July 7 2013

JapanConsuming Headlines: July/August 2013

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Retail Results 2012: from growth to consolidation
FY2012 results are finally in for Japan’s top retailers. It was yet another good year for the majority of firms, with the growing trend of market consolidation increasingly clear. With the exception of consumer electronics retailers, most retailers have very little to complain about and the majority are talking positively about the year to come.

Convenience stores now competing with supermarkets
Convenience stores offer what their name suggests: quick, convenient shopping. Until recently, what they did not do was compete on price. Now, along with the growing prominence of lower priced own brands, the biggest chains have begun to reduce prices on major manufacturer brands to a significant degree, bringing them into direct competition with supermarket and GMS chains.

Editorial: A bumper summer after a solid 2012

Mitsui and Mitsubishi: the battle for supremacy in premium malls
Mitsui Bussan and Mitsubishi Shoji are rivals in banking, trading and energy. They also own two of the most powerful real estate businesses in the country, and both have highly successful portfolios of SCs that include the leading outlet malls. Until now Mitsui led on branding and marketing, particularly through its Lalaport chain but Mitsubishi plans to challenge it through its new Mark IS brand of SCs. Mitsui isn’t giving an inch, planning more expansion in the next few years, and has just taken the leadership in outlet malls.

Guess comes back to Japan
Guess used to be a ¥7 billion a year license business in Japan but pulled out more than five years ago. It will relaunch in Japan next Spring, this time on its own terms.

Start Today announces Wear.jp
Start Today announced a mobile fashion social network last month called Wear, aimed at encouraging more fashion consumers into stores and making their choices viral.

Locondo ties with Excite, adds apparel
Mergers and tie ups in online retailing continue as players jostle for a dominant position. The latest is a capital tie up between Locondo and Itochu Shoji’s subsidiary Excite Japan.

Consumer prices flat, luxury spending up in May
Results for the ambitious experiment known as Abenomics continue to be largely ambiguous. While prices remain flat overall, household spending in general fell in May, but spending on luxuries by working households grew strongly – again. Average summer bonuses increased for 40% of thre workforce and retailers are hoping this spurs further spending, although some consumers are being pressured by rising utility prices. At present it is only the top end of the market that is enjoying a recovery and there are few signs of a sustained trickle down effect despite strong sales in June.

E-wallets market exceeds ¥2.6 trillion
The market for electronic money in the form of smart card e-wallets continues to expand in Japan. Aeon and Seven & I, along with the biggest railway operators and the largest online retailer, are the main players in the market. Last year saw record growth in the number of transactions and total transaction values of ¥2.6 trillion.

Osaka retail buckles under new SCs
Kintetsu Department Store opened the first chunk of its new department store last month, the first stage in the development of a vast complex in Tennoji that includes a 300 metre tall office and hotel tower. The new zone will be a major draw for local residents but as with other recent SC developments, will make life even harder for older shopping centres.

Seven & I tightens grip on suppliers
Seven & I’s own brand strategy continues to evolve, although the company is maintaining double-branding on most products. Recently announced changes demonstrate that this politically correct veneer masks a level of power in the buying process that even large manufacturers have no choice but to comply with.

Government targets 30 million tourists
The Japanese government continues to work on ideas for further economic revitalisation. This includes everything from encouraging more tourism, reduction in some taxes, a small increase in the minimum wage, and even redefining the standard measure of economic growth from GDP to GNI (Gross National Income) so as to measure Japan’s massive investments outside the country. It is tourism that will have the biggest impact on consumer distribution.

Yamada Denki: turning the ship
The entire Yamada Denki board stood down at the end of June, symbolically taking responsibility for rapidly worsening financial performance. Most board members will probably return with new portfolios but the single significant change is the reappointment of founder Noboru Yamada as president. There is a sense of genuine crisis at the electronics retailer as it struggles to return to growth.

Aeon plans new chain of discount stationery stores
The stationery sector remains a niche market in Japan, controlled by a small number of major suppliers offering high quality products at generally premium prices. Following the failure of a joint venture with Office Max, Aeon is having a second stab at shaking up the market, introducing a new chain of discount stationery stores.

Isetan-Mitsukoshi to roll out more specialty stores, launches new regional store model
Isetan-Mitsukoshi’s plans to build a non-department store retail arm are becoming more concrete. It will create a new, mini-department store, mixed merchandise format selling fashions, home and food, as well as more small format stores for station and fashion buildings beyond the current cosmetics store. In May it even opened a shop in a highway service area. Meanwhile, it has unveiled what is being billed as a solution to the group’s problematic regional stores.

Retail Data: Department stores up 2.6% in May, Tokyo up 5.1%

News in Brief
H&M Japan sales up 54% in 1H2013, 4 more stores this Autumn
Online shopping for the seriously rich
Seiyu ties with DeNA for new EC site
TSI Holdings to focus on e-commerce
Cyber Agent takes O2O solution to SHOPPING CENTRES
Samantha Thavasa to build clothing arm
Parco to expand Zero Gate concept nationwide
Itochu Shoji signs Ermanno Scervino, Elizabeth and James, Blue Les Copains
Kering to invest in Japan
Daiei cuts prices on 700 items, offers new gift card
Kipling in Omotesando
Patrick Cox relaunches in Japan
Posh dry cleaning comes to Tokyo
Ibex signs John Galliano
IKEA wins bid for new location in central Hiroshima
Tiger signs with Sazaby League
Don Quijote hits 200 stores
Misaki Shoji signs Tombolini
Ito-Yokado aims to expand net super by 30%
Bulgari upgrades and expands in Kobe
Aurora signs Stephen Jones hats
United Arrows, Beams, Baycrews targeting SCs
L’Occitane introduces premium customer club
Nitori opens two new stores in Chubu, maintains profits
Sports retailers Alpen and Xebio add new stores
Orbis to renew online sales system
Familymart opens first drugstore hybrid in Hokuriku
Muji Cafe & Meal in Hong Kong
New hybrid Fast Retailing store for Shanghai


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