Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

The following is an in-depth review of the retail sector by format with a brief overview of incomes and consumption trends and metrics before that. For any investor looking at the Japanese consumer/retail space, this insight will provide a rapid overview of all the major trends.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, with further upside still to come.

The following is an in-depth review of the retail sector by format with a brief overview of incomes and consumption trends and metrics before that. For any investor looking at the Japanese consumer/retail space, this insight will provide a rapid overview of all the major trends.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, with further upside still to come. 

Japan Retail Full Review 2020-2021: Some Retail Sectors Outperform in a Pandemic

2020 was probably the worst year in the CVS sector’s history.Not only is footfall down due to the Covid crisis, but the sector faces both saturation and the prospect of lower growth. Franchisees are disgruntled at long operating hours and tight controls over their incomes by the big operating companies, and the government is backing the store owners.Store numbers are set to fall, but the big firms are worried that the drop could be much faster than forecast and they could lose key locations.

2020 was probably the worst year in the CVS sector’s history.Not only is footfall down due to the Covid crisis, but the sector faces both saturation and the prospect of lower growth. Franchisees are disgruntled at long operating hours and tight controls over their incomes by the big operating companies, and the government is backing the store owners.Store numbers are set to fall, but the big firms are worried that the drop could be much faster than forecast and they could lose key locations.

Japan's Convenience Store Chains Soften up Franchisees

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Lockdown, social distancing, and no public gathering have caused the alcohol beverage companies in ASEAN to be under enormous pressure to generate earnings, and some governments' plan to ban alcohol sales does not help to alleviate the burden either. 
<a href="https://www.smartkarma.com/entities/heineken-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:12647:1" rel="noopener">Heineken Malaysia (HEIM MK)</a> and <a href="https://www.smartkarma.com/entities/carlsberg-brewery-malaysia-bhd" target="_blank" data-smartkarma-citation="entities:5389:1" rel="noopener">Carlsberg Brewery Malaysia (CAB MK)</a> will continue to experience difficulty as the pandemic continues to spring up and the proposal to ban alcohol will also curb revenue growth.
<a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a> and <a href="https://www.smartkarma.com/entities/delta-djakarta-tbk-pt" target="_blank" data-smartkarma-citation="entities:5585:1" rel="noopener">Delta Djakarta (DLTA IJ) </a>may face a similar fate with the Malaysian counterparts but the latter has an 11% dividend yield which may make appealing to some investors and it is also owned by the Jakarta Regional Government. The winner is <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> as Thailand's pandemic is under control and they are about to receive an influx of Chinese tourists again.

Lockdown, social distancing, and no public gathering have caused the alcohol beverage companies in ASEAN to be under enormous pressure to generate earnings, and some governments' plan to ban alcohol sales does not help to alleviate the burden either. 
Heineken Malaysia (HEIM MK) and Carlsberg Brewery Malaysia (CAB MK) will continue to experience difficulty as the pandemic continues to spring up and the proposal to ban alcohol will also curb revenue growth.
Multi Bintang Indonesia (MLBI IJ) and Delta Djakarta (DLTA IJ) may face a similar fate with the Malaysian counterparts but the latter has an 11% dividend yield which may make appealing to some investors and it is also owned by the Jakarta Regional Government. The winner is Thai Beverage (THBEV SP) as Thailand's pandemic is under control and they are about to receive an influx of Chinese tourists again. 

CrossASEAN: Alcoholic Beverage - Where to Drink?

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:
<ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings:
<ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul>
As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.
Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.
Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.
The following is an in-depth review of Japan's retail sector, providing:

An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings:

Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.



As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/983/original/2020-07-09_06-09-15.png?1594242712" class="editor-image img-responsive" data-smartkarma-image-id="144983"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/988/original/2020-07-09_06-49-18.png?1594244977" class="editor-image img-responsive" data-smartkarma-image-id="144988"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/984/original/2020-07-09_06-12-06.png?1594242743" class="editor-image img-responsive" data-smartkarma-image-id="144984"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/986/original/2020-07-09_06-11-29.png?1594242800" class="editor-image img-responsive" data-smartkarma-image-id="144986"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/987/original/2020-07-08_07-13-50.png?1594243049" class="editor-image img-responsive" data-smartkarma-image-id="144987"></figure><div class="content-caption">Source • Japan Analytics</div>
<a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>-  Despite the strong performance from the group's grocery and drugstore chains, the Aeon group reported its first-ever quarterly operating loss on a 2% decline in sales. Aeon's full-year forecast for operating income of ¥100 billion suggests a further 42% erosion from the TTM results. Partly driven by an improving trend in residual income generation, the company's shares have risen by 35% over the last twelve months, outperforming the market and the Retail Sector by 36% and 26%, respectively. We consider the shares overvalued and recommend profit-taking. In the long-term, a rationalisation of the minorities - one of the largest for any listed Japanese company - is required here.
DAILY STATS
</div><hr><div>29 Quarterly Results</div><div><ul>
<li>
Results Score: 9 Positive / 0 Neutral / 29 Negative</li>
<li>
Average Results Score Change: -3.4</li>
<li>
Average % Change in Revenue: -9.8% Quarter YoY / +0.8% Rolling TTM YoY</li>
<li>
Average Operating Profit Margin Change: -1.4ppt</li>
</ul></div><hr><div> 13 Annual • 11 Interim Forecasts/Revisions</div><div><ul>
<li>
Annual Forecast/Revision Score: 5 Positive / 2 Neutral / 6 Negative</li>
<li>
Interim Forecast/Revision Score Change: 2 Positive / 1 Neutral / 8 Negative</li>
<li>Average Forecast/Revision Score Change: -5.5</li>
</ul></div>


Source • Japan Analytics
Aeon (8267 JP)-  Despite the strong performance from the group's grocery and drugstore chains, the Aeon group reported its first-ever quarterly operating loss on a 2% decline in sales. Aeon's full-year forecast for operating income of ¥100 billion suggests a further 42% erosion from the TTM results. Partly driven by an improving trend in residual income generation, the company's shares have risen by 35% over the last twelve months, outperforming the market and the Retail Sector by 36% and 26%, respectively. We consider the shares overvalued and recommend profit-taking. In the long-term, a rationalisation of the minorities - one of the largest for any listed Japanese company - is required here.
DAILY STATS
29 Quarterly Results

Results Score: 9 Positive / 0 Neutral / 29 Negative

Average Results Score Change: -3.4

Average % Change in Revenue: -9.8% Quarter YoY / +0.8% Rolling TTM YoY

Average Operating Profit Margin Change: -1.4ppt
 13 Annual • 11 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 5 Positive / 2 Neutral / 6 Negative

Interim Forecast/Revision Score Change: 2 Positive / 1 Neutral / 8 Negative
Average Forecast/Revision Score Change: -5.5


🇯🇵 JAPAN • Results & Revisions 8th July - Aeon Group - Sum < Parts

Japan

FamilyMart Co., Ltd. operates convenience store chains. The Company provides rice balls, hot snacks, stews, beverages, and other products. FamilyMart conducts businesses in China, Taiwan, South Korea, Thailand, and other countries and regions.

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FamilyMart Co Ltd (8028 JP)

Japan Retail Full Review 2020-2021: Some Retail Sectors Outperform in a Pandemic

An in-depth update for investors in Japan's retail and consumer space on Japan's retail sector by retail type as well as a review of the impact of...

Michael Causton

Japan's Convenience Store Chains Soften up Franchisees

The convenience store sector has had one of the worst years in its history, with falling same-store sales and market saturation. This has forced...

Michael Causton

CrossASEAN: Alcoholic Beverage - Where to Drink?

The pandemic has forced governments to implement lockdown/social distancing that has brought many difficulties for alcohol beverage companies in...

Henry Soediarko

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 8th July - Aeon Group - Sum < Parts

Aeon (8267 JP)- Despite the strong performance from the group's grocery and drugstore chains, the Aeon group reported its first-ever quarterly...

Campbell Gunn

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