July-Aug 2016 Highlights

Sep 07

FOCUS
Retail Results FY2015: one of the best years for retailing since the 1980s
Japanese retailers had a remarkably good year in FY2015. Price increases helped of course but only three of the top 45 retail groups saw sales fall, and many posted sales in double digits. The strong performance was also across almost all formats and sectors, with the notable exception of GMS and consumers electronics. Almost all leading retailers enjoyed bumper profits too, backed by higher sales and determined efforts to cut costs, rationalise supply chains, and introduce more private label merchandise – a trend common across all retail formats. While there are worries about the consumer economy as a whole, big retail will continue to thrive in 2016 too thanks to still more market share to take from independents and inefficient rivals, expansion overseas, and growing e-commerce operations.

Nitori surges on home deco boom
There is no sign of Nitori slowing down, with few real competitors in sight. It is forecasting its 18th straight year of profit growth in FY2016 and continues to see sales rise strongly. Better, Nitori is fast diversifying its store portfolio, opening more inner city stores and more home decor stores, both of which are attracting a new type of clientele and widening its appeal even further.

Editorial: The best year for big retail in years

Prices fall again
Japan has more jobs than people, and the ratio is growing. This is the one piece of positive economic news to appear over the past few months, allowing the government to cling to the idea that wages will soon begin to rise. That is, however, despite all the evidence to the contrary, and in reality Japanese consumer markets increasingly look to be returning to deflation.

Workers’ budget squeeze continues
Wives control the family budget in Japan. With companies doggedly resisting wage hikes, bonuses likely to fall again, and fresh food prices up a lot, most wives have sifted the tea leaves and seen a bleak future ahead. First to get cut is their husbands’ pocket money.

Department stores add more self-managed fashion space
Department stores have been incrementally taking back control of their sales floors for the last five years, but the pace is accelerating as they become more confident in their buying skills. Takashimaya and Keihan are the latest to launch new branded sales floors.

Department store sales fall sharply as tourist sales decline
Sales have fallen for the past three months at department stores. While fluctuations are to be expected, the biggest concern is that while tourist footfall continues to rise, actual sales have fallen a lot. With many locals reigning in spending on baubles in the face of market concerns, department stores need tourist income more then ever.

DIY apartments boost home market
Japanese consumers are famous for having very little interest in Do-It-Yourself (DIY) home design and refitting. This lack of demand is partly due to the tradition of rebuilding houses every 20 years, but also notoriously strict housing contracts for both rented and even sometimes owned apartments. But now some landlords are encouraging tenants to do their own DIY decorating, good news for interiors businesses.

Aeon begins revival of OPA with two new SCs
Aeon made much of plans to shift from suburban SC development to city centre projects two years ago, but until now has only focused on bringing its Aeon brand of large format SCs to station areas in regional cities. With the merger of its various fashion building businesses, OPA, Vivre and Forus, now complete as of March, it is starting to invest in both new buildings and updating old ones – and they certainly need it.

Stripe Int’l’s new chain takes off
Stripe International (formerly Cross Company) launched a new chain for women in their 30s a few months ago and says the reaction has been fantastic. It is betting heavily on the new chain as a new growth engine, with 18 stores already open and plans 22 stores this Autumn alone. Just in time for its IPO this summer.

Japanese: ageing ever faster ever
The population census for 2015 shows that Japan is ageing even quicker than many expected. Having so many older people brings many actual and potential problems,and the country is only just beginning to face up to what might be needed. Among the young, while children make up less than 13% of the population, more and more women are working, giving hope for the economy, with women and seniors now outnumbering men in the workforce. Both trends will have a major impact on the Japanese retail and consumer economy in the next 10 years.

Aeon expands specialty chains
The future of the GMS format is bleak, with serious implications for apparel sales by retail groups that own them. Instead of giving up entirely, GMS operators are creating their own fashion and lifestyle specialty chains, often in niche areas, and mixing in services and product variety to create entertainment. GMS suppliers, seriously worried for their survival are doing the same, hoping to become tenants in vacated apparel floors when GMS are converted to neighbourhood SCs.

Rakuten closes foreign operations
Rakuten continues to downsize its international operations having already pulled out of online retailing in Asia earlier this year. Last month it announced the closure of its business in Austria, following closures in both the UK and Spain already. Its other online malls in Europe will remain, concentrating investment in France and Germany.

IN BRIEF
Kusuri no Aoki doubles sales and expects to double again by 2022
Lohaco introduces 30 minute delivery slots
Isetan-Mitsukoshi launches luxury online store
Isetan-Mitsukoshi to open Paris boutique
E-commerce up 7.6% in 2015, cross border e-commerce booming
OK Super to become Mitsubishi subsidiary?
Major brands and department stores set up sales professionals association
New SC in Roppongi this Autumn with Barneys New York as anchor
Narita sales jump 20% in 2016
Ito-Yokado plans 100 Bon Bon Home stores
Itochu signs license for Rizap
Toys R Us ties with conbini for online pick-ups
Sports Authority opens sports fashion select shop Corners
Supermarket sales fall for first time in 14 months
New Kitte shopping centre opens in JP Tower Nagoya
Coleman gets slapped with retail price maintenance complaint
Uny to open large SC in Nagano
Hiratsuka Lalaport due to open 6 October
Nishimatsuya Chain profit forecast to jump 27.3%
Honeys makes ¥317 million loss
Joyful Honda employees caught selling endangered species

Retail Data: Tough trading for most in May

Companies in this issue
ABC Mart
Aeon Group
Aeon Mall
Akachan Honpo
Alpen
Amazon
American Holic
Aoki Holdings
Aoyama Shoji
Apita
Arcs
Askul
Autobacs Seven
Babys R Us
Bals
Barneys New York
Bic Camera
Blue Bottle Cafe
Bon Bon Home
Can
Cawachi Yakuhin
Chanel
Circle K Sunkus
Coleman Japan
Coop Mirai
Coop Sapporo
Cross Company
Culture Convenience Club
Daiei
Daimaru Matsuzakaya
Daiso Sangyo
DCM Holdings
Deco Home
Don Quijote
Familymart-Uny
Forus
FrancFranc
G-Foot
Geo
GU
Happy On-Time
Heiwado
HMV
Honeys
IKEA
Isetan
Ito-Yokado
Itochu Shoji
Izumi
J-Front Retailing
Japan Post
Japan Sales Professionals Association
Jean-Paul Gaultier
Joshin Denki
Joyful Honda
Kaldi Coffee Farm
Keihan Department Store
Keiyo
Kenkou Corporation
Kids Republic
Kitano Ace
Kitte
Kobe Bussan
Kojima
Komeri
Koto-ku
Kusuri no Aoki
Lalaport
Life Corp
Lohaco
LVMH
Marui
Matsumotokiyoshi
Ministop
Mitsubishi Estate
Mitsui Real Estate
Muji
Narita Airport
Nike
Nishimatsuya Chain
Nissen
Nitori
Nojima
OK Super
OPA
Otsuka Kagu
Pandora House
Parco
Poplar
Printemps Ginza
Rakuten
Reebok
Rizap
Ryohin Keikaku
Salvatore Ferragamo
Season Style Lab
Seiyu
Senshukai
Seven Eleven
Shimachu
Shimamura
Shinsei Bank
Shonan Bellmare
Sogo Seibu
Sports Authority
Starbucks
Stripe International
Sundrug
T-Site
Takashimaya
Tenmaya
Three F
Tokyo Midtown
Toto Gallery
Toys R Us
Trial
Tsuruha
Uniqlo
Uny Group
Vivre
Walmart
Wuaki
Xebio
Yamada Denki
Yamaya
Yaoko
Yodobashi Camera