Aeon Co Ltd (TSE:8267)

Japan Today  Jun 30  Comment 
Japanese retailer Aeon on Monday opened a giant mall in Phnom Penh, Cambodia -- the first Japanese shopping mall in the country. Cambodian Prime Minister Hun Sen and Japanese Foreign Minister Fumio Kishida presided over the opening of the $205...
Biomass Magazine  May 8  Comment 
Konza Renewable Fuels and Aeon Energy Solutions are pleased to announce a full scale commercial 100,000 metric ton per year torrefaction system has been ordered. Expected delivery is early 2015 to a European based corporation.
JCN Network  Apr 28  Comment 
Sharp Corporation has received an order from Aeon Co., Ltd. and Aeon Mall Co., Ltd. (hereinafter the Aeon Group) to supply solar power generation systems for Aeon Mall Phnom Penh in Cambodia.
Japan Today  Mar 14  Comment 
Japanese retail giant Aeon Co sliced close to a fifth off profit estimates for its latest business year, saying efforts to cut costs at its core general goods stores fell short of target and tough competition bit into its supermarket...


Aeon Co. (TSE:8267) operates general merchandise stores, supermarkets, convenience stores, and department stores in Japan, North America, and Asia. Aeon’s specialty stores sell retail women's apparel, casual wear items, cosmetics, toiletries, and shoes. The company also offers services including shopping center development and rental, credit card operations, consumer financing, amusement facility operations, and restaurants and store maintenance. Aeon is headquartered in Chiba-shi, Japan.

Company Overview

News Updates

  • Aeon projects a net profit despite asset retirement obligations and posting of earthquake-related

extraordinary losses (initial guidance projected these at ¥20 bn and ¥30 bn respectively).[1]

The following is an overview of Aeon’s business segments[2]

  • GMS and other retail store operations (70% of 2010 revenue): Core services include 468 Aeon general stores, 732 supermarkets, discount stores, and “strategic small size” stores such as convenience stores, small supermarkets, and food services. Brands include Ministop, My Basket, and Origin Toshu.
  • Service and other operations (18% of 2010 revenue): Core services include financial services, building maintenance, entertainment, and business supply.
  • SC development operations (3% of 2010 revenue): Shopping center development operations develop and manage large-scale shopping malls across Japan. This unit has started to develop malls in China, with the first large mall opening in Beijing in 2008.
  • Specialty store operations (9% of 2010 revenue): Specialty stores operate in malls and stand-alone shops, catering to specific customer lifestyles. In addition, this segment includes drugstores and pharmacies.

Trends and Forces

Expectation of Future Tax Hikes and Higher Electricity Bills Drags Spending

The Japanese government is considering a few tax measures as means of financing post-quake reconstruction. These measures include (i) a 10% increase in income tax for 3-5 years (yielding an ¥1.3 trillion annually), (ii) a modest increase in consumption tax (a 2-3% increase from FY2012 onward for two-three years only; each 1% increase would raise around ¥2.5 trillion), and (iii) a possible increase in electricity charges related to the nuclear power plant problems and a higher burden for the public. On the other hand, recovery may continue as aggregate retail same-store sales in Japan recovered to 1.4% year-over-year growth in April from a 3.5% decline in March following the earthquake.[3]

Japanese Slowdown from Earthquake

Consumers may continue to rein in spending if the Japanese economy remains lackluster for the time being. Consumer spending could remain weak for a longer period in light of deteriorating employment and income coupled with rapid cooling of consumer sentiment. Sales of discretionary goods will likely be sluggish as this trend continues. Some analysts see consumer sentiment as unlikely to recover until 2012, given the nuclear power plant issue and political uncertainty.[4]


Aeon competes in the Japanese consumer goods retail space in Japan, as well as several other countries. Selected competitors include:

  • Daiei Inc (TYO:8263) owns 2000 stores including department stores, supermarkets, discount stores, restaurants, and hotels.
  • Seven & I Holdings (BER:S6M) engages in the retail business in Japan and North America, operating convenience stores, supermarkets, restaurants, and financial services.
  • UNY Co (TSE:8270) operates in the retail, financial, and real estate business in Japan and Hong Kong.
  • Izumi CO LTD (TYO:8273) operates 85 supermarkets and stores in Chugoku, Kyushu, and other regions in Japan.


  1. Goldman Sachs analyst report, 20 June 2011
  2. Aeon 2010 Annual report
  3. JP Morgan analyst report, 27 May 2011
  4. Daiwa Capital Markets, “Future slowdown in personal consumption a concern”
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