Focus: Consumption Tax to hit while incomes still falling
Retailers are bracing themselves for consumer reaction to the increase in Consumption Tax. Retailers may be worried, but some consumers are looking at a serious change to their spending patterns if incomes don’t increase soon. Although the last rise in 1997 caused relatively minor sales disruption in the end, it came at a time when deflation was lowering prices and incomes were high – the highest on record in fact. This time around, incomes are falling just when prices are rising, making a sudden, doubling in direct taxes a potential disaster for the average Japanese household. But the situation is already bad: in the past year there has been a 24% fall in cumulative net annual disposable income, with the average family finishing with a surplus of less than half that of 2007. The surplus will be wiped out by the tax increase.
Editorial: Full steam ahead for Spring
H2O Retailing to acquire Izumiya
H2O Retailing will acquire Izumiya in June, creating a new, top 10 retail group. An increasing spate of mergers between leading chains has been on the cards for sometime, and this is the biggest regional merger so far. As with mergers led by Arcs in Tohoku two years ago, other regional chains will rush to consolidate too.
Cross Company to launch chain targeting US and Europe
Cross Company still delivers rapid growth but it is reaching a scale that could well slow it down if it doesn’t expand beyond the current model and narrow market. It knows this, and for the last two years has been working on a plan to create a new kind of fashion chain, one that is designed for global markets and sales of ¥1 trillion, while also being ethically and ecological sourced. Can slow fashion scale that big?
JR West to takeover 60% of Isetan-Mitsukoshi’s Osaka store
Partnerships between JR operators and department stores have been successful for the most part, notably Takashimaya Nagoya, Daimaru Sapporo, and most recently Hankyu Hakata. In Osaka, JR West has been cursing its deal with Isetan-Mitsukoshi since well before the opening of their joint store at Osaka station in 2011. JR West will now take control of most of the space, creating a 50,000 sqm SC, with major retailers already queuing up.
Guess in Japan again
Guess left Japan more than eight years ago but is now back with its first store opening this month. Last time it licensed its brand to a local firm, but this time around Guess is following the market leaders with its own direct operation.
Daiei to expand discount chain
Daiei is now part of Aeon Group, and while Aeon decides what to do with its latest acquisition, the opportunity to leverage the Big A discount chain in Tokyo is an obvious first step and one that couldn’t be timed better. If all goes according to plan, store numbers will be doubled over the next couple of years, establishing a major discount food chain at the heart of the capital and putting pressure on other supermarkets and even convenience stores vying for the same market.
Both young and old lead shift to online shopping
Non-store retailing continues to grow faster than any other channel, with major retailers now developing serious online alternatives to their physical stores. Men are still the primary buyers online, and more women still prefer catalogues, but shopping by mobile or tablet is the fastest growing browsing method. Meanwhile there have been improvements in online store design and a better understanding of what consumers want from non-store retailing.
Fast Retailing the multi-national
A new listing on the Hong Kong stock exchange is part of Fast Retailing’s wider strategy to globalise its operations in a bid to get its stores into every key international market. Non-Japanese sales are certainly rising fast on the back of a rapid store roll out, but profitability remains elusive in some markets and may impinge on its appeal to those new international investors in Hong Kong.
E-money: a ¥3 trillion market growing at 20% a year
Japan’s e-wallets are arguably an old technology being used by big retailers and banks at the consumer’s expense, but the market continues to grow given the huge convenience and the lack of real alternatives. Retailers are at last beginning to data mine the information they collect and that might well benefit consumers through new products and services.
Department Store sales rise for first time in 16 years
In 2012 department store same store sales rose for the first time in 16 years, but this was partly because of a rebound from the impact of the 2011 earthquake. The uptick in overall sales this year, however, shows both the strength of premium markets at the moment, as well as a decline in store closures.
Top convenience chains expect strong 2014, 4,800 new stores
Despite worries in many parts of the retail sector, convenience stores still expect a strong year. All of the top three chains will expand store numbers at home and improve attractiveness through better ranges and marketing initiatives. They will open a record 4,800 stores this year alone.
Seven & I revamps entire promotion system, more online ads
Build a store and the customer will come. But what if the store is a virtual one online? Given its clear aim to develop Japan’s first store-to-web omnichannel, Seven & I has taken the first step by entirely reorganising its advertising and promotion strategy. It will increase the volume of online advertising 10 fold in the first year and combine media channels. It will also bring much of its promotion planning and strategy development in-house.
Retail Data: Department Stores beat overall retail growth
News in Brief
A result for Abenomics: ¥6 million chocolate
H&M Japan sales jump 46% in 2013
Lalaport Tokyo Bay gets second update with Stradivrius and Flying Tiger
ABC Mart overseas sales jump 65%
More women working, fewer permanent jobs
Hankyu Nishinomiya Gardens to get major update
Kusuri no Aoki extends online drug sales
Sazaby opens store for Frank & Eileen
Itochu signs Sanmarino for Outdoor Products
Japan to begin taxing foreign downloads in 2015
Suntory acquires Jim Beam
Matsuzakaya Ueno to reopen March 12
Familymart to unify private labels internationally
Generic electronics begin to takeoff
Retailers and restaurants gearing up for high demand
Mitsui ties with Mitsukoshi on concierge service
Locondo the store
United Arrows launches e-commerce app
Ito-Yokado opens first store in China for 3 years