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)

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The Polarising Pandemic in Japanese Retail

Home decoration consumption has been one of the few non-essential consumption categories to show consistent positive growth in the last few years. All types of brand and retailer have benefited but, since the start of the pandemic, it has been online stores and mass market retailers like <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP),</a><a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> and the home centre retailers that have performed best. The boost from Covid aside, increased spending on home decoration is a long-term trend, supporting further growth for the leading retailers well into the future.

Home decoration consumption has been one of the few non-essential consumption categories to show consistent positive growth in the last few years. All types of brand and retailer have benefited but, since the start of the pandemic, it has been online stores and mass market retailers like Nitori Holdings (9843 JP),Ryohin Keikaku (7453 JP) and the home centre retailers that have performed best. The boost from Covid aside, increased spending on home decoration is a long-term trend, supporting further growth for the leading retailers well into the future. 

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

Department store numbers have dropped by a third in the past 13 years to just 199 and another third are likely to disappear this decadeThe hope that many of these properties would find new life as shopping buildings is now looking far less likely and, with Covid worsening the problem, an accelerated hollowing out of central retail areas looks unavoidable in many small cities.We are likely to see department store numbers drop to around 150 over the next five years.The impact on both the department store sector and regional retailing is profound.

Department store numbers have dropped by a third in the past 13 years to just 199 and another third are likely to disappear this decadeThe hope that many of these properties would find new life as shopping buildings is now looking far less likely and, with Covid worsening the problem, an accelerated hollowing out of central retail areas looks unavoidable in many small cities.We are likely to see department store numbers drop to around 150 over the next five years.The impact on both the department store sector and regional retailing is profound.

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> had its 34th straight year of record results in FY2020 – and that’s before it has even begun to integrate its recent acquisition of <a href="https://www.smartkarma.com/entities/shimachu-co-ltd" target="_blank" data-smartkarma-citation="entities:5235:1" rel="noopener">Shimachu Co Ltd (8184 JP)</a>.
Last month, the largest furniture retailer confirmed further expansion into fashion and a new IKEA-like restaurant concept due to roll out in many of its larger stores.
Nitori is making progress online too; in FY2020, online membership grew 73% to 9.03 million users and Nitori expects to see 13 million users by the end of the current year.
It also plans to open more stores overseas after a pause in 2020 where the potential remains untapped.

Nitori Holdings (9843 JP) had its 34th straight year of record results in FY2020 – and that’s before it has even begun to integrate its recent acquisition of Shimachu Co Ltd (8184 JP).
Last month, the largest furniture retailer confirmed further expansion into fashion and a new IKEA-like restaurant concept due to roll out in many of its larger stores.
Nitori is making progress online too; in FY2020, online membership grew 73% to 9.03 million users and Nitori expects to see 13 million users by the end of the current year.
It also plans to open more stores overseas after a pause in 2020 where the potential remains untapped.

More Diversification to Come as Nitori Chases ¥1 Trillion

'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.

• RESULTS - 31st MARCH •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/450/original/image_34417378121617226031453.png?1617226032" class="editor-image img-responsive" data-smartkarma-image-id="198450"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics  </div>RESULTS - Only 5 out of nine of yesterday's results scored positively. The largest cap to report <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a> saw the largest negative change.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/452/original/image_17536353141617226688099.png?1617226688" class="editor-image img-responsive" data-smartkarma-image-id="198452"></figure>• FORECASTS/REVISIONS - 31st MARCH •  <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/451/original/image_60108354431617226572225.png?1617226572" class="editor-image img-responsive" data-smartkarma-image-id="198451"></figure>FORECASTS/REVISIONS - Of the 10 annual forecasts and revisions, only half scored positively. The DETAIL Section below focuses on <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a>, <a href="https://www.smartkarma.com/entities/kawasaki-heavy-industries" target="_blank" data-smartkarma-citation="entities:8790:1" rel="noopener">Kawasaki Heavy Industries (7012 JP)</a>, and <a href="https://www.smartkarma.com/entities/hankyu-hanshin-holdings-inc" target="_blank" data-smartkarma-citation="entities:13058:1" rel="noopener">Hankyu Hanshin (9042 JP)</a>.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/453/original/image_25686156251617226730677.png?1617226731" class="editor-image img-responsive" data-smartkarma-image-id="198453"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/454/original/image_94245619961617226769457.png?1617226770" class="editor-image img-responsive" data-smartkarma-image-id="198454"></figure>

• RESULTS - 31st MARCH •Source for all charts &amp; tables: Japan Analytics  RESULTS - Only 5 out of nine of yesterday's results scored positively. The largest cap to report Nitori (9843 JP) saw the largest negative change.• FORECASTS/REVISIONS - 31st MARCH •  FORECASTS/REVISIONS - Of the 10 annual forecasts and revisions, only half scored positively. The DETAIL Section below focuses on Nitori (9843 JP), Kawasaki Heavy Industries (7012 JP), and Hankyu Hanshin (9042 JP).

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​​​​31 - Nitori, KHI & Hankyu Hanshin

Japan

Nitori Holdings Co., Ltd., is based in Hokkaido and operates a furniture retail chain.  The Company sells living room furniture, storage furniture, dining furniture, office furniture, beds, and interior goods.  Nitori Holdings also sells original brand merchandise and imported merchandise.

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Nitori Holdings (9843 JP)

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

The big home interiors retailers like Nitori and Muji as well as the home centre chains are doing well thanks to the expansion of the home decor...

Michael Causton

The Japanese Department Store Debacle

The Japanese department sector has been in retreat for a long time but the decline accelerated from the start of Covid. Unfortunately, an end to...

Michael Causton

More Diversification to Come as Nitori Chases ¥1 Trillion

Nitori looks saturated to some but we believe there are lots of potential areas where the interiors retailer can expand, including its nascent...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/31 - Nitori, KHI & Hankyu Hanshin

RESULTS - Only 5 out of nine of yesterday's results scored positively. The largest cap to report Nitori (9843 JP) saw the largest negative change.

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

The big home interiors retailers like Nitori and Muji as well as the home centre chains are doing well thanks to the expansion of the home decor...

Michael Causton

The Japanese Department Store Debacle

The Japanese department sector has been in retreat for a long time but the decline accelerated from the start of Covid. Unfortunately, an end to...

Michael Causton

More Diversification to Come as Nitori Chases ¥1 Trillion

Nitori looks saturated to some but we believe there are lots of potential areas where the interiors retailer can expand, including its nascent...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/​​​​​​​​​​31 - Nitori, KHI & Hankyu Hanshin

RESULTS - Only 5 out of nine of yesterday's results scored positively. The largest cap to report Nitori (9843 JP) saw the largest negative change.

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 03/31 - Nitori, KHI & Hankyu Hanshin