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>The battle for online food sales continues to heat up, with Rakuten and Amazon squaring up to challenge for supremacy. </li>
<li>Although Amazon has signed two of the largest names, Life and Valor, Rakuten is quickly catching up, last month adding Comodi-Iida to existing members, Seiyu, Beisia and Inageya.</li>
<li>Other supermarket chains are already preparing to sign-up with Rakuten. </li>
</ul>


The battle for online food sales continues to heat up, with Rakuten and Amazon squaring up to challenge for supremacy. 
Although Amazon has signed two of the largest names, Life and Valor, Rakuten is quickly catching up, last month adding Comodi-Iida to existing members, Seiyu, Beisia and Inageya.
Other supermarket chains are already preparing to sign-up with Rakuten. 


Rakuten’s Netsuper Expands with New Partners

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>’s Q1 OP of ¥13.3bn (consensus: ¥10.6bn) seems to suggest that the company’s profitability is heading up following the upfront investments in store renovations.</li>
<li>After beating consensus OP by more than 25% in Q1, we think the company is being overly conservative by maintaining the OP guidance around ¥10.0bn below the pre-COVID level.</li>
<li>Based on the FY+1 OP to share price trend historically, our FY23 OP estimate of ¥63.0bn suggests that Lawson should trade at around ¥6,500 per-share, an upside of around 36%.  </li>
</ul>



Lawson Inc (2651 JP)’s Q1 OP of ¥13.3bn (consensus: ¥10.6bn) seems to suggest that the company’s profitability is heading up following the upfront investments in store renovations.
After beating consensus OP by more than 25% in Q1, we think the company is being overly conservative by maintaining the OP guidance around ¥10.0bn below the pre-COVID level.
Based on the FY+1 OP to share price trend historically, our FY23 OP estimate of ¥63.0bn suggests that Lawson should trade at around ¥6,500 per-share, an upside of around 36%.  


Lawson: Profitability to Expand with Slowing Growth Investments

Thematic (Sector/Industry)

<ul>
<li>The convenience store sector returned to growth last year but the outlook remains uncertain.</li>
<li>The big 3 chains still have a way to go to adjust to a new era of slower growth and the need for new ideas.</li>
<li>Even with new ideas on merchandising and services, the CVS sector remains saturated and the only real growth is overseas or in other formats.</li>
</ul>


The convenience store sector returned to growth last year but the outlook remains uncertain.
The big 3 chains still have a way to go to adjust to a new era of slower growth and the need for new ideas.
Even with new ideas on merchandising and services, the CVS sector remains saturated and the only real growth is overseas or in other formats.


Top Japanese Convenience Store Chains Rebound in FY2021

<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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a> acquired the upmarket supermarket operator, Seijo Ishii, in 2014 for ¥55 billion.</li>
<li>It is now considering plans for an IPO for Seijo next year following a boom in the company's fortunes during the pandemic.</li>
<li>Net profit rose 13% last year and the potential for growth remains strong given the expansion of the wealth market in Japan. </li>
</ul>



Lawson Inc (2651 JP) acquired the upmarket supermarket operator, Seijo Ishii, in 2014 for ¥55 billion.
It is now considering plans for an IPO for Seijo next year following a boom in the company's fortunes during the pandemic.
Net profit rose 13% last year and the potential for growth remains strong given the expansion of the wealth market in Japan. 


Japan

LAWSON, INC. operates a chain of convenience stores in Japan. The Company sells a variety of products including fast food, beverages, snacks, magazines, newspapers, and sundry goods.

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Lawson Inc (2651 JP)

Rakuten’s Netsuper Expands with New Partners

Rakuten continues to maintain leadership in Japanese e-commerce against rivals Amazon and Z Holdings and could emerge as the top player in the...

Michael Causton

Lawson: Profitability to Expand with Slowing Growth Investments

As store renovations and MC Kitchen deployment slow, performance gains from growth investments have started to outweigh the immediate renovation...

Oshadhi Kumarasiri

Top Japanese Convenience Store Chains Rebound in FY2021

Japanese convenience store chains posted higher sales in 2021 after a tough 2020 but the outlook remains uncertain given saturation and new forms...

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

Lawson Considering IPO for Seijo Ishii

Lawson may arrange an IPO for its upscale supermarket subsidiary Seijo Ishii, a popular retailer which has doubled in size in the last decade and...

Michael Causton

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