2013 was a good year for retailing, and the results for the 12 months to December mirror the early financial year results now appearing. Department stores did particularly well, with the higher end stores far outperforming suburban and regional stores.
Department stores and most major supermarket chains posted excellent sales in calendar year 2013. Overall sales were up throughout the year, but the last two months showed a significant upswing compared to 2012 as consumers increased spending in anticipation of the tax-hike. High consumer confidence in general also helped encourage spending in December, but some chain stores are seeing sales up partly due to the increased cost of imported foods.
From January to December 2013, 54 department stores sold ¥30 billion or more, the same number as the previous year, with Isetan-Mitsukoshi Osaka still below this threshold at just ¥29.7 billion. Overall top 50 store sales were up 4.7% for top stores. All of the leading five stores, and 24 of the top 30 stores, saw sales increase compared to 2012. Hankyu Umeda, having reopened in November 2012, surged 27.4%, finishing with sales only 1% lower than Isetan Shinjuku, which was also up 9.3%. Hankyu was hoping for even better performance, but it could well become the top selling retail store in the country over the next 12 months – it already outperformed Isetan in December.
Daimaru Tokyo was up 13%, again due to reopening after refurbishment and expansion, and Matsuzakaya and Takashimaya in Nagoya, and Mitsukoshi in Ginza all surged more than 8% on the year. In contrast, the only stores down by 10% or more were Tokyu Shibuya and Sogo Hiroshima, both stores undergoing refits and rebuilding.
The consistency of growth for these high end retailers from across the entire country is further evidence of consumers’ willingness to spend, and the enthusiasm for higher ticket items. Suburban stores, along with a few remoter provisional stores in the top 55, were the ones that did relatively less well, with the city centre stores improving almost across the board.
For the leading 19 chain store operators, performance was more mixed. In particular, all of the leading three GMS chains saw sales fall, led by Ito-Yokado down 3.9%. Seven & I’s core GMS chain continues to struggle with price positioning given its higher margin philosophy, and the recent moves to be more price competitive (see Page 5) are long overdue.
In contrast, Aeon Retail, which includes almost 2,500 stores mixing GMS and supermarkets, pushed sales up 13%. Aeon’s core chains alone accounted for an impressive ¥6.3 trillion last year, ¥7.6 trillion if affiliated companies among the leading 19 chains are included. This growth was, however, entirely organic, with Aeon Retail expanding store numbers by 12.9%, almost all supermarkets, and consequently sales per store were flat. Only four chains, Life, Maruetsu, Summit and Tokyu Store, improved sales per store. Seven chains did manage to improve sales per square metre, a significant increase in performance efficiency in an industry that has always measured success mostly through increased sales space.
Share of total retail sales for the main formats continues to expand, up 2.4 points last year to 55.7%. Estimates for non-store retailing, including e-commerce, suggest it continues to surge ahead, accounting for more than 12.3% of total retail sales in 2013. All other formats also expanded, taking share away from independents.
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