November 2017 Highlights

Nov 03

FOCUS: Convenience Stores in 2017: top three chains claim 90% of the market, still struggle with e-commerce
Convenience stores are Japan’s largest single retail sector, and the most concentrated. With Familymart acquiring Circle K Sunkus last year, the leading three chains now account for more than 90% of all sales. Only two major questions remain for the sector: What will happen to the few remaining independent chains? Most likely merge or die. How will the big three continue to grow? While a much more complex question with plenty of possible answers, Seven Eleven, Lawson and Familymart still have lots of new ideas, including working with more international brands, and, at least in the medium term, growth is likely to continue.

From GMS to DMS: Don Quijote and Itochu to transform Uny
Discount retailer Don Quijote will complete its purchase of a 40% stake in the Uny GMS operation this month, taking over this problem from a grateful Itochu which only took over Uny to get hold of Circle K Sunkus last year. Although the discounter will need to work hard to turn Uny around, coupled with Itochu’s involvement, the potential for a new major retail group to emerge is huge, and, including Familymart, would already command sales of nearly ¥5 trillion, as much as Seven & I.

Editorial: Modern retail means fewer retailers

Tourist spending jumps 27%
Retailers and brands continue to benefit from the ongoing surge in visitors to Japan, but equally, spending per tourist has also risen significantly in recent months, following a dramatic drop in 2016.

DoClasse to hit 120 stores next year
The 40s to 60s womenswear market remains under-developed despite being one of the few growing population segments. One of the more successful retailers in this segment is DoClasse, which is set to become a 120 store chain next year.

Shimamura plans 100 stores per year, will launch online in Spring
Shimamura is now a 2,000 store apparel retail group, with sales closing in on ¥600 billion. While Uniqlo is far and away the biggest apparel retailer with sales of ¥800 billion, growth has slowed (see page 7) and Fast Retailing doesn’t plan many more stores here, focusing instead on overseas. Shimamura, however, says there is room for 3,000 of its stores in Japan alone, including, at last, a major push into city centres.

Uniqlo overseas sales to exceed Japan within a year
Uniqlo is still growing, especially on a same store basis (see Page 1 snapshot) but has reached store saturation at home, and most investment is being targeted towards e-commerce. The real focus now is overseas, with sales expected to exceed Japan within a year or so, almost all of this is from Asia. Europe and the US still need work.

Higher shipping fees in e-commerce
As couriers begin to hike prices to offset the huge growth in demand for home delivery services, e-commerce providers are worried about slower growth in the burgeoning sector. In practical terms the new delivery prices are unlikely to be a major long-term issue.

Queens Isetan sold to Mitsubishi
Following the lead of Sogo Seibu, department stores are divesting businesses that don’t fit and that drag on profitability. The latest is Isetan-Mitsukoshi which has sold its Queens Isetan supermarket chain to Mitsubishi.

Samantha Thavasa losing appeal
Domestic bag brand Samantha Thavasa was one of the hottest local fashion brands in Japan in its early years, with clever marketing providing some competition to imported handbags. Today, however, things don’t look too good, and it seems that a marketing misstep may well be to blame. The brand is struggling to put things right.

TV Shopping market up nearly 5%
TV Shopping should be in decline now that everyone is focused on e-commerce, but the latter is enabling the former, freeing up broadcasts from the TV to expand to a myriad of screens. So far, though, this shift only seems to be benefiting the major broadcasters, who already own close to half the market.

Some department store chains rebound
Major department stores have rebounded from a tough FY2016 with much stronger sales to both Japanese and tourists in the last six months. Not all have benefitted, due to store closures and restructuring, but even the laggards are showing improvements on a same store basis.

Retail Data: City department stores jump 6.8% in September

IN BRIEF
Yahoo online mall up 15%
Adidas Japan invests in Tokyo stores
Itochu signs 3 more brands
OPA Akita opens with 60 tenants
Start Today acquires Vasily’s iQon
Aoyama to close down Next Blue chain
Adastria to launch two new womenswear chains
Even part-time wages down
GMS apparel down again
Japanese grow almost 3 cm in 20 years
A tiny bit more inflation
IY Fresh opening 28 November
Chain store sales flat
Nike delivers to konbini
Mitsui opens online store
Louis Vuitton to move Ginza store
Chan Luu in Omotesando
Tokyu upgrades Kichijoji store
Nitori introduces premium brand &Style
Aeon to open first standalone outlet mall
Tokyu unveils new building design for Hachiko

Companies and Brands in this Issue
ABC Mart
Adastria
Adidas
Aeon
Amazon
Aoyama Shoji
Askul
Avail
Baroque Japan
Beisia
Birthday
C Channel
Cainz
Caitac Family
Chan Luu
Chaos
Cimarron
Circle K Sunkus
Claska Gallery
Climachill
Closshi
Coca Cola
Cosme Kitchen
Curensology
Daiei
Daily Yamazaki
Daimaru-Matsuzakaya
Dentsu
Dinos-Cecile
DoClasse
Don Quijote
Dyson
Elemental
Familymart
Fashion Centre Shimamura
Fast Retailing
FitFit
Forus
Fresco
FU
FuQ
Godiva
Grand Marche
GU
H2O Retailing
Hakopost
Hankyu
Heart Friend
Heart-In
Heiwado
Hokuo Lucky
Instagram
Isetan-Mitsukoshi
Ito-Yokado
Itochu Shoji
J Front Retailing
Japan Post
Japanet Tanaka
Javie
Jimmy Taverniti
JR East
Jupiter Shop Channel
Kanebo
Lawson
KDDI
Keihan Railways
Labra
Lohaco
Loppi
Louis Vuitton
Marisa Rey
Marubeni
Marui
Matsuya
Mes Demoiselles
Miki House
Ministop
Mitsubishi Shoji
Mitsui Real Estate
Nagasakiya
Nanaco
Next Blue
Nike
Nissen
Nitori
Oak Lawn Marketing
Odakyu
Omni7
OPA
Pack City Japan
Parco
Peace Love World
Permira
Piago Kanto
Poplar
Queens Isetan
QVC
Rakuten
Rodeo Crowns
Rolex
Samantha Thavasa
Schick
Seibu
Seicomart
Seijo Ishii
Seiyu
Senshukai
Seven Eleven
Seven & I
Seven Meal
Sly
Softbank
Sogo Seibu
Start Today
Stooge
Sun Motoyama
T-point
Takashimaya
Teleken
The Suit Company
Three F
Tokyu Department Stores
Trial
Uniqlo
Uny
Usagi Online Store
Vasily
Violet D
Vivre
Yahoo Japan
Yamada Denki
Yamato
Yamazaki Bread
Yaoko
Yoox
Zozotown

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