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. 

Equity Bottom-Up

<p>The merger of <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a> and <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> is just one symptom of the growing concentration of market share in the drugstore sector.</p><p>But the sector's leaders are no longer just battling for dominance in drugstore retailing; increasingly drugstores are evolving far behind this niche sector.</p><p>Drugstore retailing is growing faster than any sector other than e-commerce because drugstores are positioned to meet customer needs for well-being, health and, nowadays, a broad range of daily necessities including food, and so becoming ever more integrated into consumers’ daily shopping experience.</p><p>Their eclectic ranges also mean they perform well in the middle of natural disasters and crises of various forms and many chains have seen good results thanks to earthquakes, extreme weather and especially thanks to Covid, but this doesn’t fully explain the sector’s success.</p><p>Crises may have helped, but Japan’s top drugstores are today some of the country’s best retailers in their own right.</p><p>The following is a complete, in-depth review of the drugstore sector, including rankings, KPIs, and future trends on the sector and the potential winners.</p><p><strong>Jun Tsuruha, the current <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> CEO, was widely quoted last year as saying the sector would soon be dominated by just “four or five” major firms. This is far from fantasy, with Tsuruha, <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>, Matsukiyo-Cocokara, <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a> and <a href="https://www.smartkarma.com/entities/sugi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:9255:1" rel="noopener">Sugi Holdings (7649 JP)</a> the most likely contenders.</strong></p>

The merger of Matsumotokiyoshi Holdings Co., Ltd. (3088 JP) and Cocokara Fine (3098 JP) is just one symptom of the growing concentration of market share in the drugstore sector.But the sector's leaders are no longer just battling for dominance in drugstore retailing; increasingly drugstores are evolving far behind this niche sector.Drugstore retailing is growing faster than any sector other than e-commerce because drugstores are positioned to meet customer needs for well-being, health and, nowadays, a broad range of daily necessities including food, and so becoming ever more integrated into consumers’ daily shopping experience.Their eclectic ranges also mean they perform well in the middle of natural disasters and crises of various forms and many chains have seen good results thanks to earthquakes, extreme weather and especially thanks to Covid, but this doesn’t fully explain the sector’s success.Crises may have helped, but Japan’s top drugstores are today some of the country’s best retailers in their own right.The following is a complete, in-depth review of the drugstore sector, including rankings, KPIs, and future trends on the sector and the potential winners.Jun Tsuruha, the current Tsuruha Holdings (3391 JP) CEO, was widely quoted last year as saying the sector would soon be dominated by just “four or five” major firms. This is far from fantasy, with Tsuruha, Welcia Holdings (3141 JP), Matsukiyo-Cocokara, Cosmos Pharmaceutical (3349 JP) and Sugi Holdings (7649 JP) the most likely contenders.

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

Event-Driven

<p>After more than a year of negotiations and preparation, <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a> and <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> finally confirmed their agreement to merge in October this year. The new company will be by far the largest in the drugstore sector.</p><p>A lot of work has been done already to consolidate operations and the aim is to complete integration by 2023. The combined company will target sales of ¥1.5 trillion by 2026.</p><p><strong>Private brands will be a crucial competitive weapon for the merged chain and also provide opportunities to offer wholesale toiletries and cosmetics floors at supermarkets.</strong></p><p>The growing competitiveness in the sector amidst increased saturation demands greater scale and will spur the leading players like <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> and <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> to make further acquisitions to catch up with the new leader. </p>

After more than a year of negotiations and preparation, Matsumotokiyoshi Holdings Co., Ltd. (3088 JP) and Cocokara Fine (3098 JP) finally confirmed their agreement to merge in October this year. The new company will be by far the largest in the drugstore sector.A lot of work has been done already to consolidate operations and the aim is to complete integration by 2023. The combined company will target sales of ¥1.5 trillion by 2026.Private brands will be a crucial competitive weapon for the merged chain and also provide opportunities to offer wholesale toiletries and cosmetics floors at supermarkets.The growing competitiveness in the sector amidst increased saturation demands greater scale and will spur the leading players like Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) to make further acquisitions to catch up with the new leader. 

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

'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.

Thematic (Sector/Industry)

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><div><p>Tuesday's 'best' and 'worst' larger-cap announcements came from <a href="https://www.smartkarma.com/entities/askul-corp" target="_blank" data-smartkarma-citation="entities:16807:1" rel="noopener">Askul (2678 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha (3391 JP)</a>. For more, see the <strong>DETAIL</strong> section below. Of the 21 results announcements, 48% scored positively for earnings momentum. Trailing revenues are still declining  - by 8.3% on average, while quarterly revenues fell by 5.6% year-on-year. Trailing operating margins saw an average 5.2 point decline. 29% of companies were in the red for the quarter.  67% of the 43 annual forecasts/revision announcements scored positively. The average Forecast/Revision score was a positive 6.2 points.</p></div><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/194/919/original/image?1615934988" class="editor-image img-responsive" data-smartkarma-image-id="194919"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/194/918/original/image?1615934987" class="editor-image img-responsive" data-smartkarma-image-id="194918"></figure></section>

• BEST &amp; WORST •Tuesday's 'best' and 'worst' larger-cap announcements came from Askul (2678 JP) and Tsuruha (3391 JP). For more, see the DETAIL section below. Of the 21 results announcements, 48% scored positively for earnings momentum. Trailing revenues are still declining  - by 8.3% on average, while quarterly revenues fell by 5.6% year-on-year. Trailing operating margins saw an average 5.2 point decline. 29% of companies were in the red for the quarter.  67% of the 43 annual forecasts/revision announcements scored positively. The average Forecast/Revision score was a positive 6.2 points.

🇯🇵 JAPAN • Results & Revisions 03/​​16 - Askul & Tsuruha

<p><strong>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.</strong></p><p>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.</p><p>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.</p><p>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. </p>

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

<p style="text-align: center;"><strong>• $ BREAKOUT •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/831/original/2021-01-11_09-50-40.png?1610326256" class="editor-image img-responsive" data-smartkarma-image-id="181831"></figure></section><p><strong>NEW $ HIGH</strong> - The TOPIX index posted a new post-bubble high in US dollar terms on Friday, exceeding the previous high of January 31st 2018. A new high in Yen terms is only 3% away and, given the current sentiment, should also be reached this month. As the market factors in the possibility of a return to commodity inflation and digests another State of Emergency, the <strong>Technology Hardware</strong> Sector joins <strong>Electrical Equipment</strong> and <strong>Machinery</strong> in Overbought territory. <strong>Energy</strong> and<strong> Metals</strong> stocks have seen a significant rebound while the COVID 'losers' <strong>Restaurants</strong>, <strong>Transportation</strong>, <strong>Real Estate</strong> &amp; <strong>REITs</strong>, and <strong>Consumer Service</strong>s Sectors search for new relative lows.   </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/832/original/2021-01-11_10-55-08.png?1610330120" class="editor-image img-responsive" data-smartkarma-image-id="181832"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/833/original/2021-01-11_10-55-34.png?1610330145" class="editor-image img-responsive" data-smartkarma-image-id="181833"></figure></section><p><strong>MARKET PER 33X</strong> -The market rally has pushed the forward earnings multiple back up to 33 times discounting one or more years of recovery.  </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/875/original/2021-01-11_14-38-44.png?1610343543" class="editor-image img-responsive" data-smartkarma-image-id="181875"></figure></section><p><strong>SECTOR OP TRENDS</strong> - The only Sectors with rising operating income over the last three months are<strong> Energy</strong>, <strong> Internet Content &amp; Services</strong>, <strong>Food Beverages &amp; Tobacco</strong>,  <strong>Utilities</strong> and <strong>Other Consumer Products</strong>. The largest declines are in<strong> Consumer Services</strong>,<strong> Transport</strong>, <strong>Restaurants</strong>, <strong>Healthcare</strong> and <strong>Telecommunications</strong>.   </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/876/original/2021-01-11_14-54-40.png?1610344493" class="editor-image img-responsive" data-smartkarma-image-id="181876"></figure></section><section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/878/original/2021-01-11_14-58-55.png?1610344748" class="editor-image img-responsive" data-smartkarma-image-id="181878"></figure></section><p><strong>REVISIONS ▲ RESULTS ►</strong> - Our momentum-based scoring methodology has seen a strong upturn in the Forecast/Revision Score and a more muted recovery in the trailing Results Score. The Sectors with the strongest upward momentum are <strong>Autos</strong>, <strong>Machinery</strong>,<strong> Electrical Equipment</strong>, <strong>Metals</strong> and <strong>Multi-Industry</strong>-  all but the last have outperformed over the last three months. Lagging Sectors include <strong><a href="https://www.dropbox.com/s/efjcusx11m46con/2021-01-11_15-29-27.png?dl=0" target="_blank" rel="noopener">Media</a></strong>, <strong>Non-Bank Finance</strong>,<strong> Information Technology</strong>, <strong>Retail</strong>, <strong>Energy</strong> and <strong>Transportation</strong>. </p></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/880/original/2021-01-11_15-14-41.png?1610345693" class="editor-image img-responsive" data-smartkarma-image-id="181880"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/881/original/2021-01-11_15-29-27.png?1610346581" class="editor-image img-responsive" data-smartkarma-image-id="181881"></figure></section><hr><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">Friday's best and worst large-cap pairing is cutting-tool specialist <a href="https://www.smartkarma.com/entities/osg-corp" target="_blank" data-smartkarma-citation="entities:19178:1" rel="noopener">OSG (6136 JP)</a> and drugstore <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia (3141 JP)</a>.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/937/original/2021-01-12_06-44-33.png?1610401488" class="editor-image img-responsive" data-smartkarma-image-id="181937"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/938/original/2021-01-12_06-45-03.png?1610401520" class="editor-image img-responsive" data-smartkarma-image-id="181938"></figure></section>

• $ BREAKOUT •NEW $ HIGH - The TOPIX index posted a new post-bubble high in US dollar terms on Friday, exceeding the previous high of January 31st 2018. A new high in Yen terms is only 3% away and, given the current sentiment, should also be reached this month. As the market factors in the possibility of a return to commodity inflation and digests another State of Emergency, the Technology Hardware Sector joins Electrical Equipment and Machinery in Overbought territory. Energy and Metals stocks have seen a significant rebound while the COVID 'losers' Restaurants, Transportation, Real Estate &amp; REITs, and Consumer Services Sectors search for new relative lows.   MARKET PER 33X -The market rally has pushed the forward earnings multiple back up to 33 times discounting one or more years of recovery.  SECTOR OP TRENDS - The only Sectors with rising operating income over the last three months are Energy,  Internet Content &amp; Services, Food Beverages &amp; Tobacco,  Utilities and Other Consumer Products. The largest declines are in Consumer Services, Transport, Restaurants, Healthcare and Telecommunications.   REVISIONS ▲ RESULTS ► - Our momentum-based scoring methodology has seen a strong upturn in the Forecast/Revision Score and a more muted recovery in the trailing Results Score. The Sectors with the strongest upward momentum are Autos, Machinery, Electrical Equipment, Metals and Multi-Industry-  all but the last have outperformed over the last three months. Lagging Sectors include Media, Non-Bank Finance, Information Technology, Retail, Energy and Transportation. • BEST &amp; WORST •Friday's best and worst large-cap pairing is cutting-tool specialist OSG (6136 JP) and drugstore Welcia (3141 JP).

🇯🇵 JAPAN • New Post Bubble $ High + Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​08

Japan

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

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Tsuruha Holdings (3391 JP)

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

The Japanese drugstore sector has seen a big merger but there will be more as the sector not only consolidates down to a few leaders but also...

Michael Causton

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

The merger of Matsukiyo and Cocokara will force further consolidation through M&A in the drugstore sector as regional powerhouses begin to clash as...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/16 - Askul & Tsuruha

Tuesday's 'best' and 'worst' larger-cap announcements came from Askul (2678 JP) and Tsuruha (3391 JP). For more, see the DETAIL section below.

Campbell Gunn

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 • New Post Bubble $ High + Results & Revisions 01/08

NEW $ HIGH - The TOPIX index posted a new post-bubble high in US dollar terms on Friday, exceeding the previous high of January 31st 2018. A new...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

The Japanese drugstore sector has seen a big merger but there will be more as the sector not only consolidates down to a few leaders but also...

Michael Causton

Matsukiyo-Cocokara Merger Heralds New Era for Drugstores

The merger of Matsukiyo and Cocokara will force further consolidation through M&A in the drugstore sector as regional powerhouses begin to clash as...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 03/​​16 - Askul & Tsuruha

Tuesday's 'best' and 'worst' larger-cap announcements came from Askul (2678 JP) and Tsuruha (3391 JP). For more, see the DETAIL section below.

Campbell Gunn

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 • New Post Bubble $ High + Results & Revisions ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​01/​​​08

NEW $ HIGH - The TOPIX index posted a new post-bubble high in US dollar terms on Friday, exceeding the previous high of January 31st 2018. A new...

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 03/16 - Askul & Tsuruha

🇯🇵 JAPAN • New Post Bubble $ High + Results & Revisions 01/08