Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Two and a half years ago, <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2O Retailing (8242 JP)</a> the 10.9% owner, arranged to merge its own units into <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> to get control. OK Corp complained.</li>
<li>
OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. </li>
<li>
H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. </li>
</ul>


Two and a half years ago, H2O Retailing (8242 JP) the 10.9% owner, arranged to merge its own units into Kansai Super Market (9919 JP) to get control. OK Corp complained.

OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. 

H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. 


Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

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)

<ul>
<li>FMCG retailers remained dominant and market concentration increased, with top firms expanding through consolidation. </li>
<li>Discounters, drugstores and e-commerce outperformed the market overall, while general merchandise stores and apparel/lifestyle declined.</li>
<li>Profitability varied significantly, but discounters stood out as consumers flocked to their stores to escape inflation where they could.</li>
</ul>


FMCG retailers remained dominant and market concentration increased, with top firms expanding through consolidation. 
Discounters, drugstores and e-commerce outperformed the market overall, while general merchandise stores and apparel/lifestyle declined.
Profitability varied significantly, but discounters stood out as consumers flocked to their stores to escape inflation where they could.


Japanese Big Retailers: Winners and Losers

<ul>
<li>Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. </li>
<li>The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.</li>
<li>Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.</li>
</ul>


Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. 
The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.
Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.


[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

<ul>
<li>Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.</li>
<li>The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.</li>
<li>This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.</li>
</ul>


Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.
The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.
This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.


Equity Bottom-Up

<ul>
<li>Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already. </li>
<li>OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive</li>
<li>While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.</li>
</ul>


Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already. 
OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive
While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.


OK Super: Disrupting Kansai Supermarket Sector

Japan

H2O RETAILING CORPORATION founded in Osaka in 1929, operates railway terminal department stores.  The Company's main store is located at Hankyu terminal in Umeda (Osaka) and sells clothing, foods, sundry goods, furniture, and household utensils.  H2O Retailing also operates restaurants and coffee shops.

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H2O Retailing (8242 JP)

Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

Kansai Super Market (aka Kansai Food Market) was the vehicle for an RTO in late 2021 to the detriment of minorities. Now minorities are being...

Travis Lundy

Japanese Big Retailers: Winners and Losers

An in-depth review of Japan retailers with sales of ¥250+ in 2025: FMCG retailers dominate with market concentration increasing, discounters...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

OK Super: Disrupting Kansai Supermarket Sector

OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

Kansai Super Market (aka Kansai Food Market) was the vehicle for an RTO in late 2021 to the detriment of minorities. Now minorities are being...

Travis Lundy

Japanese Big Retailers: Winners and Losers

An in-depth review of Japan retailers with sales of ¥250+ in 2025: ​FMCG retailers dominate with market concentration increasing, discounters...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

​Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

OK Super: Disrupting Kansai Supermarket Sector

​OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...

Michael Causton

An in-depth review of Japan retailers with sales of ¥250+ in 2025: FMCG retailers dominate with market concentration increasing, discounters...

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

OK Super's entry into the Kansai market is shaking up local competitors with its deep discounts, posing a threat to existing chains lacking...