Overall of Conveinient Stores Market in japan

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Japanese Conveinient Stores Industry, including major trends, phenomena, new business actions by major players, such as; Seven Eleven, Lawson, Family Mart, etc with e-Commerce, Aging business, etc.

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Overall of Conveinient Stores Market in japan

  1. 1. Outline of Japanese Convenience Stores Markets 20101029 / Cozy Mizoguchi cozymizo@hotmail.co.jp / +81-80-1205-8448 Cozy Mizoguchi, all rights reserved 2010
  2. 2. - Size of CVS Industry:6.506 trillion yen - Net Profit to Sales: +0.9 % - Year over Year Growth Rate: -3.8 % - Gross Assets; 5.553 trillion yen # of Employees: 27,960 - Ave age: 37.7 - Ave Lengths of Services: 10.6 years - Ave Annual Income : 5.5 million yen Cozy Mizoguchi, all rights reserved / Sept, 2010 1 Outline of Japanese CVS Industry in 2009                          Size of industry Growth Rate Profitability Ave Income per employee Labor Population Seniority per employee 2004 2005 2006 2007 2008 2009 Units; trillion yen Resource from Gyokai-search in 2010
  3. 3. TOP 10 CVS Company Sales % Sales Share 1 Seven Eleven 1.968 30.2 Lawson 1.666 25.6 3 Family Mart 1.274 19.6 4 Circle K Sunkus 0.923 13.9 5 Mini Stop 0.300 4.6 6 99 Plus 0.135 2.1 7 Three F 0.106 1.6 8 Poplar 0.095 1.5 9 Daily Yamazaki 0.059 0.9 Cozy Mizoguchi, all rights reserved / Sept, 2010 2 Major Players in Japanese CVS Market                           Net Income 44.8 12.5 15.1 5.5 1.6 1.6 - 0.28 0.15 <Units>Sales trillion yen / Net Income; billion yen Resource from Logistic Partners. Inc in 2010
  4. 4. Cozy Mizoguchi, all rights reserved / Sept, 2010 3 Trends of Outlets                         Trend of CVS Outlets Residential Population per 1 CVS HOKKAIDO MIYAGI TOKYO NARA SHIMANE NAGASAKI Resource from NIKKEI / NEKKEI BP in 2008 44,391 outlets in 2008 *resources from MIC, GarbageNews.com Reasonable # of 1 CVS in Residential Population = 2,000 – 3,000, Currently Nationwide Average for Residential Population = 3,000 # of CVS Already Saturated
  5. 5. Cozy Mizoguchi, all rights reserved / Sept, 2010 4 Value for Japanese CVS                          The Biggest Value of CVS = TIME SAVER - Anytime, Anywhere, You Can Get You Want / Need! - SKU = more than 3,000 items - Services / Commodities; From Rice balls, Boxed Lunch, Beverage, etc, to Utilities Payments Services, ATM, etc Resource from NEKKEI BP in 2009 Popular Items / Services @ CVS Foods, Beverages ATM Parcel Delivery Magazines Utilities Payments Daily Necessities Postal Others Convenient Services among Newly Featured ATM Net Services Emergency Evacuation related Cleaning Services Utilities Payments Foods Delivery Hair Cut Welfare Services Babysitting Services Community Services
  6. 6. Cozy Mizoguchi, all rights reserved / Sept, 2010 5 Fundamentals of Japanese CVS                          Basic Schemes of POS Bar-code scanners set up @ each stores can read every each items/commodities through cash register, transferring those data automatically in real-time to franchisees' stores computer + HQ host computer, so that HQ can easily accumulate those data as "trends" of current market, based solely on actual users buying behaviors. Cash register machine is also equipped with the function of clustering each customer by Gender, Age brackets, for effective marketing data. CVS can maximize this POS as not only reflecting to commodities line-up / marketing strategy, but also efficient distribution scheme by minimizing disposal items. In addition, Franchisees can also make use of this data in the case of their ordering to CVS HQ. Efficient / Lower costs of Distribution Basically, CVS are delivering their items/goods including mainly lunch, rice balls, beverages, etc 2-3times a day. In the case of Lawson with around 9,000 outlets nationwide in Japan, Every 3times x around 9,000 stores are about 27,000times distributions per 1 day. Hence, to construct the efficient distribution scheme is the bedrock for CVS business, on the backgrounds of: - Lowering distribution costs - Minimizing operation burden - Reducing the risks of delivery NOT popular commodities - Caring eco-friendly attitude *all delivery by Trucks with emission *CVS has been paving cooperative distribution scheme, enabling each vendors to deliver their commodities to 1 CVS distribution centers in each territories and deliver all items from that center. The Bedrock of CVS = POS SCM + CRM⇒ Suppliers Wholesalers Cooperative Distribution Center C V S
  7. 7. Cozy Mizoguchi, all rights reserved / Sept, 2010 6 Current Main Difficulties CVS Facing                          TIME SAVER Business; CVS < Internet Main Commodities: CVS Foods < Fast Foods Chain And, Disposable issues, Deflation, Aging Society….. Daily Sales @ 1 CVS a day: 149,000 = the lowest level Demand for Foods Delivery, Net ServicesPosi tive Bett er Neu tral Negative Not at all Demand for Welfare / Nursing Services Posi tive Bett er Neu tral Negative Not at all Resource from NEKKEI BP in 2009
  8. 8. Cozy Mizoguchi, all rights reserved / Sept, 2010 7 Financial Performance Comparison                         SAFETY 1) Current Ratio 85.13% 110.75%   2) Fixed Ratio 56.60% 111.87%   3) Fixed Assets to Fixed Liability Ratio 45.21% 62.82%   4) Capitol Ratios 46.58% 12.45%   5) Debt Ratio 114.67% 704.70%   6) Receivables Turnover 32.52 2.23   7) Inventories Turnover 294.50 0.94 EFFICIENCY 1) Total Assets Turnover 3.57 0.17 CASH FLOW 1) Cash Flow 46,184,000,000 66,413,000,000 PROFITABILI TY 1) Operating Profit on Sales 3.16% 18.99%   2) Recurring Profit Margin 2.71% 18.40%   3) Profits Margin on Sales 1.62% 17.96%   4) ROE 13.30% 24.50%   5) Return on Capital Employed 12.46% 3.04%   6) Gross Costs on Sales   77.58% 23.48% PRODUCTIBIT Y 1) Added Value / Gross Margin 178,590,000,000 110,679,000,000   2) Payroll per 1 employee 8,909,179 8,449,118   3) Labor Productivity 67,388,353 46,822,323   4) Marin generated per 1 employee 4,879,676 10,989,741   5) Capital-Intensive Indicator 22,174,894 4,005,745   6) Capital Intensity of Labor 84,105,669 360,942,963   7) Added Value / Gross Margin on Sales 22.42% 76.51% The Biggest Internet Mall = Rakuten with Higher, Favorable Financial Condition
  9. 9. Cozy Mizoguchi, all rights reserved / Sept, 2010 8 Alliances Relations in Japanese CVS Industry                          x Resource from NEKKEI BP in 2009
  10. 10. Cozy Mizoguchi, all rights reserved / Sept, 2010 10 Next Actions by Japanese CVS                          What are New & next moves? E-Commerce Entertainments Foods DeliveryPoint System Discount Chain Welfare Service Digital MKTG Private Brands Premium Items Fresh Foods < Internet > < Aging > < Foods > Each for the details separately
  11. 11. Cozy Mizoguchi, all rights reserved / Sept, 2010 11 3Majors Financial Performances                          < Single Performance > Net Sales;271billion yen / 97.1% Operating Profits;45billion / 95.9% Current Profits: 44billion / 94.2% Net Income: 21billion / 93.6% Cash Flow: OCF; 2010>12,562b / 2009>25,306b, FCF: -29,138/21,158 - Net Sales: 535 billion yen / 98.9% *comparison with FY2008 - Operating Income: 156 billion yen / 87.7% - Current Profits: 164 billion yen / 87.4% - Net Income: 92 billion yen / 86.2% - % of Franchisees Revenue: 76.22% - Net Sales: 467 billion yen / 133.7% - Operating Income: 50 billion yen / 102.2% - Current Profits: 49 billion yen / 101.3% - Net Income: 12 billion yen / 52.8% *Extraordinary Loss; 10billion yen ** Consolidated w/ 99Plus % of Franchisees Revenue: 67.60% - Net Sales: 278 billion yen / 96.8% - Operating Income: 33 billion yen / 91.8% - Current Profits: 35 billion yen / 90.6% - Net Income: 15 billion yen / 91.8% - % of Franchisees Revenue: 57.93%

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