where consolidation is...

Michael Causton

Inbound Tourism up 50%, Spending Almost at 2019 Levels

Of course inbound tourism will rebound in Japan in 2023 but spending per visitor may well exceed 2019 levels due to the weak Yen and full wallets....

Michael Causton

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