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Focus: Solid growth for SCs as new build rate rises again Shopping centres had a solid year in 2012 with the top 100 seeing sales rise 2.2% thanks to higher spending on fashions, food and lifestyle goods. The largest SCs are growing much quicker than the sector as a whole, which was up only 0.5% after a 1.3% fall in 2011. The leading developers continue to grab more market share through investment in new malls, as well as upgrading existing facilities to hammer nearby competitors. Although Aeon doesn’t report sales for its SCs, the JR firms, Mitsui and Mitsubishi now account for over 50% of the sales of the top 100 SCs alone.
Editorial: Retailers expect an amazing Xmas
Uniqlo: the only road is overseas Uniqlo has reached saturation in Japan and is now focusing almost all its investment overseas. At home it’s a case of consolidation, scrapping ageing road side stores in favour of new SC and city centre locations, as well as making further efforts to diversify and widen its range, including fashion, to drive more repeat business.
Cheap rice: food security dismantled A four decade old policy to protect rice prices, ostensibly to ensure food security, but just as much to appease the LDP’s many farming supporters, is about to be dismantled. The news is significant. It comes as a huge shock to farmers, but could bring welcome relief to long suffering consumers.
Shoe retailing consolidates as ABC Mart sales jump 21.7% Footwear is probably the most rapidly consolidating product sector in Japanese retailing today. ABC Mart is by far the strongest chain and continues to surge forward, leaving long-time leader Chiyoda struggling to maintain ground. Meanwhile Aeon has largely completed restructuring of its own footwear interests under the single umbrella of G-Foot and has hopes to squeeze Chiyoda further over the next 12 months.
A brick wall: selling suits Aoyama will launch a womenswear chain next year, Konaka has franchised a fashion chain from World, and Aoki is doing more karaoke than ever; all are efforts to shake off the doldrums of the suit market, suffering from a contracting and ageing population and a surfeit of younger men happy in just a casual jacket. The good news though is that both men and women are spending more when they do get formal.
Pal: a new ¥100 billion fashion retailer with a homeware slant Pal is radically different from other fast growing fashion and lifestyle retailers like United Arrows and Point. While its peers garner most of their sales from two or three key chains, Pal is a thoroughly and deliberately diversified retail group, including a strong homeware buisness. This approach has delivered solid results, but it is now embarking on a new stage of investment in large format stores, seeing a market for what it calls an ‘IKEA of fashion’.
Fancy.com launches in Japan There are already numerous social shopping sites in Japan, especially in fashion, but nothing quite like US hit service, Fancy.com, which launched in Japan last month. As well as solid investment partners, Fancy.com has also snagged Isetan as its first corporate sponsor and retail partner, including a showcase within Isetan Shinjuku itself. Quite a good start for a three year old business.
Aeon’s omnichannel marketing for SCs As this month’s focus shows (see Page 12), shopping centres now account for 20% of Japanese retail sales. The biggest competitive threat comes from e-commerce, and developers are looking for ways to both counter this threat as well as embrace the new technologies. Aeon will launch a new O2O marketing scheme when it opens its much heralded new SC this month, Makuhari Shintoshin.
Department Stores: an elderly niche The debate about the viability of department stores continues to rage. The past 12 months have been kind to the format and three chains, Isetan-Mitsukoshi, J Front and Sogo Seibu, are showing signs of innovating their way towards a secure future. On the other hand, too many stores remain drab, over staffed and randomly merchandised – mostly due to on-going control of sales space by suppliers. However, there is one consumer group that will continue to shop at department stores until they drop: the over 70s.
Komeri to expand into Hokkaido Komeri is the country’s third largest home centre chain with a wide range of store formats and more than 1,130 stores, operating in every prefecture except Hokkaido and Okinawa. From next year it will enter Hokkaido properly for the first time with plans to rapidly expand store numbers. Given its volume, Komeri is a major client for all kinds of homewares, interior, farm and DIY products from overseas.
Online grocery sales booming Online sales of grocery items, particularly food, are booming in Japan and there’s still plenty of growth left in the sector. All the major food and FMCG retailers, as well as a lot of the regional players, offer online ordering and direct to door delivery. There are also a few prominent online-only players, and the traditional retail Coops are also big contributors. Consumers are increasingly open to having food delivered to their door and various factors suggest that, in future, more and more people won’t bother even visiting a supermarket at all.
Omnichannel retailing comes to department stores and station SCs One of the problems department stores and shopping buildings face when trying to exploit e-commerce is that they do not, in general, take title to merchandise, leaving that to tenants. Lack of fulfilment skills and infrastructure, and limited information on tenant stock levels makes an online sales channel difficult. To fix this some companies are collaborating with tenants on new ways to create a more seamless shopping experience off and online.
Retail Data: Department store sales fall 0.6%
News in Brief Seven & I Holdings to acquire Nissen Laso: supplying from overseas select shops Rakuten 2013 ranking reveals health & beauty demand Line hits 300m users, targets 500m Lion to help poorly pets Aeon: a ¥20.14 million BAG Odakyu plans NEW SC AT Shimo Kitazawa station Russian cosmetics brand comes to Japan Izumi planning 30 store expansion, new format 90% of housewives expect to cut back Loro Piana in Ginza Sumikin Bussan invests in Radley London subsidiary Bonuses up, but not by much World opens Free People flagship Kojima launches on Amazon United Arrows tries fix for Coen chain Onitsuka Tiger to get 50 stores Kanematsu signs Yakpak as trading firms grab bag brands Aeon launches fashion specialty store Bag and apparel markets up, prices rising Tourist numbers jump 30% Isetan-Mitsukoshi profit jumps 55%