November 4 2014

Highlights November 2014

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Focus: Convenience Stores: and then there were three
Convenience stores seem to go from strength to strength. This year will set another new record for the number of new stores added to the three largest chains alone – and these three already account for some 75% of the entire market. With saturation point reached, the sector is now looking to the next step, with all three of the largest chains trying out new strategies for the day, very soon, when adding yet another 1,000 stores a year simply isn’t viable. As part of this, Seven Eleven could become the hub for sales of everything from nappies to high end fashions.

Isetan-Mitsukoshi to expand import brand business
As part of its diversification drive, Isetan-Mitsukoshi plans to turn its small import business, Club 21 Japan, into a significant player in overseas brand distribution. This will feed both its own department store sales floors, as well as its up coming select shop chain. At the same time the influence of Isetan Shinjuku in fashion marketing will provide a powerful launchpad for any new brands it signs.

Editorial: Aeon offers a new age?

Cross Company opens fairtrade fashion chain, targeting ¥1 trillion globally
When a retailer launches a new chain and says it will have sales of more than ¥1 trillion one day, suppliers and competitors take notice- although such extreme targets are a little too common among leading apparel chains these days. But when that company has a record as the fastest growing fashion retailer since 2000, there is a chance the target may turn out to be realistic. Then when the same chain says it will only sell fairtrade and sustainably sourced merchandise, it becomes intriguing.

Seiyu to upgrade 50 stores, close 30
Walmart has been operating Seiyu for 14 years, and although estimated sales place Seiyu well down the rankings compared to its heyday, there are growing signs of confidence. Seiyu is looking to redesign more of its existing stores, further improving what is one of the best fresh produce operations in the country. It will also close some 30 poor performing stores, another sign that it is confident in growing volumes in other ways.

USM Holdings: Aeon’s new base for a national supermarket chain
Aeon has taken the next step towards its goal of consolidating the supermarket sector, beginning with the key market of Kanto. The retailer is tying with Marubeni to establish USM Holdings in March 2015, which in turn will take over ownership of Maruetsu, Kasumi and Maxvalu Kanto, all major Kanto supermarket chains. Together the operation will be larger than any other supermarket chain in the country, but this is just the first step. It will then start canvasing for other supermarkets to build a nationwide chain.

Opportunities in online fashion marketing proliferate
The online fashion space continues to develop and diversify offering more opportunities for fashion brands and retailers to not only reach new consumers, but to do so in an ever more targeted way.

H&M to launch Cos this month
H&M will bring a fourth chain, Cos, to Japan this month. Cos is a completely different target market from H&M, Weekday and Monki, however, with higher price points and a combination of quality design and yet still accessible prices that could spell trouble for department store brands from Japanese apparel firms.

Muji gaining from weak Yen
Muji, perhaps Japan’s most prominent retail brand globally, is reporting a major boost from overseas income. Like so many of its counterparts, Muji is a brand that relies on offshore production for much of its merchandise range, and the weakened Yen has hit its domestic profitability. Overall, however, consolidated operating profit for 2Q2014 was up 26% on last year, entirely down to ever improving, and expanding, performance overseas.

Consumption Tax widens supermarket performance gap
The effect of the April Consumption Tax increase has been far milder than many expected, but it has still hit more unprepared and intransigent retailers. This is most evident in the supermarket sector, where many chains survive on the thinnest of margins. While in most regions chains have indeed struggled as consumers worry over prices and suppliers pass on cost increases, in Kanto some have done surprisingly well and overall like for like sales have increased as a result.

Mash Style Lab: fastest growing fashion retailer slows down
Mash Holdings has been the fastest growing fashion retailer for the last two years, and has ambitious plans to expand further both at home and overseas. However, while it will double store openings this financial year, it expects sales to rise just 20%, not bad, but half the growth rates of 2012 and 2013.

Aeon’s drugstore revolution continues
Aeon has begun full absorption of its Welcia Holdings affiliate, the start of plans to shake up drugstore retailing, with Welcia and three other major drugstore chains merged by the middle of 2015. This will create the largest single chain in the country, overtaking Matsumotokiyoshi, and put Aeon in a position to make even further gains through increasing buying power and more uniform branding, impacting the cosmetics, health, household goods and drugs markets significantly.

Takashimaya Tamagawa: another refit
Takashimaya Tamagawa has been one of the most successful department stores over the last two decades, and continues to hold its own despite a wealth of new competition in the area around Futako Tamagawa. It continues to update its sales floors, introducing new tenants and directly managed space to keep the locals keen. No wonder its management is being tasked with development of Takashimaya’s other principle stores.

Fast Retailing upgrades e-commerce
With retailers now firmly in control of their supply chains, and e-commerce growing quicker than any other sales channel, the major brands are just beginning to initiate moves to take better control over logistics functions too. Last month Fast Retailing completed a deal with Daiwa House aimed at improving distribution both at home and overseas.

Retail Data: Department store sales flat in September

News in Brief
Gap to open 11 Old Navy stores this year
Tourists spending 40% more this year
Charlie’s juices launch in Japan
Treasure Factory acquires Brand Collect
Survey suggests wives should stay at home
Sanrio launches first original Mister Men character
Takashimaya to open in Thailand
Tokyu to open 30,000 sqm Kawasaki SC in 2016
New SC to be test bed for Seven & I specialty stores
Poiray relaunches in Japan and France
Seven Eleven to revamp takeaway coffee offer
Machida reborn
Locondo attracts more investment
Nishi Nippon expands Incube variety chain
Department stores roll out more small format ideas
Samsonite brings Hartmann to Japan
ABC Mart forges ahead with 15% growth in 1H2014
Lalaport confirms Tachikawa opening in late 2015
Tiffany opens first stand alone store in five years
Four new stores for Charles & Keith

Company and Brand Index this month
Numbers indicate page of report:

[columns count=”4″]A-Coop, 14
ABC Mart, 10
Aeon Group, 10
Aeon Hapicom, 10
Akachan Honpo, 6, 15
Alexander Wang, 1
Amazon, 11, 15116
Anna Sui, 1
Aoi, 1
Asahi Beverages, 15
Bals, 15
Barneys, 15
Belc, 5
Black Barrett, 1
CFS Corporation, 10
Chiyoda, 10
Circle K Sunkus, 14116
Cocokara Fine, 10
Cos, 1, 7
Cosme Kitchen, 9
Cross Company, 1, 314
CyberAgent, 6
Daichi Keihin, 6
Daiei, 5
Daiwa House, 11
DeNA, 6
Desk My Style, 9
Diver City, 3
Doubleday, 9
E Hyphen World Gallery, 3
Earth, Music & Ecology, 314
Ecos, 8
Familymart, 4, 8, 13116
Fast Retailing, 1, 11
FrancFranc, 6
Fray I. D., 9
Fujitsu, 3
FurFur, 9
G-Foot, 10
Galloria, 6
Gap Japan, 3
Gelato Pique, 9
Goodday Park, 6
Grandtree Musashi, 9
Hands Select, 9
Hankyu, 9, 14
Hartmann, 10
Hello Kitty, 5
HEP Five, 4
Iemo, 6
Inageya, 5
Incube, 9
Inditex, 11
Isetan-Mitsukoshi, 1, 11
Ito-Yokado, 4, 6
Jafco, 8
Kasumi, 5, 8
Keita Murayama, 1
Kent, 6
Kodansha, 6
Koe, 314
Komeri *****
Lalaport, 4, 10111
Lawson, 4, 8, 13116
Lawson Mart, 8, 14
Life, 415, 8
Lily Brown, 9
Little Miss Hug, 5
Locondo, 8
Loft, 6, 15
Look, 1, 4, 7, 9110, 13, 16
Mammina, 1
Mango, 4
Marubeni, 5
Maruetsu, 415, 8
Maruetsu Petit, 8
Mash Holdings, 9
Matsumotokiyoshi, 10
Maxvalu Chubu, 9
Maxvalu Kanto, 5
Mery, 6
Mila Owen, 9
Ministop, 15116
Misaki Shoji, 1
Mister Men, 5
Muji, 1, 7
Mulberry, 1
Neil Barrett, 1
Nishi Nipppon Rail, 9
Odakyu, 9111
Okuwa, 819
Old Navy, 3
Onward Holdings, 11
Ozaki, 8
Parco, 9
Peroli, 6
Plaza, 6, 9
Poiray, 7
Proenza Scouler, 1
Samsonite, 10
Sanki Shoji, 1, 7
Sanrio, 5
Sanyo Shokai, 7
Sazaby League, 7
Seibu, 6, 15
Seicomart, 14
Seijo Ishii, 14
Seiyu, 1, 4, 8
Seven Eleven, 314, 718, 13116
Seven Net Shopping, 15
Siam Takashimaya, 5
Snidel, 9
Sogo Seibu, 15
Starbucks, 7
Start Today, 6, 11
Sugi Holdings, 10
Summit, 8
Sundrug, 10
Sunnymart, 14
Takashimaya, 1, 5, 11
Three F, 14115
Tiffany, 11
Tohan, 15
Tokyo Gas, 8
Tokyu Hands, 9
Topvalu, 15
Toshin Kaihatsu, 5, 11
Tower Records, 6
Treasure Factory, 4
Tsuruha Holdings, 10
Uniqlo, 11
Uny, 16
USM Holdings, 5, 8
Vasily, 6
Vivi, 6
Walmart, 4
Wear, 3, 6
Welcia Holdings, 10
Yagi Tsusho, 1
Yamada Denki, 6
Yaoko, 8
Zennisshoku, 5
Zozotown, 6[/columns]


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