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)

All leading supermarkets saw sales improve in FY2020 as shoppers stayed away from competing formats and profits also surged.However, while the changes confirmed stability among the largest companies and a handful of medium-sized chains, the sudden surge in profits among low-margin chains could be short-lived once shoppers become more mobile again and return to other options for their food needs.The gap between the best and rest will widen, spurring consolidation as the leaders grab more market share in new territories.

All leading supermarkets saw sales improve in FY2020 as shoppers stayed away from competing formats and profits also surged.However, while the changes confirmed stability among the largest companies and a handful of medium-sized chains, the sudden surge in profits among low-margin chains could be short-lived once shoppers become more mobile again and return to other options for their food needs.The gap between the best and rest will widen, spurring consolidation as the leaders grab more market share in new territories.

Leading Supermarkets Have a Great Year but Gap Widens Between Best and Rest

Supermarkets were much better prepared for Japan’s second state of emergency compared to the first last Spring. Most now have systems in place, both to make shopping safe and quick in stores, but also to offer a robust online ordering model.There is now an opportunity for the best mid-sized chains to shine, with companies like Yaoko suggesting those customers used to ordering at the bigger online stores are switching to ordering from local chains.

Supermarkets were much better prepared for Japan’s second state of emergency compared to the first last Spring. Most now have systems in place, both to make shopping safe and quick in stores, but also to offer a robust online ordering model.There is now an opportunity for the best mid-sized chains to shine, with companies like Yaoko suggesting those customers used to ordering at the bigger online stores are switching to ordering from local chains.

2nd Emergency Means New Opportunities for Supermarkets

'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.

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/174/original/File%202020-04-16%206%2023%2053.jpeg?1586985893" class="editor-image img-responsive" data-smartkarma-image-id="128174"></figure><div class="content-caption">Source • Tokyo Metropolitan Government</div>FLATTENING - Tokyo saw 127 new confirmed cases of COVID-19 yesterday, 35% below the peak number of 197. The rolling 7-day average number of cases is now flattening out. For Japan, the case count rose by 315, 56% below the peak of April 12th. The number of nationwide deaths rose by seven to 169 for a CFR of 2.0. Due to the lagging effect, the number of fatalities and can be expected to stay in double-digits, particularly as more care homes become infected. BUREAUCRACY - Over 47,000 businesses in Tokyo have consulted labour bureaus concerning the government's 'employment adjustment subsidy', and 2,859 applications have been submitted. Of these, 214 applications have been submitted, but just two have so far received subsidies.  Similar delays have been reported in other prefectures. These delays, as well as the controversy over the exclusion of the self-employed, have prompted the heads of the LDP and Komeito coalition parties to call for an immediate ¥100,000 cash transfer to all citizens.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/175/original/2020-04-16_06-51-02.png?1586987506" class="editor-image img-responsive" data-smartkarma-image-id="128175"></figure><div class="content-caption">Source • JNTO</div>INBOUND - Tourist arrivals are now down 93% year-on-year putting the government's target of 40m visitors and their ¥8t of spending this year under a cloud. Perhaps the more interesting question is who and from where were the 194,000 tourists who entered Japan last month?<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/128/181/original/2020-04-16_07-39-54.png?1586990425" class="editor-image img-responsive" data-smartkarma-image-id="128181"></figure><div class="content-caption">Source • Japan Analytics</div>BOJ STEPPING UP - Interestingly, the Bank of Japan intervened yesterday despite the market not falling at any point below the levels reached the previous day. The percentage of value traded remains high at 4.76%. In the DETAIL below, we shall review the results, revisions and initial forecast announcements made yesterday. As we are winding down the first wave of reports, we have reverted to covering all companies rather than just the large-caps. The positive/neutral/negative balance for the five results was 1:0:4; and for the 19 revisions/forecasts, the split was 8:1:10. Only one of the three companies announcing full-year results did not make a forecast for the current year.SFI TRANSMISSION - Lastly, we would recommend a <a href="https://www.santafe.edu/research/projects/transmission-sfi-insights-covid-19" target="_blank" rel="noopener">series</a> of short papers from the Santa Fe Institute on the COVID-19 pandemic from the perspective of complexity science and in particular this <a href="https://sfi-edu.s3.amazonaws.com/sfi-edu/production/uploads/ckeditor/2020/04/08/t-010-miller.pdf" target="_blank" rel="noopener">contribution</a> from renowned value manager, Bill Miller which opens as follows:-<blockquote>There have been four great stock market buying opportunities in my lifetime. This is the fifth Bill Miller, Miller Value Partners</blockquote>

Source • Tokyo Metropolitan GovernmentFLATTENING - Tokyo saw 127 new confirmed cases of COVID-19 yesterday, 35% below the peak number of 197. The rolling 7-day average number of cases is now flattening out. For Japan, the case count rose by 315, 56% below the peak of April 12th. The number of nationwide deaths rose by seven to 169 for a CFR of 2.0. Due to the lagging effect, the number of fatalities and can be expected to stay in double-digits, particularly as more care homes become infected. BUREAUCRACY - Over 47,000 businesses in Tokyo have consulted labour bureaus concerning the government's 'employment adjustment subsidy', and 2,859 applications have been submitted. Of these, 214 applications have been submitted, but just two have so far received subsidies.  Similar delays have been reported in other prefectures. These delays, as well as the controversy over the exclusion of the self-employed, have prompted the heads of the LDP and Komeito coalition parties to call for an immediate ¥100,000 cash transfer to all citizens.Source • JNTOINBOUND - Tourist arrivals are now down 93% year-on-year putting the government's target of 40m visitors and their ¥8t of spending this year under a cloud. Perhaps the more interesting question is who and from where were the 194,000 tourists who entered Japan last month?Source • Japan AnalyticsBOJ STEPPING UP - Interestingly, the Bank of Japan intervened yesterday despite the market not falling at any point below the levels reached the previous day. The percentage of value traded remains high at 4.76%. In the DETAIL below, we shall review the results, revisions and initial forecast announcements made yesterday. As we are winding down the first wave of reports, we have reverted to covering all companies rather than just the large-caps. The positive/neutral/negative balance for the five results was 1:0:4; and for the 19 revisions/forecasts, the split was 8:1:10. Only one of the three companies announcing full-year results did not make a forecast for the current year.SFI TRANSMISSION - Lastly, we would recommend a series of short papers from the Santa Fe Institute on the COVID-19 pandemic from the perspective of complexity science and in particular this contribution from renowned value manager, Bill Miller which opens as follows:-There have been four great stock market buying opportunities in my lifetime. This is the fifth Bill Miller, Miller Value Partners

🇯🇵 JAPAN • Revisions & Results 15th April - Flattening

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/izumi-co-ltd" target="_blank" data-smartkarma-citation="entities:13173:1" rel="noopener">Izumi Co Ltd (8273 JP)</a> has taken a 20% share in <a href="https://www.smartkarma.com/entities/maruyoshi-center-inc" target="_blank" data-smartkarma-citation="entities:6892:1" rel="noopener">Maruyoshi Center (7515 JP)</a>, the last major independent supermarket chain in Shikoku.
Coupled with Izumi’s new partnership with Seven &amp; I, the move opens up the battle lines between Izumi and <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> as the only two major FMCG retailers in southern Japan.

Izumi Co Ltd (8273 JP) has taken a 20% share in Maruyoshi Center (7515 JP), the last major independent supermarket chain in Shikoku.
Coupled with Izumi’s new partnership with Seven &amp; I, the move opens up the battle lines between Izumi and Aeon Co Ltd (8267 JP) as the only two major FMCG retailers in southern Japan.

Izumi and Maruyoshi Center Become Affiliates, Furthers Proxy War with Aeon

Japan

Maruyoshi Center Inc. operates a supermarket chain mainly in Kagawa Prefecture. The Company sells perishable foods and groceries.  Maruyoshi Center also operates a family restaurant chain named Green House.

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Maruyoshi Center (7515 JP)

Leading Supermarkets Have a Great Year but Gap Widens Between Best and Rest

Japanese supermarkets had a great year in 2020 thanks to Covid. However, the gap in performance is widening and more consolidation can be expected.

Michael Causton

2nd Emergency Means New Opportunities for Supermarkets

Japanese supermarkets suffered from genteel decline in the decade to 2020. And then Covid-19 forced everyone home, resulting in a propensity to...

Michael Causton

🇯🇵 JAPAN • Revisions & Results 15th April - Flattening

FLATTENING - Tokyo saw 127 new confirmed cases of COVID-19 yesterday, 35% below the peak number of 197. The rolling 7-day average number of cases...

Campbell Gunn

Izumi and Maruyoshi Center Become Affiliates, Furthers Proxy War with Aeon

Izumi Co Ltd (8273 JP) has taken a 20% share in Maruyoshi Center (7515 JP), the last major independent supermarket chain in Shikoku. Coupled with...

Michael Causton

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