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Footwear sales rebound in weakened sector
Footwear sales plummeted during Covid, except for sports and hiking shoes, with a deleterious impact on all the big three retailers. While ABC Mart has recovered, Chiyoda and G-Foot continue to struggle, leaving the market wide open. Disruption is coming.
Editorial: E-commerce: the best there is
Komehyo opens new Ginza flagship
Komehyo, the secondhand retailer, opened a new flagship last month on Chuo-dori in Ginza, replacing a less visible store. The company expects to sell ¥3 billion a year in the 500 sqm store, and is already displaying watches with resale prices of up to ¥70 million.
Inbound tourism up 50%, spending almost at 2019 levels
Inbound tourism only got going again from October but the pent up demand to visit Japan has meant a surge in visitors. Since many tourists also have stuffed wallets due to curtailed spending during the pandemic and the Yen is at very low levels, there is much higher spending on premium fashion accessories and clothing.
More retail development in Tokyo
There are fewer new shopping malls but investment in the biggest cities is rising, especially in Tokyo, where a return to higher net population growth and potential tourism are encouraging more commercial development.
More price increases bring further challenges for retailers
Shoppers will see a further round of FMCG price increases this month, with leading companies set to raise prices on more than 4,000 items. Price inflation on FMCG is now at its highest level since the 1980s and supermarkets are signalling growing caution among shoppers, with some households holding back all but essential spending, seeking out bargains and avoiding supermarkets that are seen as too expensive.
New rules could hit 36% of e-commerce deliveries
Japan already suffers from a shortage of truck drivers and in 2024 new rules to restrict truck driver overtime could potentially slow Japan’s growth in e-commerce adoption, with METI worried enough to suggest major disruption. However, both demand and supply of e-commerce is now so strong that new solutions are likely to appear quickly.
Aeon Retail: profits again after 4 years
Aeon’s main GMS arm, Aeon Retail, is on track to post a net profit in FY2023 thanks to a strong performance and the success of efficiency measures introduced over the past few years. This should lead to improved results for Aeon as a whole as its drugstore, real estate and overseas businesses remain strong.
Valentine’s Day opportunity as ‘duty chocolate’ market declines
Valentine’s Day is a unique sales event in the Japanese calendar. With its somewhat sexist origins, the traditional market has declined in recent years but more enlightened, personalised chocolate gifting, and a wider range of products, are injecting new life into the day. It is also one of those typically Japanese markets that thrives on imported products.
Look HD: imported fashion on the up, achieves targets early
Distributors of overseas fashion have been battered by the collapse of the Yen, forcing higher prices. Look Holdings has managed to elicit strong growth through this crisis, resulting in a doubling in its share price, and is looking for more brands.
Branded camping from Goldwin and Snow Peak
After decades of industrial, urban focus, city-dwelling Japanese first began a tentative reengagement with nature through hiking two decades ago. This has evolved into more extended trips that began to include camping and visits to wilder areas. These excursions into nature are enticing but still a bit forbidding for many, so camping and outdoor activities in a park managed by a trusted brand have strong appeal.
Same store sales up 3.3% at convenience stores
The convenience store sector was one of the worst hit by a downturn in sales during the early pandemic, but in typical style, all three major chains have implemented changes and improvements. Results for the first three quarters of FY2022 show that the big companies are almost all trading above 2019 levels already.
Descente expects record profits
Descente has improved profitability since being taken over by Itochu three years ago but much of the growth has come from overseas. The Descente brand remains weak in Japan but Itochu has plans to rebuild the eponymous label by splitting it into two while creating several new brands.
FOCUS
Led by food sales, e-commerce continues expansion as omnichannel takes hold
After stellar growth in 2020, the e-commerce market grew much slower in 2021 but still outpaced all other channels and set the second highest increase in four years. At this rate, by 2025 e-commerce should become the largest retail channel, overtaking chain stores. The pandemic has proven a turning point for online retailing, forcing both vendors and consumers online and proving to both the value of online sales, but, unlike some other markets, Japan’s easy access to a wide variety of retail stores means shops aren’t about to disappear anytime soon and Japan will become a model for omnichannel retailing rather than turning away from physical shops altogether.
IN BRIEF
Department stores up 13% in 2022
Yahoo to merge with LINE
Rakuten up 11.2% in 2022
Sac’s Bar invests in omnichannel
Central Tokyo population at record high, Yokohama contracts
Rising wages in the fashion industry
J Front profit surges
NEWoMan Shinjuku sees record sales
JINS GO: mobile specs
Aeon to sell shares in subsidiaries
Yamada offers used electronics and appliance recycling
Rakuma attracts secondhand vendors
Fast Retailing raises wages for some
JR Takashimaya sees record sales in December
Ginza Six installs 12 new tenants
Takashimaya increases real estate investment
Familymart sells 10 million socks
Delibot makes side dishes 3 times faster than humans
Mercari cross-border sales increase 1.4 times
Online pet supply market growing
1899 mall adds Live Commerce subscriptions
Bookoff opens used luxury online store
Fujimaru to redevelop as mixed use building
Electronics sales down in 2022
Seven & I delays Sogo Seibu sale
Brands and Companies in this Issue
Abeno Harukas, 5
Adastria, 1, 5, 14
Aeon, 2–3, 7–8
Aeon Hokkaido, 7
Aeon Retail, 1, 8
Aizu Dust, 7
Aman Residences, 5
Amazon Japan, 16
Amu Plaza, 21
Angel Forest, 11
Anta, 13
ASBee, 3
Askul, 1, 16
Azabudai Hills, 5
Bathing Ape, 11
Baycrews, 5, 14
Belc, 11
Bic Camera, 16
Bizoux, 9
Bookoff, 12
Bulgari Hotel, 5
Buyee, 11
CBcloud, 12
Chanel, 11
Chiyoda, 1, 3
Chocolat Promenade, 9
Connected Robotics, 10–11
Cox, 3
Daiei, 5
Daimaru Matsuzakaya, 9
Daiso, 12
Delibot, 11
Descente, 1, 13
Descente Spirit, 13
En Japan, 5
Facetasm, 10
Familymart, 10, 12
Fast Retailing, 8
Fit House, 9
Fortress Investments, 13
Gears Jam, 4
Gelato Pique, 1
Genky, 1
Ginza Six, 9
Goldwin, 1, 11, 13
Hankyu, 1
Helly Hansen, 11
Hermes, 3, 9
House Collective, 5
Hysteric Glamour, 11
IKEA, 16
Il Bisonte, 10
Isetan, 1, 9
Itochu Shoji, 13
JADMA, 7
JINS, 6
Joinus, 21
Joshin Denki, 16
JRI, 4
Kobo, 3
Komehyo, 1, 3
Komeri, 1
Lalaport, 5
Lawson, 12
Lohaco, 8, 16
Look Holdings, 10
Louis Vuitton, 11
Lululemon, 9
Lumine, 6
LVMH, 5
Marimekko, 10
Marmot, 13
Matsuya, 1, 3
Megane Super, 7
Mercari, 11
Mitsubishi Estate, 5
Mitsui Fudosan, 4–5
Mizusawa Down, 13
Mori, 5
Nike, 11
Nitori, 1, 3, 16
Nomura Research, 6
Okapi Pharmacy, 12
OniGo, 15
Onitsuka Tiger, 4
Otsuka Kagu, 16
Peacock, 5
PickGo, 12
Purple Things, 13
Rakuma, 3, 8
Rakuten, 2–3, 8–9
Samantha Thavasa, 9
Scramble Square, 3
Seiyu, 2–3, 8
Seven Eleven, 12
Shimamura, 1
Shoes Plaza, 1
Shopee, 11
Snow Peak, 1, 11
Sogo Seibu, 1, 9, 13
Sumitomo Mitsui, 4
Sumitomo Realty, 5
Takashimaya, 1, 8–10
Teikoku Databank, 6
Timco, 11
Tinpan Alley, 8
Tokyo Stock, 7
Tokyo Tatemono, 5
Tokyu Corp, 5
Tokyu Hands, 10
Toppan, 12
Topvalu, 8
Toshin Kaihatsu, 9
Uber, 15
Ugg, 3
Umbro, 13
Uniqlo, 1, 6
United Arrows, 1, 13
Workman, 1, 3, 11
Yahoo Mart, 15
Yamada Holdings, 7
Yodobashi Camera, 13, 16