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. 

Event-Driven

<ul>
<li>The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.</li>
<li>But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.</li>
<li>This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.</li>
</ul>


The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.
But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.
This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.


Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Equity Bottom-Up

<ul>
<li>Tsuruha is the latest retailer to come under attack from an activist investment fund. </li>
<li>As with Seven &amp; I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.</li>
<li>The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.</li>
</ul>


Tsuruha is the latest retailer to come under attack from an activist investment fund. 
As with Seven &amp; I, the company fended off demands to shake up its board, crucially with the support of Aeon, its largest stakeholder.
The move will likely lead to some careful reconsideration of how Tsuruha and Aeon could work together and may even lead to a Welcia/Tsuruha merger.


Activists May Be Pushing Tsuruha Towards a Merger with Welcia

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Over the weekend there was an article in the Nikkei saying that <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> and <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> were considering a merger. Other media outlets followed.</li>
<li>This has been a possible outcome. <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.</li>
<li>This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for <a href="https://www.smartkarma.com/entities/matsukiyococokara-co" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">MatsukiyoCocokara (3088 JP)</a>. It would be 25% of the market. Questions will be asked about concentration. </li>
</ul>


Over the weekend there was an article in the Nikkei saying that Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) were considering a merger. Other media outlets followed.
This has been a possible outcome. Aeon Co Ltd (8267 JP) owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.
This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for MatsukiyoCocokara (3088 JP). It would be 25% of the market. Questions will be asked about concentration. 


Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Thematic (Sector/Industry)

<ul>
<li>If you need a quick overview of Japan's retail sectors and the winners and losers within, the following provides an update on 2023 and where things are headed in 2024.</li>
<li>Drugstore consolidation continues but so does the sector's encroachment on supermarkets while leaders in department stores are delivering record profits and lifestyle retailing is back.</li>
<li>Some of the best performers compared to initial forecasts include Matsuya, ABC Mart, Adastria, Isetan-Mitsukoshi, Takashimaya, Kintetsu, J Front Retailing and Lawson.</li>
</ul>


If you need a quick overview of Japan's retail sectors and the winners and losers within, the following provides an update on 2023 and where things are headed in 2024.
Drugstore consolidation continues but so does the sector's encroachment on supermarkets while leaders in department stores are delivering record profits and lifestyle retailing is back.
Some of the best performers compared to initial forecasts include Matsuya, ABC Mart, Adastria, Isetan-Mitsukoshi, Takashimaya, Kintetsu, J Front Retailing and Lawson.


Japan Retail Update: Winners and Losers as FY2023 Ends

<ul>
<li>Private brands developed and managed by retailers themselves offer plenty of price and marketing flexibility during these inflationary times.</li>
<li>But it is not only their popularity as cheaper alternatives that is growing, so too are pack sizes, as consumers increase shopping volume and reduce shopping trip frequency.</li>
<li>The trend is another sign of why investors should look out for retailers with good private brands, given the impact on both sales and margin growth.</li>
</ul>


Private brands developed and managed by retailers themselves offer plenty of price and marketing flexibility during these inflationary times.
But it is not only their popularity as cheaper alternatives that is growing, so too are pack sizes, as consumers increase shopping volume and reduce shopping trip frequency.
The trend is another sign of why investors should look out for retailers with good private brands, given the impact on both sales and margin growth.


Private Brands in Japan: Getting Bigger – Literally

Japan

MatsukiyoCocokara & Co. operates drug store chains. The Company retails medicines, cosmetics, health foods, beauty care products, and other products. MatsukiyoCocokara & also operates supermarkets and home centers.

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MatsukiyoCocokara (3088 JP)

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Activists May Be Pushing Tsuruha Towards a Merger with Welcia

This insight from last September looked at the likelihood of a merger attempt by Aeon between Welcia and Tsuruha. The reasons for this are similar...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Japan Retail Update: Winners and Losers as FY2023 Ends

Summary: Japan's retail sectors in 2023 saw drugstore consolidation and encroachment on supermarkets, while dept. stores and lifestyle retailing...

Michael Causton

Private Brands in Japan: Getting Bigger – Literally

Private brands offer price and marketing flexibility during inflation, and their popularity is increasing. Investors should focus on retailers...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

​Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Michael Causton

Activists May Be Pushing Tsuruha Towards a Merger with Welcia

This insight from last September looked at the likelihood of a merger attempt by Aeon between Welcia and Tsuruha. The reasons for this are similar...

Michael Causton

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger?

Over the weekend we have news suggesting Aeon is pushing Tsuruha and Welcia towards a merger after buying Oasis' Tsuruha stake. Both stocks are up....

Travis Lundy

Japan Retail Update: Winners and Losers as FY2023 Ends

​Summary: Japan's retail sectors in 2023 saw drugstore consolidation and encroachment on supermarkets, while dept. stores and lifestyle retailing...

Michael Causton

Private Brands in Japan: Getting Bigger – Literally

​Private brands offer price and marketing flexibility during inflation, and their popularity is increasing. Investors should focus on retailers...

Michael Causton

Merger between Welcia and Tsuruha under Aeon may happen as FMCG-drugstores increasingly compete with supermarkets and CVS, so we need to view the...

Summary: Japan's retail sectors in 2023 saw drugstore consolidation and encroachment on supermarkets, while dept. stores and lifestyle retailing...

Private brands offer price and marketing flexibility during inflation, and their popularity is increasing. Investors should focus on retailers...