January 15 2021

Japan’s Retail Sector in Review 2020-2021

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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January 2021 Issue

Nitori to expand N+ fashion chain and add 200 new furniture stores
Nitori, one of Japan’s best performing retailers, plans to increase the pace of growth, with up to 200 new stores in the next three years. The furniture chain will also invest around ¥200 billion in logistics to support the expansion, as well as rapidly grow its fashion chain, N+. With people forced to stay at home in 2020, the nesting instinct took hold and Nitori had a particularly good year. If all goes well, FY2020 will not only be its 34th consecutive year of record results, but see the fastest profit growth so far.

Editorial: Preparing for a new era

Tokyo Base to launch sports chain
Tokyo Base will launch a sports fashion chain later this year as it struggles to persuade consumers to spend on premium fashions during the pandemic.

Sports retail in flux as Mitsubishi ditches Himaraya
The sports retail market is dominated by four big retailers, Alpen, Xebio, Mega Sports and Himaraya. With Mitsubishi Shoji’s financial and supply chain support, Himaraya overtook Mega Sports a few years ago but Himaraya’s sales have since contracted and Mitsubishi gradually reduced its stake while still retaining its core supply role. Mitsubishi will now divest all shares and end its supply relationship too, leaving Himaraya open to takeover. Given that sports/outdoor is one of the few sure growth markets, Himaraya won’t lack for potential suitors.

OPA partial split from Aeon Mall
Aeon acquired OPA as part of its acquisition of Daiei and set about creating a chain of city-centre shopping buildings while slowly closing its own Vivre and Forus buildings. The result has been a success but the subsidiary still delivers poor returns, prompting Aeon to split the business into two: station buildings and the rest.

Wolt: Finnish food delivery in Tokyo
October saw the launch of Wolt in Tokyo. Wolt is a food delivery facilitator originating from Finland that is rapidly expanding across the country, claiming to offer better customer service, limited edition menus, and smoother integration with SME food vendors than big rivals like Uber Eats and Demae-kan. It plans to spend ¥10 billion in Japan and open in at least 100 cities.

Re-delivery rate drops to just 11%
With people staying at home, deliveries for e-commerce orders have a better chance of succeeding, helping failed delivery rates fall from 25% to just 11% in only five years.

New AI ordering systems to counter criticism of conbinis
Lawson and Familymart are both working on new, AI-based (or other automated ordering systems) to reduce uncertainty in demand forecasting. This is necessary not just to reduce waste, but because of increasing pressure from government to treat franchisee store owners fairly.

Mobile shops and flexible delivery
Just a month after Megane Super said it was switching from opening new physical stores to mobile ones, other retailers are following suit. With Covid-19 infections reaching new records in Japan in December, taking the shop to the consumers is looking like an attractive option, rather than hoping that a few might make it out to stores,  and a visiting store-in-a-truck should help less mobile customers too.

Surge in calls for voluntary redundancies likely to continue
By 2019, many retailers and brands were already introducing new technology solutions to make up for labour shortages. Despite the crisis, shortages continue to be a major headache in the service sector and the downturn in trading since March has only accelerated efforts to replace staff with tech. This could create new problems as older employees lose their jobs.

Outdoor market expands 3.2% in 2019 but contraction in 2020
Like most lifestyle segments, the outdoor apparel & equipment market contracted in 2020 but this is a blip in an otherwise sustained multi-year expansion. Long-term growth is being driven by both expanded supply and demand as consumers of all ages embrace the great outdoors for the first time in generations and suppliers rush to equip them.

Isetan-Mitsukoshi: big losses but some plans for the future
Isetan-Mitsukoshi presents itself as one of the stronger department store businesses but its fractious boardroom battles and u-turns over store closures in the last five years have suggested a company in turmoil – as recent results indicate. The department store continues to talk big on digital solutions but it has an inherent problem: over-dependence on just three flagship stores.

Retail in Review 2020-2021: Light in the dark as some retail sectors outperform in a pandemic
2020 was a year to remember, although not for good reasons. While the news was overwhelmingly negative given the devastation that the pandemic caused to so many lives, for Japan as a country the experience could become a catalyst to spur positive change. No matter how much we might never wish to repeat the last 12 months, those governments and companies that learn from the experience will be better positioned whenever a new pandemic emerges. Department stores, convenience stores, and most fashion chains had a horrible year as so many people stayed away from major shopping areas, but many other retailers actually had stellar years, providing more lessons to be learned. 

Rakuten and Japan Post announce tie-up
Shopify boosted by Covid in Japan
Rodenstock closes Japan office, signs with Derigo
Kobe Bussan increases its mid-term targets
People leaving Tokyo in record numbers
Coty Japan creates new fragrance business
Sazaby signs Australian brand Wolford
Japan Post expands parcel drop off for Mercari users
Flicfit opens staffless and stockless store at Haneda
Shopping mall numbers fall again
Shimamura profit soars 3.6 times
Mitsui invests in skincare
GU to slash prices by 30%
Mitsui’s &mall surpasses 3 million customers
JINS opens New future proof concept
Vending machine numbers drop 2.4%
Adastria quits Korea
Askul ups forecasts for FY2020
Tsuneo Okubo appointed new Seiyu CEO
Seino offers 2-hour prescription deliveries
Familymart adds utility payments to Famipay app
Mitsui Bussan invests in Tastemade Japan
Life updates Bio-ral health food ranges in Tokyo
PPIH opens first store in Taiwan

Brands and companies mentioned in this issue

Adastria, 1, 10, 19-20
Adidas, 5
Aeon, 4-6, 9, 11, 19-20
Aeon Mall, 1, 6-7
AirBNB, 16
Alpen, 4-5
Although Demae, 7
Amazon, 7, 11
Amu Plaza, 7, 22
Aoyama Shoji, 10, 19-20
Askul, 1, 10-11, 19
Belluna, 1
Bic Camera, 12, 19, 21
Big Outdoor, 12
Bulk Homme, 8
Camp Depot, 12
Cath Kidston, 8
Cawachi Yakuhin, 1
Chiyoda, 1
Chloe, 5
Chopard, 4
Columbia Sportswear, 11-12
Cosmos Yakuhin, 19, 21
Coty, 5
Daiei, 6
Daikoku Bussan, 19, 21
Daimaru, 1
DCM, 3
De Rigo, 4
Decathlon, 5, 11
DeClasse, 1
Derigo Japan, 4
Descente, 12
Dome, 12
Drug Eleven, 11
Familymart, 8, 12, 19, 21
FamiPay, 12-13
Fast Retailing, 3, 8, 19-20
Fit365, 13
Flicfit, 6
Forus, 6
Furla, 4
Genky, 1
Goldwin, 5, 11-12
Golf Digest, 5
GU, 8
Gucci, 5
Gyomu Super, 4
Hankyu Hanshin, 13
Hanshin Dispensing, 12
Himaraya, 1, 4-5
Hitachi Metals, 10
Inageya, 2, 9
Isetan, 1, 11-13, 19
Isetan Mart, 12
Ishii Sports, 12
Itochu Shoji, 8
Izumi, 19-20
Japan Post, 3, 5, 7
Joinus, 22
Jun, 22
Kasugai Shogyo, 7
Keihan Mall, 22
Kippy Mall, 13
KKR, 11
Kobe Bussan, 4
Kohnan Shoji, 12
Komeri, 1
Kura Holic, 4
Lalaport, 9
Lawson, 6, 8, 19, 21
Life Corp, 13, 19
Lohaco, 11
Louis Vuitton, 20
Lumine, 6
Maruetsu, 9
Matsumotokiyoshi, 19
Matsuya, 1
Matsuzakaya, 1
Meeco, 13
Mega Sports, 4-5
Megane Super, 2, 9
Mercari, 6
Ministop, 19, 21
Minotaur Inst, 9-10
Mitsubishi Fashion, 4
Mitsui Bussan, 8, 13
Mitsui Fudosan, 9
Mitsukoshi, 1, 12-13, 19
Mizuno, 12
Montbell, 11
Muji, 1-2, 9
MyLord, 22
Nike, 5
Niki Golf, 5
Nishimatsuya Chain, 1
Nissen, 14, 17
Nitori, 1, 3, 19
Noin, 8
Nojima, 10
OPA, 1, 6
Paper Planes, 6
Porsche Design, 4
PPI, 19, 21
Public Tokyo, 3
Puma Japan, 12
Rakuten, 3, 6-7, 11, 14
Rimmel, 5
Rizap Group, 4
Rodenstock, 4
Ryohin Keikaku, 19, 21
Sagawa, 7
Sanyo Shokai, 10, 13
Sazaby League, 5
Seijo Ishii, 11
Seino, 12
Seiyu, 11
Seven Eleven, 8, 12, 19-21
Shimachu, 2-3
Shimamura, 1, 7-8, 19-20
Shopify Japan, 3
Snow Peak, 11-12
Takashimaya, 1, 13, 19
Tastemade Japan, 13
Tiffany, 20
Tokyo Base, 1, 3
Tokyo Verdy, 5
Toskushimaru, 9
TSI, 10
Tsuruha, 1, 13, 19, 21
Uber Eats, 6
Under Armor, 12
Uniqlo, 1, 8, 10
United Arrows, 1
Valor, 19, 21
Vivre, 6
Wacoal, 12
Walmart, 11
Welcia, 19, 21
Wolford, 5
Wolt, 1, 6-7
Workman, 1, 5
Xebio, 4-5
Yamada Denki, 19, 21
Yamato, 7
Yaoko, 19, 21
Yodobashi Camera, 12


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