October 7 2013

JapanConsuming Headlines: October 2013

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Focus: Apparel Retailing FY2012: leading from the top
Apparel sales rose 0.4% in FY2012 but the top 100 averaged growth of 5.2%, a strong result, helping the top 100 garner more than 60% share of the apparel market. Specialty chains continued to deliver most of the growth, but e-commerce businesses were also to the fore. GMS chains and department stores continued to lose market share, but the efforts of the larger department store firms to fix problems and take control of apparel retail floors through marketing and, above all, own brand development has begun to bear fruit – supported by greater spending by wealthier Japanese. With prices now bottomed out after two decades of decline, Japan’s apparel market looks set for an era of relatively stability.

Isetan-Mitsukoshi: targeting teens and seniors with new store formats
Isetan-Mitsukoshi’s new store plans will now make it an even more important client if you are selling either to the teen market or
seniors. An upcoming SC aimed at the former, and a chain of 150 stores within three years for the latter, will make the department store a key retailer for imported food, fashion and homeware. The chain of stores for seniors in particular shows how fresh Isetan-Mitsukoshi’s vision is these days, and how thoroughly it is considering the needs of the demographic segments it is targeting, while making the most of its brand equity.

Editorial: Affluent consumers spending big

H&M up 52%, more stores to come
H&M Japan added 10 new stores in the first nine months of FY2013 with more to come before the end of the year. At current levels of investment, it may become one of the top 20 apparel retailers in Japan based on current turnover of competitors, and the largest non-Japanese fashion retailer in the country, unless its competitors keep pace.

Nitori: big sales growth in FY2013
Nitori is by far the largest furniture retailer in the country and the only real competitor for IKEA. Despite the Swedish company’s popularity and rapid growth, Nitori has held its own, positioning as a low priced alternative with plenty of stores with easy customer access and a strong, directly run supply chain bringing in imported goods from China. The weakened Yen has been tough on Nitori, but its efficient operations seem to be keeping the company in good shape.

Rising prices, falling wages: a consumer squeeze but the rich richer
What little inflation the government has so far managed to generate is almost entirely due to the increased costs of imports. Businesses are almost unanimously saying that the economy has not improved enough to justify wage increases. Combined with the 3% increase in Consumption Tax next year, the average Japanese worker looks suddenly that much poorer. The return to an inflationary economy remains on very shaky ground, with serious implications for consumer markets – unless you are selling to high income segments in which case the party has probably only just started.

Start Today opens mall for teenagers
Start Today saw reasonable growth last year, but in a maturing market and with Zozotown, its leading fashion portal, facing growing competition, it has been looking for new ideas. Start Today launched a mobile play called Wear.jp in the summer, and just last month began a bid for the teen and 20s fashion market with a new mall called La Boo.

Aeon GMS store revival?
GMS share of retailing continues to fall, but Aeon Retail has found some new life by reinventing its stores, introducing focused specialty sales areas and providing more value to the overall shopping experience. It is also playing with a new shop concept for seniors.

Rising land prices indicate future consumer hot spots
While the price of commercial land across the whole of Japan dropped 2.1% last year, the beginnings of an upturn appeared in some areas. Prices in the centre of the three main conurbations continued to increase, but the disparity between these and regional cities continues to widen, a key indicator of where the future growth in consumer markets will be.

Takashimaya: easier overseas
Takashimaya has some of the most efficient department stores in the country measured by sales densities, but also has some awful stores too. Given the better stores, it is doubly surprising that just one store in Singapore contributed 22% of the department store division’s operating profit last year, and in 2011 no less than 60%. Time to import some best practices.

‘Knick knack’ stores flourish in Japan
Danish retailer Tiger has started a new retailing trend with its reasonably priced, well designed and playful household, stationery and fashion accessories. Late last month, Japanese competitor Asoko opened a prominent flagship in Harajuku, with Tiger and its Japanese partner Sazaby League opening a flagship early this month in Omotesando. The knick knack market is about to boom.

70% of early 30s women work full-time
Nikkei’s research arm has just published a new survey of unmarried women in full-time employment. The survey is revealing. On the one hand it shows the researchers’ continued stereotypical belief that 30 or so year old women should be married and not necessarily in careers, are compulsive consumers of sweets, and, as women, should enjoy a good gossip with friends. Such biases aside, however, the results reveal a lot about how young working women think and consume.

Retail Data: Luxury shopping gaining ground

News in Brief
Hollister opens in Japan
Seniors account for 25% of all thefts from stores in 2012
Baroque Japan launches new brand for 40s women
Meidiya to open six stores in FY2013
Independent retailing struggling with bankruptcy
Daiei posts ¥4.1 billion loss in first half
United Arrows to launch new select shop chain
Maruetsu plans first store in China
Valor plans to sell own brands in USA
Matsuya completes Ginza upgrade, forecasts 4% jump in sales
Ito-Yokado opens food only supermarket in Nerima
Aeon to open flagship Chiba mall in December
Lawson looking to revitalise China operations
SEVEN & I: Golden Bread
Korean fast fashions now online in Japan
Tokyu announces stunning new building for Ginza-Yurakucho
Tutuanna updates branding and O2O marketing, expands in China
Apparel Association plans tax-free labelling
GU sales hit ¥80 billion
Returns, rebates becoming less common
Tokyu Hands ties with Beams on fashion store
Kintetsu’s new Osaka store off to a slow start


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