March 5 2024

Aeon to dominate FMCG sector with Tsuruha-Welcia

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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March 2024 Issue

Proposed Tsuruha-Welcia merger to transform FMCG retailing

Tsuruha may have fended off unwanted attention from activist investors, but this opened the door to Aeon, which quickly moved in with a proposal to bring Welcia and Tsuruha together to form a new FMCG mega-retailer. Although both the latter are designated drugstores, their expansion into food and general FMCG means the creation of what will be Japan’s single largest retail chain by sales,  sending shockwaves across the entire FMCG retail industry.

Editorial: Mergers, mergers, everywhere

Beams: converting staff into shop owners

Online marketing by shop staff is no longer new, but it remains highly effective. Ever iconoclastic, Beams has come up with its own way to use the inherent talent in its shop management teams online to both reaffirm its unique positioning, while also adding new revenue streams.

JAL Mall: gold from 30m mileage members

Amidst intense competition in online mall retailing, JAL and ANA both launched their own e-commerce malls last year to replace once popular catalogues. Although a tough market to enter, airlines have distinct advantages over other small malls: data and access to premium customers willing to spend ¥1 million on a case of wine.

Shibuya 109 revival

Shibuya 109 went through a dramatic decline in popularity in the last decade but, after some soul-searching during Covid, has found a new purpose, resulting in sales surging more than 30% last year and nearly the same again so far this year.

Depachika going solo selling food

Department stores continue to close, but the premium foods in their basements, the so-called depachika, remain a unique part of Japanese retailing and the only way urban shoppers can access such treats. Recognising this and their own brands’ popularity, several chains are looking to food as a key growth category for the future.

KDDI buys half of Lawson but why?

KDDI will buy 50% of Lawson, making it a partner to Mitsubishi Shoji in running the third largest convenience store chain. This will also mean that Lawson will delist. It’s a big deal, but no one really knows what KDDI’s aims are. Some more imaginative analysts suggest this could be just the first step towards KDDI merging with Rakuten in order to beat Amazon.

Snow Peak to delist with Bain help

Snow Peak has finalised an agreement with Bain Capital to take the outdoor brand private next month. Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas – even so, the MBO price looks cheap.

Kobe Bussan: record sales again

Discount cash and carry retailer, Kobe Bussan, posted more record results for FY2023, a reflection of the demand for discount retailing. Net profits were down due to foreign exchange costs, but the company continues to expand to meet the growing demand for discount retailing, and is now building domestic factories to counter exchange rate fluctuations, and a new restaurant and food services arm.

Look HD bullish on fashion imports

It has been a tough few years for premium fashion importers. Decimated sales during Covid were followed by a sharp depreciation in the Yen that has forced a hike in prices and/or a squeeze on profits. Look has found some solutions, adding new brands while exploring new markets.

Familymart ties with Coca Cola on logistics, sells laundromat business

In one of many such ventures in response to the 2024 logistics problem, Familymart began an experimental collaboration with Coca Cola Bottlers in February, seeking to reduce delivery frequency in Kanagawa. It is also streamlining its business, selling both its gyms and laundries recently.

FOCUS:

Fashion e-commerce: physical stores grow faster than online

After a bumper bonus during Covid, the fashion sector saw calmer spending in the last 18 months as the big return to shops led to more mutred growth online. The overall EC fashion market grew around 4-7% depending on how you measure it, but online market share actually fell as people went back to shops. More work has been done in the last year to create a seamless and coherent omnichannel model, and in making the best use of stores and staff in online promotions, further incentivising customers back to stores as much as online.

Retail Data: Shopping malls up 5.1%, department stores 7.1%

IN BRIEF

Japanese more frugal

Kintetsu Department Store: no closures

Andar athleisure trials stores in Japan

Sazaby League reorganises to expand

Trial tries IPO again

Seven & I opens central kitchen for Ito-Yokado

PPI posts record 1H2023

Onward sets up Japan company for Joseph

iStyle ties with Trenders on cosmetics support

Yamato invests in 60% fashion mall

Marui retail recovers

70% shop online for New Year bargains

Isetan-Mitsukoshi sets more record highs

7Now becomes available across Kanto and Kyushu

fast logistics for fashion rentals

Konaka absorbs Samantha Thavasa

Aoyama launches Goovi genderless brand

Yutori raises forecast, launches cosmetics

GU collaborates with Undercover

Senshukai posts loss of ¥5.5 billion 

Yokohama to shrink 20% but more malls coming

Lumine: 110 new tenants this Spring

BOJ says Japan is now inflationary

Oisix opens new frozen food DC

Brands and Companies in this Issue:

Adastria, 1, 16–18
Aeon, 1–4, 9, 11
Afternoon Tea, 4
Agete, 4
Ain Pharmaciez, 4
Air Closet, 9
Akachan Honpo, 16
Amazon, 8, 10, 14
American Holic, 12
Amu Plaza, 19
Andar, 4
Aoyama Shoji, 10, 17
Apotheke Fragrance, 13
Artida Aud, 13
Au Pay, 8
Baccarat, 6
Bain Capital, 10–11
Baroque Limited, 16
Baycrews, 5, 14–16, 18
Belle Maison, 12
Belluna, 16
Bose, 6
Calbee, 7
Calnamur, 13
Camper Japan, 4
Canada Goose, 4, 11
Carver Korea, 11
CCC, 9
Cecile, 16
Chisousai, 12
Citen, 13
Coca Cola, 1, 13
Cocokara Fine, 1, 3
Coreka, 13
Cosmos Yakuhin, 1, 4
Crooz Shoplist, 14, 16
Daytona Int, 16
Descente, 16
Don Quijote, 6
Dyson, 6
ECbeing, 14
Estnation, 4
Familymart, 1, 3–4, 8–9, 13
Fashion Walker, 16
Fast Retailing, 3
Felissimo, 16
Fuji, 4
Fursac, 13
Genky Drugstores, 4
Goldwin, 16
Goovi, 10
GU, 11, 16–17
Gyomu Super, 11–12
Hankyu, 1, 7
Happy Plus, 14, 16
Hapycom, 1, 3
Hokkaido Dosanko, 4
Honeys, 16–17
IGA, 18
Il Bisonte, 12
Isetan, 1, 6, 9
Itochu Shoji, 4
Jade Group, 16
JAL, 1, 5–6
Jeans Factory, 17
Joix Corp, 16
Joseph Japan, 6
KDDI, 1, 8–10
Keen Garage, 13
Ken Corporation, 12
Kihachi, 4
Kintetsu, 3
Kobe Bussan, 1, 11–12
Konaka, 10
Lacoste, 6
Lawson, 1–4, 8–10
Le Creuset, 6
Lip Service, 6
Locondo, 14, 16
Lohaco, 10
Look Holdings, 12
Lopia, 4
Loppi, 8
Lumine, 13–16
LY, 10
Magaseek, 16
Marimekko, 12
Marui, 8, 14, 16
Marukawa Fashion, 17
Mash Holdings, 11, 18
MatsukiyoCocokara, 3
Miesrohe, 13
MimiTV, 7
Mitsubishi Shoji, 4, 8
Mitsukoshi, 1, 6, 9
Montbell, 6
Montblanc, 6
MSGM, 13
Muji, 1, 12
Narumiya Int, 16, 18
Nicole Fujita, 13
Nippon Ham, 6
Nissen, 16
Nitori, 1, 17
Oasis Management, 1, 4
Odakyu, 7–8
Onward Holdings, 6, 18
Pal Holdings, 18
Panasonic, 10
Petrichor Bakery, 13
Plaza, 4
Ponta, 9
PPI, 5–6
QVC, 16
Rakuten, 8–10, 14–16
Ray Cassin, 17
Reebok, 16
Regal Corp, 17
Ron Herman, 4
Samantha Thavasa, 10
Sanyo Shokai, 16–18
Sazaby League, 4–5
Seijo Ishii, 3, 6, 9
Senshukai, 12, 16, 18
Seven Eleven, 1, 3–5, 8–9
Shimamura, 1
Shirts Kamakura, 18
Shueisha, 14, 16
Sixty Percent, 7–8
Smythson, 13
Snow Peak, 1, 10–11
Softbank, 9–10
Sogo Seibu, 1, 7
Sony, 17
Sotetsu Railway, 12
Staff Start, 5, 14, 16–17
Steteco Fashion, 17
Stripe International, 16
Studio Atao, 18
Suit Square, 10
Sundrug, 1
Tefal, 6
Tokyo Base, 16–18
Tokyu, 6
Trenders, 7
TSI, 16, 18
Tsuruha, 1–4, 11
Uniqlo, 1, 12, 16, 18
United Arrows, 1, 5, 12, 16–18
Urban Research, 16
Valor, 4
Wacoal, 16
WAON, 9
Welcia, 1–4, 10
Workman, 1
Yahoo Shopping, 10, 14
Yamato Holdings, 7
Yutori, 11
Zozo, 11, 14, 16

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