Daiei Inc (TYO:8263)

QUOTE AND NEWS
Japan Today  Apr 8  Comment 
Supermarket chain operator Daiei Inc said Friday it logged a group operating profit of 3.24 billion yen in the business year ended in February, marking…
Japan Today  Jan 8  Comment 
Supermarket chain operator Daiei Inc said Friday its group operating loss shrank to 522 million yen in the March to November period from 4.04 billion…
Japan Today  Oct 10  Comment 
Daiei Inc booked a 1.62 billion yen group net loss in the March to August period amid slumping sales, posting the second consecutive first-half net…
Japan Today  May 16  Comment 
Supermarket chain operator Daiei Inc has unveiled a three-year management plan that includes opening about 50 outlets during the period through fiscal 2012. Under the…
Japan Today  Apr 28  Comment 
Daiei Inc said Tuesday that Japanese investment fund Advantage Partners LLP, which had supported the supermarket chain operator's rehabilitation as a major shareholder, has sold…
Reuters  Apr 26  Comment 
Japanese retailer Daiei Inc said on Tuesday that an investment vehicle of private equity firm Advantage Partners has sold its 11.7 percent stake in Daiei to a Japanese unit of Deutsche Bank .
Japan Today  Apr 19  Comment 
Struggling supermarket chain Daiei Inc will aim to return to the black on a net balance level in the financial year through February 2013 by…
Japan Today  Apr 10  Comment 
Supermarket chain Daiei Inc said Friday it posted a group operating loss in fiscal 2009 for the first time since it began reporting consolidated earnings…
Japan Today  Apr 3  Comment 
Daiei Inc said Friday it has slashed its group operating loss outlook to 1.2 billion yen from an earlier estimated 3.5 billion yen loss in…
Japan Today  Jan 9  Comment 
Major supermarket chain Daiei Inc said Friday it now expects a 3.5 billion yen group operating loss in the business year to Feb 28 against…




 
TOP CONTRIBUTORS

Daiei, Inc. (TYO:8263) operates supermarkets, discount stores, department stores, and specialty shops in Japan. Its other businesses include restaurants, hotels, and real estate services. The company faces a challenging consumer spending environment in Japan as the economy recovers from the March 2011 earthquake.

Company Overview

News Updates

  • Daiei says it will double capital expenditures to JPY 28.1 billion ($341 million) in the year ending in February 2012. The money will be used to renovate the nonfood sales sections of existing stores, as well as to open new shops. Daiei plans to launch 22 stores in fiscal 2012, with 15 to be discount stores, up from 2 last year.[1]

Business Segments

The company operates two business segments:

  • The Retail segment operates supermarkets and discount stores, as well as specialty stores which sell predominantly books and women’s clothing. In addition, this segment provides services such as food processing, leasing, and transportation
  • The Real Estate segment is engaged in the operation of commercial facilities and the leasing of real estate.

As of February 2011, Daiei had 26 consolidated subsidiaries and six associated companies.[2]

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]

Competition

Daiei competes in the Japanese consumer goods retail space in Japan. Selected competitors include:

  • Aeon Co Ltd (TSE:8267) operates general merchandise stores, supermarkets, convenience stores, and department stores in Japan, North America, and Asia.
  • 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.

References

  1. Businessweek “DAIEI INC (8263:Tokyo)”
  2. Google Finance “The Daiei”
  3. JP Morgan analyst report, 27 May 2011
  4. Daiwa Capital Markets, “Future slowdown in personal consumption a concern”
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