September 2024 Issue

Seven Eleven stays focused despite bid distraction

That Seven & I has received a buyout bid from a major Canadian competitor won’t be news to anyone. We don’t think an acquisition is a realistic possibility and, anyway, the Canadian convenience store operator Couche-Tard is really only after Seven & I’s US operation. While the parent company is at least appearing to consider the offer, Seven Eleven is instead concentrating on further developments in its domestic business, ramping up the 7Now e-commerce operation across most of the chain, as well as overseas. For long-term investors, it will deliver great returns.

Editorial: A market divided

Itochu: big plans for Descente

Itochu’s Textile division continues to execute the directive from its CEO to expand reach and coverage in the fashion and lifestyle sectors, with sports one of the major target categories. It will completely absorb Descente as part of this plan, meaning the brand is likely to become one of the largest in the portfolio.

Rakuten down, Yahoo up

As expected, Rakuten posted lower GTVs for its domestic e-commerce business in 1Q2024 after cutting back on loyalty point promotions. This is a theme in e-commerce but rival, Line Yahoo, was forced to bring back some incentives after sales collapsed 16.5% in one quarter last year – and even then, sales only rebounded by 8.3% in the same quarter this year.

Malls up 2.7% but new builds down 

Shopping malls have finally recovered to pre-Covid sales levels but development of new malls is slow due to falling demand from tenants, saturation in the best locations, higher costs and the labour shortage.

Prices rise again as customers look for discounts

Core inflation rates remain stubbornly high and real wages are still falling. This is lowering consumer confidence – bad news for most retailers, although major discount chains are making hay while the sun, well, doesn’t shine. Surveys suggest one more major round of price hikes in October, including alcohol, but the government is hopeful that prices will stabilise below its 2% target by the end of the year.

60% of households finding life hard

The government’s 2023 survey on living conditions confirms the ongoing growth in the number of single-person households, particularly among the elderly, but with more younger people also deciding to live alone. Meanwhile, almost 60% of respondents said they were finding life hard, an 8 point increase in one year, with young families finding things especially tough.

Ain buys FrancFranc

Ain is best known for running prescription pharmacies but also has a lifestyle-oriented cosmetics chain called Ainz & Tulpe. Without this, the acquisition of FrancFranc would look odd, but the merger of the two will create genuine synergies and a new lifestyle retail business targeting women in their 20s and 30s.

Uniqlo’s European romance

Uniqlo’s European arm is on a roll, with more stores, higher sales and an increasingly loyal fan base. Uniqlo is also doing better at home but it needs the boost from newer markets given concerns over growth in China.

Yutori expands through M&A too

Zozo-owned Yutori has just acquired a womenswear brand and plans a series of acquisitions, with ambitions to become the Zozo of the younger generation.

Asics hits new records

Asics is on a roll thanks to the success of new shoe models and a long-term improvement in marketing to runners, although the weak Yen also helped boost reporting of overseas sales which now account for around 80% of the total. New efforts in other categories like tennis, along with more investment, should help maintain the momentum.

Rakuten Mart launching this month

Rakuten will launch Rakuten Mart this month,  an online supermarket but with Rakuten Ichiba vendors too.

FOCUS

Department Stores: the elite pull far, far ahead

Something remarkable has happened in the department store sector (not a sentence that has come up often in the last couple of decades). A year ago, both big city stores and those in the regions were all still well behind sales levels in 2010. But, after a massive spike in sales at the most popular locations last year, stores in these largest 10 cities exceeded 2010 sales levels by 2%. Emphasising the yawning gap between the elite store group and the rest, regional stores extended their losses with sales now down 42% on 2010. This gap in performance between the best and the rest is also reflected in the stores themselves across fit-out, design, merchandise profiles, customer service and staff training – and motivation – to the extent that we can legitimately say that the two groups are no longer part of the same sector. We now have a luxury retail sector and a middle-market general merchandise store sector.

Retail Data: Osaka retail surges

IN BRIEF

Amazon offers next day delivery nationwide

More clothes in conbinis

Facebook for men, Instagram for women

Zozo offers slow delivery

Find: a search service for your lost property

Hands launches smaller household variety format

Raffles Hotel to open in 2028

Rakuten Bank grows 11% in a year

Takashimaya launches online cosmetics store

Hourly part-time wages keep pace with inflation

Fuji Star acquires Kobe Lettuce fashion mall

Muji set for strong year

Yaoko opens 5th discount supermarket

Air Closet starts Prime service

Zo Skin Health launches in Japan

BAPE in Jingumae

Genky Drugstores: Strong year thanks to EDLP

Patagonia flagship in Osaka

German jewellery brand Niessing in Ginza

Home package delivery figures remain flat

Major development at Sapporo Station

Sazaby buys Cohina

Amazon invests more than ¥800 billion in Kanagawa

METI ends data release on large store applications

Brands and Companies in this Issue

Acute Grrrl, 18
Adastria, 1, 3
Aeon, 2–4, 8
Ain Holdings, 10
Air Closet, 10
Akachan Honpo, 3
Amazon, 3–4, 13
Anta, 5–6
Arena, 6
Atre, 6
Ayura, 10
BAPE, 10
Bauhaus, 12
Blue Wedge, 10
Cainz, 5
Cohina, 13
Daimaru Matsuzakaya, 19–20
Daiso, 3
Descente, 1, 4–6
Dior, 5
Don Quijote, 2, 8
Familymart, 3–4
Famitra, 19
Fast Retailing, 10–12
Foocot, 9
Found Good, 3
Francfranc, 10
Fuji Star, 8
Fujisaki Sendai, 18–19
Genky Drugstores, 2, 11
Giftee, 20
Ginza Six, 19
Green Beans, 4
GU, 11–12
Hands Be, 5
Hanshin Umeda, 14, 16–17, 19
Heart Relation, 12
Honeys, 1
Isetan, 1, 14, 17–18, 21
Itochu Shoji, 4
Iwataya, 18
Izutsuya, 16–17
JAL, 7
Joinus, 22
Jun, 18, 22–23
Kashiwakei, 12
Keikyu Yokohama, 18–19
Keio Electric, 5
Keio Shinjuku, 16, 19
Kintetsu, 17, 21
KKR, 13
Kobe Lettuce, 8
Lady Heart, 8
Lalaport, 7
Lamborghini, 5
Lawson, 4
Line Yahoo, 6
Loft, 3
Lopia, 8–9
Louis Vuitton, 21
Maibasuketto, 3–4
Marmot, 5
Maruhiro, 16, 21
Maruzen, 21
Matsuya, 1, 17, 21
Matsuzakaya, 1
Meitetsu, 16–17
Ministop, 4
Mito Keisei, 21
Mitsui Fudosan, 7
Mitsukoshi, 1, 14, 17–21
Mizuho, 6
Movesport, 5
My Basket, 4
Niessing, 12
Nippon Ham, 7
Nojima, 21
Nowart, 6
Oasis Management, 10
Odakyu, 17
Onitsuka Tiger, 13
Onward Crosset, 20
Parco, 19
Patagonia, 11
Perori, 13
Pizza Hut, 4
Raffles Hotel, 6
Rakuten, 1, 6–7, 13
Resona Bank, 6
Ryohin Keikaku, 8–9
Sazaby League, 13
Seijo Ishii, 21
Seiyu, 1, 13
Seven Eleven, 1, 3–4
Shein, 11
Shimamura, 1, 11
Sogo Seibu, 16–17, 19, 21
Sony, 6
Speedway, 1
Sumishin, 6–7
Sumitomo Shoji, 7
Takashimaya, 1, 7, 16–17, 20–21
TBeaut, 7
Temu, 11
Tenmaya Honten, 16
TikTok, 3–4
Tobu Ikebukuro, 16, 19
Tokiwa, 14, 16–17
Tokyu, 17
Tsuruha, 1, 4
Tsuruya, 16, 18
Uber Eats, 4
Uniqlo, 1, 10–12
United Arrows, 1
Wfeld, 6
Xiaohongshu, 20
Yahoo Shopping, 6
Yamada Denki, 7
Yamakataya, 16
Yaoko, 9
Yodobashi Camera, 21
Yutori, 1, 12
Zo, 10
Zozo, 4, 6, 12