In today’s briefing:
- Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi
- Ohayo Japan | Dow up 500 Points; EV Reliability Realities
- Conbini Wars: Seven Vs Lawson Vs Familymart
- Affordable Luxury: A Look Into Chinese Luxury (Part IV)
- Restaurant & Retail Roundup – Takeaways from RFDC
Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi
- Headwinds are turning to tailwinds for the Japanese Trading companies.
- Risks rising in the short term due to JPY strength, weakening commodity prices and the upcoming US recession.
- Massive outperformance over the last two years, most recently due to multiple expansion
Ohayo Japan | Dow up 500 Points; EV Reliability Realities
- Overseas: SPX +0.4%, Nasdaq -0.2%; Dow ends November with 9% gain; Salesforce shares up 9% on strong Q3 earnings
- Today: NKY Futs+0.2% v cash. JPY 146.2; Japan’s ranking in digital competitiveness slumps; 7&I buys Aussie franchise for $1bn
- JapanX: Japanese autos remain the most reliable – EVs far less reliable than conventional cars
Conbini Wars: Seven Vs Lawson Vs Familymart
- The big 3 convenience stores in Japan control 90% of the sector and share will climb as they mop up some of the remaining chains and collaborate with the rest.
- Seven Eleven is by far the best performer of the three but both Lawson and Familymart are innovating to create quite different retail operations.
- All are seeing the benefits of digitisation of store and supply chain operations, which should enhance profitability, enhanced by new services and revenue streams like retail media.
Affordable Luxury: A Look Into Chinese Luxury (Part IV)
- Thanks to the rapidly expanding middle class, increasing incomes, and a strong desire for luxury, Chinese consumers are often seen as the embodiment of the luxury industry’s promising future
- However, the market has seen competition intensify: Not only are international brands competing against each other, but the rise of domestic brands has brought the competitive landscape to another level
- Since this summer, investors have been concerned by a shifting Chinese landscape in the context of the current economic situation
Restaurant & Retail Roundup – Takeaways from RFDC
- Our monthly WTR restaurant and retail report focuses on stock performance, short interest, an outlook for restaurant commodity costs, our casual dining same-store sales (SSS) and traffic survey, and takeaways from the Restaurant Finance & Development Conference (RFDC) that occurred in mid-November.
- Retailers outperform and restaurants underperform indexes on a MTD basis. For November 2023, the performance reversed, with retailers outperforming the restaurants by a wide margin.
- On a month-to-date (MTD) basis, our equal-weighted index of restaurant stocks increased 6.2% following a decline of 4.2% in October, but below the S&P 500, which increased 8.6%.
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