Japan Retailers Profits:

 Article Source: https://mainichi.jp/english/articles/20230114/p2g/00m/0bu/008000c

Article:

TOKYO (Kyodo) -- Major Japanese retailers reported improved earnings for the nine months through November, with some posting record net profits and sales as eased pandemic restrictions helped revive consumption.

Aeon Co. said Friday that its operating profit rose 26.3 percent from a year earlier to 112.68 billion yen in the March-November period as sales grew 4.2 percent to an all-time high of 6.72 trillion yen on strong sales of food products under affordable private brands. Many retailers in Japan close their books in February.

Aeon's archrival Seven & i Holdings Co. said Thursday it logged a record net profit of 234.71 billion yen over the same period, up 34.2 percent from a year earlier, citing its solid convenience store business at home and abroad. Sales soared 43.5 percent to a record 8.82 trillion yen.

Ideas:

While it sounds good that major Japanese retailers saw earnings increase it must be remembered that some of the earnings might be related to increased prices due to increases in prices as some retailers might have passed on some of their product costs to the final customer.

But also of course it's no doubt at the overall restrictions in the Japanese economy have been reduced more and more consumers are out and about shopping or somewhat back to some kind of normal after two year or the covid situation.

It's no surprise that 7/11 had their sales increase as more and more consumers are now shopping at conbinis compared to other retail shopping areas.

Article:

Among convenience store operators, Lawson Inc. said earlier this week that net profit gained 7.2 percent to 26.12 billion yen in the nine-month span and sales jumped 41.1 percent to a record 737.39 billion yen.

Department store operators benefited from rising duty-free sales after the Japanese government eased COVID-19-related border restrictions on inbound tourists in the fall.

J. Front Retailing Co., operator of Daimaru and Matsuzakaya department stores, said late last month that operating profits surged more than four-fold to 20.10 billion yen over the nine months.

Ideas:

All convenience stores seems to be seeing large increases in sales as as price increase in other retail establishments seem to be an incentive for consumers to buy at conbinis compared to traditional supermarkets.

And yes, traditional department stores too, as a result of the Japanese government lifting travel restrictions are seeing a surge in sales due to international tourists.

But it's going to take some time for traditional department stores to make up for 2 years of lost sales due to the corid situation where even domestic sales were probably not so good.

But let's not forget that some of the increased profits might be related to the passing on of department store costs to the final customer.

Article:

Last month, Takashimaya Co. reported an operating profit of 22.86 billion yen, turning profitable in the March-November period for the first time in three years.

Sogo & Seibu Co. posted an operating loss of 1.3 billion yen in the period on a parent basis, narrower than its 6.3 billion yen in losses a year earlier.

Ideas:

As in any market economy there are going to be some good and not good good. For example Takashimaya finally turned a profit after three years of not so good profits while Sogo didn't do so good. 

Perhaps it might be considered that maybe customers might not feel Sogo and Seibu is not meeting their product or service needs and customers have moved on to other retailers that do have the products and services they want and need.

But in the retail market there are too many variables to really know exactly what one department store turned  profit while another didn't. Only time can tell and more data and analysis is needed to understand the difference in Takashimaya's situation and Sogo's situation too.

Have a nice day and be safe!