Japan going cashless in 2019, but households still keep a lot of Yen under the futon cash
Heavily supported by the government, Japanese retailers are embarking on a shift to cashless payments and the number of different mobile payment services is growing rapidly. The speed of change is such that it is impossible to give more than a snapshot of what is happening currently, but clearly all the major retailers are keen to grab a slice of the action, carving out their own shopping ecosystems and, in many cases, leveraging existing loyalty point schemes to build share quickly. With so many options, the race is on to convince consumers one system is better than the others, leaving brands and other retailers struggling to work out which schemes to adopt. While the use of cash may decline, households still keep an average of ¥830,000 in cash under the futon though (8% of GDP in total).
4 new Parcos this year, 28% rise in revenue through 2021 Four4 income
Parco is enjoying a new lease of life under J Front ownership, investing assiduously in updating existing buildings and showing a decisiveness to rebuild entirely where location merits it and even closing down stores that don’t work. It will celebrate its 50th anniversary this year by opening four new buildings, including the flagship Parco Shibuya.
Editorial: Trade agreements for consumers
Rakuten to covertly cut merchant commission rates?
Rakuten has been under pressure recently from Amazon and other competitors in its core mall business, and now seems to be giving more attention once again to the original Rakuten Ichiba, including a plan to slash shipping fees, although this looks more like a face-saving way to cut merchant commissions.
Department Store apparel sales down 35% in a decade
Last month, the Japan Department Store Association (JDSA) announced a 1.1% drop in sales at department stores for calendar year 2018, with sales also down 0.8% on a same store basis. This was a reasonable result in a year when there were many store closures, both permanent and temporary, and slow traffic due to natural calamities, but the underlying trend remains clear: apparel sales continue to fall, down more than a third in a decade. Meanwhile, cosmetics has seen its share of sales double.
Supermarket consolidation likely
Signs of consolidation in the supermarket sector have come and gone over the past decade, but recent events suggest there will now be a sustained increase. Traditionalists, and the wholesalers who control the sector, point to the positives of greater variety and local food differentiation that has kept the sector so large and inefficient, but with falling populations and a shift to online buying gradually gaining momentum, as well as encroachment from other sectors such as drugstores, the time is ripe for bigger fish to start eating up the many, many tiddlers.
PLST to become Fast Retailing’s 3rd major brand?
Fast Retailing has spent 17 years developing PLST, very slowly at first. However, after opening 60 stores in four years, this mid-market women’s fashion brand now has 100 stores and is set for a more aggressive expansion.
Stimulus package to offset consumptiontax rise
Government plans for the consumption tax increase due in October continue to develop. As in 2014, companies are nervous that the increase will lead to a significant downturn in consumption, and the government is chaffing under pressure, both from businesses and the opposition. The latest idea is to pump more money into the economy, while at the same time insisting that Japan’s massive debt levels will fall. The problem is how much more tax will need to be raised to achieve this goal.
What’s down with Muji?
Ryohin Keikaku has downgraded full year forecasts but still expects record sales and solid profit growth in FY2018. Overseas sales have been going from strength to strength, but previously stellar results at home have weakened, particularly in the home and accessories category which is under pressure from competitors, including even Nitori. Muji is responding and also has big plans to grow food retailing, a big potential market.
Itochu issues tender offer for controlling stake in Descente
Contested takeovers and share purchases are highly unusual in Japan, all the more so between companies that have had long-term alliances. The Kansai brawl between Descente and Itochu Textile, with Kyoto-based Wacoal in the middle, is unprecedented. While Itochu claims it now wants a 40% share and Descente seems more inclined to seek a delisting, the net result could be new ownership entirely – by a Chinese firm.
Drugstores set to expand further
Drugstores have grown strongly in the past five years, boosted by the popularity of Japanese toiletry and cosmetics brands among tourists and the push for market share by leading players. Future profit growth, however, will be determined by prescription services, food and M&A, with all of the leading firms racing to build capacity.
Retail Data: Retail sales up 1.7% in 2018
IKEA Japan reports loss from improved sales
M&A deals skyrocket in 2018
Walmart-Seiyu appoints new CEO, may still be looking to sell
Summit to report record sales and profits
Lush to open biggest flagship yet in Shinjuku
Shimamura launches smartphone app
JINS opens AI-based showrooming store
GU to open Shibuya flagship store
Female labour participation dips
Tsuruha acquires another drugstore
Top convenience stores initiate joint logistics
LINE merchant accounts exceeds 3 million, Shopping Go 1 million
J Front: new SC in Sakae, Nagoya due in 2024
Tokyu to unveil new cosmetics chain in March
Look signs Danish brand Rains
Dinos-Cecile publishes new interiors catalogue
Top conbini chains stop selling smut
Rizap to sell Japan Gateway cosmetics firm
Retailers offering craft workshops through new service
Lawson expands in China