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>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.


Equity Bottom-Up

<ul>
<li>Yaoko opened a discount supermarket last year and added a second in March, using knowhow acquired from the Ave chain it bought in 2017. </li>
<li>The new store is purpose built to save costs and offer lower prices, and should prove popular as inflation rises, while delivering higher margins than supermarkets typically achieve.</li>
<li>The format stands in marked contrast to other discounters such as <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP)'s </a>Gyomu Super but both formats show that discounters can make more money than other supermarkets.</li>
</ul>


Yaoko opened a discount supermarket last year and added a second in March, using knowhow acquired from the Ave chain it bought in 2017. 
The new store is purpose built to save costs and offer lower prices, and should prove popular as inflation rises, while delivering higher margins than supermarkets typically achieve.
The format stands in marked contrast to other discounters such as Kobe Bussan (3038 JP)'s Gyomu Super but both formats show that discounters can make more money than other supermarkets.


Discount Retail Gets Mainstream Support: Yaoko Expands Discount Supermarket

<ul>
<li>The drugstore sector is now 30% larger than it was in 2015, the fastest growth of any retail channel other than e-commerce. </li>
<li>In 2020 and 2021 that growth continued, with only some minor signs of slowing after the boost that many chains enjoyed at the beginning of the pandemic. </li>
<li>Expansion into food means that drugstores are fast becoming competitors to other retailers and, by 2025, the sector could even break ¥10 trillion, matching the size of convenience stores.</li>
</ul>


The drugstore sector is now 30% larger than it was in 2015, the fastest growth of any retail channel other than e-commerce. 
In 2020 and 2021 that growth continued, with only some minor signs of slowing after the boost that many chains enjoyed at the beginning of the pandemic. 
Expansion into food means that drugstores are fast becoming competitors to other retailers and, by 2025, the sector could even break ¥10 trillion, matching the size of convenience stores.


Japanese Drugstores: The Best Retail Bet Japan Has

<ul>
<li>As more suppliers announce price increases, larger retailers are turning to discount campaigns to establish some early price credibility before competition gets even fiercer. </li>
<li>Lower prices will increasingly attract customers as price sensitivity quickly rises, benefiting discount retailers.</li>
<li>But, with the Yen so low, import prices are also set to add to the pressure pin standard price retailers – a full list of vulnerable retailers below.</li>
</ul>


As more suppliers announce price increases, larger retailers are turning to discount campaigns to establish some early price credibility before competition gets even fiercer. 
Lower prices will increasingly attract customers as price sensitivity quickly rises, benefiting discount retailers.
But, with the Yen so low, import prices are also set to add to the pressure pin standard price retailers – a full list of vulnerable retailers below.


Japan's Big Retailers Resist Price Pressure

<ul>
<li>With energy costs still rising and ongoing supply-chain issues exacerbated by the re-emergence of Covid problems in China, Japanese consumers suddenly face the prospect of genuine price inflation.</li>
<li>How will they respond? Some retailers are trying to resist higher prices at the expense of profits and others have no choice but to raise prices.</li>
<li>We look at the wholesale, retail and consumer response to inflation and which retailers stand to benefit or lose from inflation.</li>
</ul>


With energy costs still rising and ongoing supply-chain issues exacerbated by the re-emergence of Covid problems in China, Japanese consumers suddenly face the prospect of genuine price inflation.
How will they respond? Some retailers are trying to resist higher prices at the expense of profits and others have no choice but to raise prices.
We look at the wholesale, retail and consumer response to inflation and which retailers stand to benefit or lose from inflation.


Widespread Price Rises at Japanese Retail and Wholesale

Japan

KOBE BUSSAN CO., LTD. is a supermarket franchise store operator which mainly deals in foods stuffs.  The Company also has direct-run stores.

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Kobe Bussan (3038 JP)

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

Discount Retail Gets Mainstream Support: Yaoko Expands Discount Supermarket

Discount retailing continues to boom in Japan and now even the best mainstream supermarket chains like Yaoko are entering the market. The high...

Michael Causton

Japanese Drugstores: The Best Retail Bet Japan Has

Japan's drugstore sector has been written off by many leading analysts in the past. They were wrong then and are wrong now. The sector has plenty...

Michael Causton

Japan's Big Retailers Resist Price Pressure

The pressure on costs should just mean that retailers raise prices but with competition so intense, standard retailers are trying to resist raising...

Michael Causton

Widespread Price Rises at Japanese Retail and Wholesale

Japan is finally getting inflation after a decade of government failed efforts. We examine the wholesale, retail and consumer response to evaluate...

Michael Causton

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