February 2018 Top Stories

FOCUS: 100 Yen shops bask in growing discount economy
The continuation of the ‘Great Wage Squeeze’ over the past two decades means more households are finding it harder to make ends meet. The retail response has been slow but Japan’s 100 Yen Shops were helping out from the start, emerging as a major feature of the retail landscape in the 1990s, and growing ever since. With renewed pressure on household budgets, combined with a growing appetite for discount retailing among even prosperous consumers, the 100 Yen Shops are thriving once more, opening 500 shops last year alone. Understanding their appeal is key to understanding today’s consumer markets.

Walmart and Rakuten aiming to transform food distribution
Rakuten and Walmart are two companies that see Amazon as their main competitive nemesis, so the news that they will combine to offer online food and FMCG sales from later this year caused excitement on both sides of the Pacific, boosting Rakuten’s share price at the same time. This is the third major online food venture in the past 12 months, and taken together will result in the biggest shake up in the food industry in 40 years.

Editorial: More discounts needed

Yahoo: ¥2 trillion by 2020
Yahoo Japan was falling rapidly behind Amazon and Rakuten until two years ago, but has seen a transformation in its fortunes thanks to a bold move to slash merchant fees, setting off a surge in new merchants which then drew in crowds of customers. It now says it believes it can be the biggest e-commerce service through 2020.

JR East: 50% rise in retail planned
JR East commands the highest average SC sales densities in the country, and offers a visibility guaranteed to help any brand or retailer improve its sales in this market. It already oversees tenants generating the equivalent of 8% of all retail sales in Japan but is increasing its investment further, planning to raise revenues from retail by 50% in the next decade.

Mitsui buys Bigi Holdings
Mitsui has an active fashion business, particularly in production and sourcing services, but it has neither Itochu’s wholesale and retail reach nor Mitsubishi’s prowess in backing many of Japan’s biggest fashion retailers. It now wants to fix this and has bought Bigi to start. The move is however really more defensive than opportunistic given Bigi’s beleaguered state.

Aeon unveils ambitious ¥10 trillion revenue target for 2020
Aeon, Japan’s largest retail group by some margin, has spent the past decade struggling with profits and, like all of its peers, seeing more and more consumers turn away from its core GMS chain business. After two years of restructuring and strategic rethinking, the group is showing some signs of improvement, and now plans a major boost in its fortunes as soon as 2020. It is already the biggest supermarket operator, third biggest apparel retailer, number two in home, and the biggest cosmetics and health vendor.

Suits retailers go digital
Top menswear retailers including Aoki Holdings and Konaka have recently joined Amazon Japan’s new men’s Suit Store. With the worry that suit sales are likely to plummet as retirement numbers near their peak, chains are looking for new markets, and even Itochu is entering the market with an online made to measure service selling suits at up to ¥1 million.

Major chains suffer flat year in 2017
Supermarkets, general merchandise and convenience store chains all recorded poorer same store sales again in 2017 and convenience stores continue to struggle with saturation.

Adastria launches cosmetics brand, plans more diversification
Adastria continues to grow but much of the recent increase has come from acquisitions, with same store sales flat, and profitability volatile. To fix this, since last year the fashion retailer has begun a programme of diversification, both across different product categories like home interiors and cosmetics, and also into new territories, including buying its way into the US market through two acquisitions.

Department stores diversifying into new formats
Department stores enjoyed another small boost to performance last year, and with the stock market surging, these luxury-end retailers are hoping for an even better year in 2018. But their business is changing. The top five groups now account for more than 80% of the market, but each of these companies today operate very different portfolios compared to five years ago, and for some 50% of sales now come from non-department store retailing.

Abe: tax breaks for higher wages
Inflation remains stubbornly low despite huge amounts spent on quantitative easing. The government is renewing its call for firms to pass on profits to workers, and wants a big tax incentive for companies that offer workers a pay hike of 3% or more. If the legislation is approved and wages do increase, there should be a strong uplift in consumer spending.

Retail Data: Department Store tourist trade up 46% in 2017

IN BRIEF
Virtual currency momentum building fast
80% of over 50s spend ¥116,000 a year online
Lawson experiments with health food line up
Start Today launches private brand, plans quantification of fashion business
Smartphone users prefer Amazon
Beams to launch in Europe and US
IKEA discounts 150 products by 22%
Atre Kawasaki reopens but Lazona fights back
Aeon’s Sports Authority chastised for misleading customers
Tokyu Hands begins digital receipt experiment
Tokyo Base to diversify
LINE Shopping’s 14 million users overwhelmingly women
Don Quijote announces new developments
Komehyo acquires entry to e-commerce
Locondo up 30%
Uniqlo to open in Sweden
Bonpoint offers culture classes to kids
Murasaki Sports signs Diamond Supply
Gap opens biggest Kansai flagship
Life Bio-ral Utsubo store reopened
Uniqlo online sales surge 25%

Companies & Brands mentioned in this Issue
Adastria
Aeon
Alibaba
Alicia
Amazon
Aoki Holdings
Aoyama Shoji
Apita
Ark Marketing
Asahi Group
Atre
Baldoni
Beams
Bic Camera
Big A
Bigi Holdings
Bio-ral
Bonpoint
Buona Vita
Burberry
Caleido
Can Do
Carrefour
Chaos
Color the Days
CouCou
Cox
Curensology
Daiei
Daikoku Bussan
Daiso Sangyo
Daiwa Next Bank
DeNA
Diamond Supply
Don Quijote
Donguri Kyowakoku
Ecute
Element Rule
Fast Retailing
Flet’s
G-Foot
Gap Japan
Gibiwear
Gibli
Ginza Six
H2O Retailing
Hankyu Hanshin
Haruyama Shoji
Harvey Nichols
Hyaku-Emon
IKEA
Instagram
Isetan Mirror
Isetan-Mitsukoshi
Ito-Yokado
Itochu Shoji
IY Fresh
J Front Retailing
J-Coin
Japan Retailnet
JR East
JR Takashimaya
Kante
Kasumi
Keidanren
Kinokuniya
Komehyo
Komeri
Konaka
La Fabric
Lakole
Lawson
Lazona
Life
LINE
Locondo
Lohaco
Loristella
Lululemon
Lumine
Macromill
Mango
Marine Layer
Marion Toufet
Martinique
Maruetsu
Marui
Matsuya
Max Mara
Maxvalu Kanto
Maxvalu Kyushu
Mega Sports
MELROSE
Mercari
MI Plaza
Mitsubishi Fashion
Mitsui Bussan
Mitsui Bussan I-Fashion
Mitsukoshi
MMD Labo
Muji
Murasaki Sports
Mysty Woman
Nagasakiya
Newdays
Nike
Nitori
NTT Docomo
Omni7
Pageboy
Pal Group
Papas
Parco
Paul Stuart
Piago
Piccone
Queens Isetan
Rakuten
RHC Ron Herman
Sanyo Shokai
Scabal
Seria
Seven-Eleven
Shimamura
Shimane
Softbank
Sogo Seibu
Speed
Sports Authority
Start Today
Studious
Styling Life
Søstrene Grene
T-Site
Takashimaya
Teatora
The Big
Tokyo Base
Tokyo Metro
Tokyu
Tokyu Hands
Toshin Kaihatsu SC
Tous
TSI
Uniqlo
United Arrows
United Tokyo
Uny
USMH
Velvet
Walmart
Watts
Yahoo Japan
Yamato Transport
Yamaya
Yen Lemon House
Zoff
Zozo