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

The convenience store sector (CVS) is Japan’s most successful retail format and one that has now enjoyed almost 50 years of growth. So the sudden and unprecedented sales declines in 2020, caused by so many people staying away from city centres during the pandemic, are an entirely new test for the sector.Temporary blips aside, this leading position is likely to endure a little longer. Even with e-commerce growing faster and likely to over take CVS as the biggest channel by 2025, CVS will take on a prominent role in the fulfilment model used by many e-commerce companies.In the CVS sector itself, Familymart's delisting and new role spearheading Itochu's retail interests will cause ructions in a sector that has reached saturation and where increased competition will force more change and differentiation.The following is an in-depth review of the state of play in Japan's convenience store sector following the absorption of <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">FamilyMart Co Ltd (8028 JP)</a> by <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>. The review includes:<ul>
<li>Full rankings of all convenience stores including sales, stores, market share, key metrics like sales per store per day etc.</li>
<li>Analysis of the current and future prospects of the big three and the outlook for the smaller players – as much targets for the big three than anything else.</li>
<li>Details on e-commerce initiatives (or the lack of them), store coverage, diversification strategies etc.</li>
<li>Updates on the pressure points of the labour shortage and franchisee rebellions.</li>
</ul>This insight provides a complete review of the sector and a clear picture of where convenience stores are headed in the next three years.

The convenience store sector (CVS) is Japan’s most successful retail format and one that has now enjoyed almost 50 years of growth. So the sudden and unprecedented sales declines in 2020, caused by so many people staying away from city centres during the pandemic, are an entirely new test for the sector.Temporary blips aside, this leading position is likely to endure a little longer. Even with e-commerce growing faster and likely to over take CVS as the biggest channel by 2025, CVS will take on a prominent role in the fulfilment model used by many e-commerce companies.In the CVS sector itself, Familymart's delisting and new role spearheading Itochu's retail interests will cause ructions in a sector that has reached saturation and where increased competition will force more change and differentiation.The following is an in-depth review of the state of play in Japan's convenience store sector following the absorption of FamilyMart Co Ltd (8028 JP) by Itochu Corp (8001 JP). The review includes:
Full rankings of all convenience stores including sales, stores, market share, key metrics like sales per store per day etc.
Analysis of the current and future prospects of the big three and the outlook for the smaller players – as much targets for the big three than anything else.
Details on e-commerce initiatives (or the lack of them), store coverage, diversification strategies etc.
Updates on the pressure points of the labour shortage and franchisee rebellions.
This insight provides a complete review of the sector and a clear picture of where convenience stores are headed in the next three years.

Convenience Stores: Diversification and a Fight for Share as Familymart Delists

Thematic (Sector/Industry)

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> in its partnership with <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)'s </a>supermarket affiliate, <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a> Others like <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> are also investing for the long-term and even <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by Amazon.com Inc (AMZN US) in its partnership with Mitsubishi Corp (8058 JP)'s supermarket affiliate, Life Corp (8194 JP). Others like Aeon Co Ltd (8267 JP) and Rakuten Inc (4755 JP) are also investing for the long-term and even Seven &amp; I Holdings (3382 JP) is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

Online Food Demand Brings New Ideas and Innovations

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:
<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>
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>.

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

Event-Driven

<a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> has completed its buyout of Familymart (see <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy's</a> insights <a href="https://www.smartkarma.com/insights/itochu-gets-the-famima-hunnypot-and-now-things-get-funky" target="_blank" rel="noopener">here</a>, <a href="https://www.smartkarma.com/insights/itochu-haz-opinionz-about-familymart" target="_blank" rel="noopener">here</a>, <a href="https://www.smartkarma.com/insights/japan-needs-more-cowbell" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/the-amended-familymart-document-is-a-must-read-for-investor-stewards" target="_blank" rel="noopener">here</a>). Itochu has clearly taken full advantage of a depressed Familymart share price and an opportunity for the trading house to begin more adventurous diversification of the convenience store business.
This will include moving into more types of food format, including its nascent hybrid store collaborations with supermarkets and drugstores and an upcoming push into e-commerce, but will also mean more integration with Itochu's food wholesale business – which when combined is bigger than that of its arch rival, <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP).</a>
Mitsubishi and Itochu have been playing catch-up with each other for the last two decades in a race to build Japan's first integrated food wholesale-retail businesses.
Now that Itochu has succeeded in its bid, the question remains whether Mitsubishi will now look to consolidate its own food retail assets like <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a> and <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a>

Itochu Corp (8001 JP) has completed its buyout of Familymart (see Travis Lundy's insights here, here, here and here). Itochu has clearly taken full advantage of a depressed Familymart share price and an opportunity for the trading house to begin more adventurous diversification of the convenience store business.
This will include moving into more types of food format, including its nascent hybrid store collaborations with supermarkets and drugstores and an upcoming push into e-commerce, but will also mean more integration with Itochu's food wholesale business – which when combined is bigger than that of its arch rival, Mitsubishi Corp (8058 JP).
Mitsubishi and Itochu have been playing catch-up with each other for the last two decades in a race to build Japan's first integrated food wholesale-retail businesses.
Now that Itochu has succeeded in its bid, the question remains whether Mitsubishi will now look to consolidate its own food retail assets like Lawson Inc (2651 JP) and Life Corp (8194 JP).

Familymart: What's Next? And Will Mitsubishi React?

'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.

• BEST &amp; WORST •Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life (8194 JP)</a> and parking lot operator <a href="https://www.smartkarma.com/entities/park24-co-ltd" target="_blank" data-smartkarma-citation="entities:5622:1" rel="noopener">Park24 (4666 JP)</a>. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/223/original/2020-09-16_04-25-58.png?1600198055" class="editor-image img-responsive" data-smartkarma-image-id="159223"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/159/224/original/2020-09-16_04-31-11.png?1600198284" class="editor-image img-responsive" data-smartkarma-image-id="159224"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div><hr><div>DAILY STATS</div><hr><div>PERCENTAGES -57% of quarterly results, 54% of annual forecasts/revisions and 44% of interim forecasts have negative Scores. 57% of companies reporting lost money for the quarter. </div><div>7 Quarterly Results</div><div><ul style="list-style-type: disc;">
<li>
Results Score: 29% Positive / 14% Neutral / 57% Negative</li>
<li>
Average Results Score Change: -1.7 points</li>
<li>
Average % Change in Revenue: +6.6% Quarter YoY / +12.5% Rolling TTM YoY </li>
<li>
Average Operating Profit Margin Change: -2.6ppt</li>
<li>
Percentage Making Quarterly Losses: 57%</li>
</ul></div><hr><div>13 Annual • 9 Interim Forecasts/Revisions</div><div><ul style="list-style-type: disc;">
<li>
Annual Forecast/Revision Score: 46% Positive / 0% Neutral / 54% Negative</li>
<li>
Interim Forecast/Revision Score Change: 56% Positive / 0% Neutral / 44% Negative</li>
<li>
Average Forecast/Revision Score Change: +0.5 points</li>
</ul></div>

• BEST &amp; WORST •Our 'best' and 'worst' pairing from yesterday's announcements is food and drink retailer Life (8194 JP) and parking lot operator Park24 (4666 JP). Source for all charts &amp; tables: Japan AnalyticsDAILY STATSPERCENTAGES -57% of quarterly results, 54% of annual forecasts/revisions and 44% of interim forecasts have negative Scores. 57% of companies reporting lost money for the quarter. 7 Quarterly Results

Results Score: 29% Positive / 14% Neutral / 57% Negative

Average Results Score Change: -1.7 points

Average % Change in Revenue: +6.6% Quarter YoY / +12.5% Rolling TTM YoY 

Average Operating Profit Margin Change: -2.6ppt

Percentage Making Quarterly Losses: 57%
13 Annual • 9 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 46% Positive / 0% Neutral / 54% Negative

Interim Forecast/Revision Score Change: 56% Positive / 0% Neutral / 44% Negative

Average Forecast/Revision Score Change: +0.5 points


🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​15  -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

Japan

LIFE CORPORATION operates a supermarket chain mainly in Kansai and Kanto areas. The Company sells mainly groceries, and also clothing, and household utensils.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Life Corp (8194 JP)

Online Food Demand Brings New Ideas and Innovations

E-commerce has less than 3% share of food retailing in Japan but this is about to change and fast. Amazon/Life is leading but Aeon, Rakuten and...

Michael Causton

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

Familymart: What's Next? And Will Mitsubishi React?

Itochu initiated a buyout for an additional 10% of Familymart shares over the summer. The move is widely seen as Itochu taking full advantage of a...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 09/15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

• BEST WORST •

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Convenience Stores: Diversification and a Fight for Share as Familymart Delists

If you are looking for a full in-depth review and analysis of Japan's convenience stores sector and how things will shape up now that Familymart is...

Michael Causton

Online Food Demand Brings New Ideas and Innovations

E-commerce has less than 3% share of food retailing in Japan but this is about to change and fast. Amazon/Life is leading but Aeon, Rakuten and...

Michael Causton

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

Familymart: What's Next? And Will Mitsubishi React?

Itochu initiated a buyout for an additional 10% of Familymart shares over the summer. The move is widely seen as Itochu taking full advantage of a...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 09/​​​​​​​15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼

• BEST WORST •

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/15 -Park[24]ing Woes, Life in Life | Keiyo▲, Palma▼