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

<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>  has begun the rollout of a completely updated private brand, along with new ranges of regional gourmet foods. The move brings Lawson back into the race against Seven &amp; I's preeminent private brand, Seven Premium and adds to other new initiatives like its new partnership with Muji and Lawson Bank which should provide new sources of income and higher margins in the next two years.

Lawson Inc (2651 JP)  has begun the rollout of a completely updated private brand, along with new ranges of regional gourmet foods. The move brings Lawson back into the race against Seven &amp; I's preeminent private brand, Seven Premium and adds to other new initiatives like its new partnership with Muji and Lawson Bank which should provide new sources of income and higher margins in the next two years.

Thematic (Sector/Industry)

The convenience store sector is today the single largest channel in Japanese retailing. Combining both merchandise and digital services, e-commerce generates more revenues overall, but for merchandise alone, the ‘conbini’ or ‘CVS’ sector is still ¥2 trillion larger.It is also the most concentrated of any in retailing, with just three major companies and, depending on how you look at it, the most profitable. There is every chance that the dynamic nature of convenience retailing, along with its close integration with Japanese work practices and society as a whole, will provide room for further growth in the medium-term, but the current growth rate is about to slow.FY2019 marks the first reduction in new store opening plans among the top three chains for more than a decade, and investment is now shifting to existing stores and new ideas to ensure continued customer interest.

The convenience store sector is today the single largest channel in Japanese retailing. Combining both merchandise and digital services, e-commerce generates more revenues overall, but for merchandise alone, the ‘conbini’ or ‘CVS’ sector is still ¥2 trillion larger.It is also the most concentrated of any in retailing, with just three major companies and, depending on how you look at it, the most profitable. There is every chance that the dynamic nature of convenience retailing, along with its close integration with Japanese work practices and society as a whole, will provide room for further growth in the medium-term, but the current growth rate is about to slow.FY2019 marks the first reduction in new store opening plans among the top three chains for more than a decade, and investment is now shifting to existing stores and new ideas to ensure continued customer interest.

Convenience Stores: Saturation but Still Growth for Some

24-7 operation in convenience stores is suddenly a big issue. With even the government backing change, the big three convenience stores operators have no choice but to revise their franchise contracts.
The labour shortage crisis will impact all parts of the distribution system in the next five years but convenience stores are facing it first and will provide some of the solutions too.

24-7 operation in convenience stores is suddenly a big issue. With even the government backing change, the big three convenience stores operators have no choice but to revise their franchise contracts.
The labour shortage crisis will impact all parts of the distribution system in the next five years but convenience stores are facing it first and will provide some of the solutions too.

Japanese Government Pressure Behind Convenience Store Rethink

The following is an in-depth review of the big three Japanese convenience store (CVS) players, Seven Eleven (<a href="https://www.smartkarma.com/entities/1041" target="_blank" data-smartkarma-citation="entities:1041:1">Seven &amp; I Holdings (3382 JP)</a>), <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">Familymart (8028 JP)</a> and <a href="https://www.smartkarma.com/entities/1040" target="_blank" data-smartkarma-citation="entities:1040:1">Lawson Inc (2651 JP)</a>. This follows <a href="https://www.smartkarma.com/insights/japan-convenience-stores-still-innovating-in-a-saturated-market" target="_blank">our review of the Japanese convenience store sector overall</a>, which is best to read first.
The key operational and strategic themes relevant to investors regarding the Big Three in Japan:
<ul class="">
<li>Saturation has encouraged the top three operators to take over the remaining smaller chains while pushing into regions where they have fewer stores.</li>
<li>All are expanding new forms of retail:
<ul>
<li>Seven Eleven and Lawson have launched new e-commerce ventures that make the best use of their existing store networks and could reach national coverage quite soon.</li>
<li>Diversification: Familymart, in particular, is tying with all manner of partners to try and come up with a hit hybrid format to find new growth.</li>
</ul>
</li>
<li>While competition from drugstores and discount food retailers is a threat, convenience stores will continue to find new growth from e-commerce, hybrid stores and innovative products.</li>
</ul>

The following is an in-depth review of the big three Japanese convenience store (CVS) players, Seven Eleven (Seven &amp; I Holdings (3382 JP)), Familymart (8028 JP) and Lawson Inc (2651 JP). This follows our review of the Japanese convenience store sector overall, which is best to read first.
The key operational and strategic themes relevant to investors regarding the Big Three in Japan:

Saturation has encouraged the top three operators to take over the remaining smaller chains while pushing into regions where they have fewer stores.
All are expanding new forms of retail:

Seven Eleven and Lawson have launched new e-commerce ventures that make the best use of their existing store networks and could reach national coverage quite soon.
Diversification: Familymart, in particular, is tying with all manner of partners to try and come up with a hit hybrid format to find new growth.


While competition from drugstores and discount food retailers is a threat, convenience stores will continue to find new growth from e-commerce, hybrid stores and innovative products.


Seven Eleven, Familymart and Lawson Find New Growth Strategies in Tighter Market

Japan

Three F Co., Ltd. operates a convenience store chain in metropolitan area.  The Company sells mainly foodstuffs including fast foods, beverages, and also sundries.

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Three F Co Ltd (7544 JP)

Lawson Relaunches Private Brand

Lawson Inc (2651 JP) has begun the rollout of a completely updated private brand, along with new ranges of regional gourmet foods. The move brings...

Michael Causton

Convenience Stores: Saturation but Still Growth for Some

The convenience store sector is today the single largest channel in Japanese retailing. Combining both merchandise and digital services, e-commerce...

Michael Causton

Japanese Government Pressure Behind Convenience Store Rethink

24-7 operation in convenience stores is suddenly a big issue. With even the government backing change, the big three convenience stores operators...

Michael Causton

Seven Eleven, Familymart and Lawson Find New Growth Strategies in Tighter Market

The following is an in-depth review of the big three Japanese convenience store (CVS) players, Seven Eleven (Seven & I Holdings (3382 JP)),...

Michael Causton

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

Lawson Relaunches Private Brand

Lawson Inc (2651 JP) has begun the rollout of a completely updated private brand, along with new ranges of regional gourmet foods. The move brings...

Michael Causton

Convenience Stores: Saturation but Still Growth for Some

The convenience store sector is today the single largest channel in Japanese retailing. Combining both merchandise and digital services, e-commerce...

Michael Causton

Japanese Government Pressure Behind Convenience Store Rethink

24-7 operation in convenience stores is suddenly a big issue. With even the government backing change, the big three convenience stores operators...

Michael Causton

Seven Eleven, Familymart and Lawson Find New Growth Strategies in Tighter Market

The following is an in-depth review of the big three Japanese convenience store (CVS) players, Seven Eleven (Seven & I Holdings (3382 JP)),...

Michael Causton