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

Pan Pacific International Holdings / Equity Bottom-Up

The pandemic led to slower growth at <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a> last year, but the country’s largest discounter still managed an improved performance thanks to ongoing turnaround of stores acquired from Uny and expansion overseas.

The pandemic led to slower growth at Pan Pacific International Holdings (7532 JP) last year, but the country’s largest discounter still managed an improved performance thanks to ongoing turnaround of stores acquired from Uny and expansion overseas.

Don Quijote: Slower Growth, Better Stores

Thematic (Sector/Industry)

The desire for home improvement was already building well before the pandemic but Japanese have turned to home decoration like never before since March 2020 as long days at home led to demand for more comfort and better aesthetics. With visits to physical stores currently something of a challenge, online sources have boomed, including new subscription rental services. While <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> is a beneficiary of this trend, competitors have also seen sharp gains in volume, suggesting further new competition for the dominant player. Lowya for example is now expecting compound annual growth (CAGR) of between 21-26% over the next five years, with a forecast ¥60 billion in GTVs in 2026.

The desire for home improvement was already building well before the pandemic but Japanese have turned to home decoration like never before since March 2020 as long days at home led to demand for more comfort and better aesthetics. With visits to physical stores currently something of a challenge, online sources have boomed, including new subscription rental services. While Nitori Holdings (9843 JP) is a beneficiary of this trend, competitors have also seen sharp gains in volume, suggesting further new competition for the dominant player. Lowya for example is now expecting compound annual growth (CAGR) of between 21-26% over the next five years, with a forecast ¥60 billion in GTVs in 2026.

Competition for Nitori: Online Furniture Sales Surge

IKEA’s stores, like many non-essential retailers, will have had a tough year, but with three new, smaller format stores opening in Tokyo in the past 18 months, the Swedish furniture chain has shown that it still has a lot to offer. Although it remains far behind sector leader, <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> it is a sign of improving competition.

IKEA’s stores, like many non-essential retailers, will have had a tough year, but with three new, smaller format stores opening in Tokyo in the past 18 months, the Swedish furniture chain has shown that it still has a lot to offer. Although it remains far behind sector leader, Nitori Holdings (9843 JP), it is a sign of improving competition.

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

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)

Don Quijote: Slower Growth, Better Stores

Don Quijote remains a solid bet. At home, its staples discounting offers guaranteed growth given the buoyancy of discount demand and overseas,...

Michael Causton

Competition for Nitori: Online Furniture Sales Surge

Nitori remains number one by far and its own e-commerce site is doing well but other online-only stores have seen fast growth, creating new forms...

Michael Causton

IKEA Japan’s Comeback

Nitori has faced little competition on its rise to dominance in Japanese home retailing after it squashed IKEA after the latter's entry in 2006 but...

Michael Causton

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

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