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

Tokushimaru started as a local mobile supermarket in Shikoku but, since being made a subsidiary of <a href="https://www.smartkarma.com/entities/oisix-ra-daichi-inc" target="_blank" data-smartkarma-citation="entities:10145:1" rel="noopener">Oisix ra daichi (3182 JP)</a> in 2016, has become a nationwide network of vans franchised by a growing number of supermarkets.Almost all of its customers are elderly – Japan's fastest growing population segment – and it takes pride in serving communities.Now, with <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> Ito-Yokado planning to add most of its store network to the system, Tokushimaru will grow even faster.There are currently around 700 Tokushimaru vans in operation and it expects to hit 1,000 this Spring, with a long-term goal of 5,000.As reported <a href="https://www.smartkarma.com/insights/mobile-shops-and-flexible-delivery" target="_blank" rel="noopener">before on Smartkarma</a>, shops-on-wheels is becoming a major new trend as retailers seek out customers where they are rather than waiting for them to come to their stores.

Tokushimaru started as a local mobile supermarket in Shikoku but, since being made a subsidiary of Oisix ra daichi (3182 JP) in 2016, has become a nationwide network of vans franchised by a growing number of supermarkets.Almost all of its customers are elderly – Japan's fastest growing population segment – and it takes pride in serving communities.Now, with Seven &amp; I Holdings' (3382 JP) Ito-Yokado planning to add most of its store network to the system, Tokushimaru will grow even faster.There are currently around 700 Tokushimaru vans in operation and it expects to hit 1,000 this Spring, with a long-term goal of 5,000.As reported before on Smartkarma, shops-on-wheels is becoming a major new trend as retailers seek out customers where they are rather than waiting for them to come to their stores. 

Thematic (Sector/Industry)

Just a month after <a href="https://www.smartkarma.com/entities/meganesuper-co-ltd" target="_blank" data-smartkarma-citation="entities:14070:1" rel="noopener">Meganesuper (3318 JP)</a> said it was switching from opening new physical stores to mobile ones, other retailers are following suit. With Covid-19 infections reaching new records in Japan in December, taking the shop to the consumers is looking like an attractive option, rather than hoping that a few might make it out to stores,  and a visiting store-in-a-truck should help less mobile customers too.

Just a month after Meganesuper (3318 JP) said it was switching from opening new physical stores to mobile ones, other retailers are following suit. With Covid-19 infections reaching new records in Japan in December, taking the shop to the consumers is looking like an attractive option, rather than hoping that a few might make it out to stores,  and a visiting store-in-a-truck should help less mobile customers too. 

<a href="https://www.smartkarma.com/entities/yaoko-co-ltd" target="_blank" data-smartkarma-citation="entities:1419:1" rel="noopener">Yaoko Co Ltd (8279 JP)</a> will again post record revenues and profit for FY2020 to March next year, but the top supermarket is worried that FY2021 will see a reversal of its fortunes.A boom in fresh food retailing is one of the few positives to emerge out of the Covid crisis, but with no end in sight, shoppers are beginning to stay away.It is one of the few supermarkets with the financial strength to weather an extended downturn, but even Yaoko is preparing for harder times.Despite good financial performance so far this year, Yaoko’s caution is typical of the company and one reason why it leads the sector on so many measures. It has a breakeven point ratio of 84.9%, meaning that it can afford to see sales drop as much as 15.1% before it falls into the red in relation to operating costs.

Yaoko Co Ltd (8279 JP) will again post record revenues and profit for FY2020 to March next year, but the top supermarket is worried that FY2021 will see a reversal of its fortunes.A boom in fresh food retailing is one of the few positives to emerge out of the Covid crisis, but with no end in sight, shoppers are beginning to stay away.It is one of the few supermarkets with the financial strength to weather an extended downturn, but even Yaoko is preparing for harder times.Despite good financial performance so far this year, Yaoko’s caution is typical of the company and one reason why it leads the sector on so many measures. It has a breakeven point ratio of 84.9%, meaning that it can afford to see sales drop as much as 15.1% before it falls into the red in relation to operating costs.

Yaoko: A Difficult 2021 Coming for Japanese Supermarkets

Major eyewear retailer <a href="https://www.smartkarma.com/entities/meganesuper-co-ltd" target="_blank" data-smartkarma-citation="entities:14070:1" rel="noopener">Meganesuper (3318 JP)</a>, has announced it is switching from physical stores to mobile shops mounted on trucks. By the end of 2023, Megane Super wants 110 trucks in service across the country.
Supermarkets and others are also trying this idea with growing success but this is the first case of an eyewear company and, we think, the first where the retailer says it no longer expects to open physical stores.
Initial results suggest the trucks work very well, with far lower set-up and operating costs, but with sales equivalent to some of the chain’s best immobile shops, potentially resulting in a significant uptick in operating margins.

Major eyewear retailer Meganesuper (3318 JP), has announced it is switching from physical stores to mobile shops mounted on trucks. By the end of 2023, Megane Super wants 110 trucks in service across the country.
Supermarkets and others are also trying this idea with growing success but this is the first case of an eyewear company and, we think, the first where the retailer says it no longer expects to open physical stores.
Initial results suggest the trucks work very well, with far lower set-up and operating costs, but with sales equivalent to some of the chain’s best immobile shops, potentially resulting in a significant uptick in operating margins.

Megane Super: Shops on Wheels Are the Future

Event-Driven

Walmart’s 18-year attempt to build a business in Japan ended last month when the US retailer announced it would sell 85% of its stake in Seiyu to KKR and Rakuten.Seiyu has been transformed under Walmart’s leadership although it is much smaller than when Walmart arrived.Now, with <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</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> taking over, the hope is Seiyu could re-emerge as a leader in food e-commerce under Rakuten.The Seiyu chain could transform Rakuten’s logistics capability, allowing it to offer a comprehensive click &amp; collect service as well as use redundant store space for dark store fulfilment.What the new partners cannot afford to do is dither. Japan may well have room for more than one major online food retailer but just a couple of leaders will command the lion’s share.  <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>’s partnership with <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP)</a>, <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>’s Lohaco, <a href="https://www.smartkarma.com/entities/oisix-ra-daichi-inc" target="_blank" data-smartkarma-citation="entities:10145:1" rel="noopener">Oisix ra daichi (3182 JP)</a>, and, at some point, <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><a href="https://www.smartkarma.com/entities/ocado-group-plc" target="_blank" data-smartkarma-citation="entities:22067:1" rel="noopener">Ocado Group PLC (OCDO LN)</a> are the ones to beat.Already the deal is causing a significant upset in supermarket and GMS retailing.

Walmart’s 18-year attempt to build a business in Japan ended last month when the US retailer announced it would sell 85% of its stake in Seiyu to KKR and Rakuten.Seiyu has been transformed under Walmart’s leadership although it is much smaller than when Walmart arrived.Now, with KKR &amp; Co Inc (KKR US) and Rakuten Inc (4755 JP) taking over, the hope is Seiyu could re-emerge as a leader in food e-commerce under Rakuten.The Seiyu chain could transform Rakuten’s logistics capability, allowing it to offer a comprehensive click &amp; collect service as well as use redundant store space for dark store fulfilment.What the new partners cannot afford to do is dither. Japan may well have room for more than one major online food retailer but just a couple of leaders will command the lion’s share.  Amazon.com Inc (AMZN US)’s partnership with Life Corp (8194 JP), Z Holdings (4689 JP)’s Lohaco, Oisix ra daichi (3182 JP), and, at some point, Aeon Co Ltd (8267 JP)/Ocado Group PLC (OCDO LN) are the ones to beat.Already the deal is causing a significant upset in supermarket and GMS retailing.

KKR & Rakuten Ignite Online Food Battle with Seiyu Purchase

Japan

Oisix ra daichi Inc. sells various food products online. Among other products, the company sells vegetables, fruits, fish, meat, milk, and ready-made food.

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Oisix ra daichi (3182 JP)

Tokushimaru: Oisix's Mobile Super Star

Shops-on-wheels is coming of age in Japan. Oisix is leading the charge through its Tokushimaru subsidiary which also happens to target Japan's...

Michael Causton

Mobile Shops and Flexible Delivery

Mobile stores are an increasing phenomenon in Japan. They are a solution to Japan's ageing population but also allow retailers to take their wares...

Michael Causton

Yaoko: A Difficult 2021 Coming for Japanese Supermarkets

Yaoko is one of the best managed supermarkets in Japan but even this leading retailer is worried about the outlook for Japanese supermarkets. If it...

Michael Causton

Megane Super: Shops on Wheels Are the Future

All retailers are investing in online and closing stores but in Japan, combining online with mobile shops in trucks allows customers to try before...

Michael Causton

KKR & Rakuten Ignite Online Food Battle with Seiyu Purchase

E-commerce has less than 3% share of Japanese food retailing. This will change dramatically in the next 3 years, led by Amazon but also by Rakuten...

Michael Causton

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