Major supermarkets are facing reduced profits， an abnormal situation where they are posting successive losses， and are struggling to stay in business as they are caught between manufacturers and consumers．
*Published on 11/16 (Sat) 6:02 Toyo Keizai Online While consumers are tightening their purse strings, procurement costs continue to soar. In stark contrast to the previous term, the food supermarket industry is facing a tough situation this term. Major supermarket chains have now released their interim financial results for the fiscal year ending February 2025 (March to August 2024). A symbolic example was United Supermarket Holdings (USMH), a consortium of three supermarkets in the metropolitan area under Aeon. Sales increased 1.6% from the same period last year to 358.3 billion yen, but operating profit was a loss of 600 million yen (compared to a profit of 1.8 billion yen in the same period last year). The fact that one of the largest companies fell into the red surprised people inside and outside the industry. This company is not alone. Yamazawa, the local chain with the largest market share in Yamagata Prefecture, also recorded an operating loss of 600 million yen this fiscal year, a reversal from a 500 million yen profit in the previous fiscal year. Izumi in Chugoku and Shikoku (operating profit down 22% year-on-year to 12 billion yen) and Arcs in Hokkaido and Tohoku (operating profit down 9% to 7.1 billion yen) also continued to report poor financial results. ■Caught between a desire to save and rising costs The biggest factor is the price hikes on a variety of products. Last year, price increases were a factor that led to increased average customer spending and profitability, but this fiscal year they are facing headwinds. Prices have stabilized since 2023, when more than 30,000 food items were increased, but according to Teikoku Databank, price increases of less than 13,000 items are expected in 2024 as well. Among fresh produce, the price of pork has risen significantly. An executive at one supermarket said, “Purchase prices have increased by about 1.5 times since last year.” Pork is a best-selling item at supermarkets, and price is easily influenced by consumer purchasing behavior. It would be ideal if all price increases by manufacturers could be reflected in retail prices, but supermarkets have circumstances that prevent them from doing so. Over the past few years, as inflation has continued, many industry insiders have pointed to the polarization of consumption. This means that while consumers are saving on everyday expenses, they are increasingly spending more on holidays and other events. A mid-level employee at a major company in the industry said, “The polarization trend has continued this year,” but added, “We purchased the same amount of goods as last year, when high-value-added prepared foods sold well, but higher-priced items did not sell as well as expected, leading to increased waste and clearance items, and we were unable to make a profit on our gross profit margins.” The desire to save money is stronger than ever. Continue reading ↓ ※ Previous thread Major supermarkets experience reduced profits, abnormal situation of successive losses, difficult management due to being “caught between” manufacturers and consumers [Gure★] ★ 2024/11/16 (Sat) 16:05:46.17.
>>1 The reason real wages in Japan aren’t rising is because Japan is in deflation. And the reason Japan is in deflation is because more people are becoming dependent on social security (taxes) for their livelihood. Even if money is distributed to people who rely on social security, such as pensioners and those on welfare, and whose incomes do not increase through economic activity, they will try to maximize the effect of that money by purchasing cheaper products. Trading companies trying to meet that demand then import cheaper substitutes from third countries, filling the Japanese market with cheaper goods. Manufacturing industries that cater to domestic demand respond to deflation by reducing employee wages in order to combat rising import prices of raw materials. For Japan to overcome deflation and raise real wages, it has no choice but to either use exports and inbound tourism to absorb overseas inflation into the country or cut social security spending. The ones who are leading Japan into decline are the Democratic Party, which destroyed the export industry with its policy of an extremely strong yen, and those who are broadly interpreting Article 25 of the Constitution and making social security a sanctuary.
>>1 Since the coronavirus pandemic ended, life has just changed. This is biased reporting by people who hate Japan so much that they want to make it seem like Japan’s economy is in a bad state. Zensho operating profit: 41.1 billion yen (up 161% from the previous year) McDonald’s operating profit: 37.1 billion yen (up 14% from the previous year) Skylark operating profit: 19.3 billion yen (up 51% from the previous year) Saizeriya operating profit: 14.8 billion yen (up 205% from the previous year) Kura Sushi operating profit: 6.3 billion yen (last year was in the red) Toridoll (Marugame Seimen) operating profit: 9.5 billion yen (up 20% from the previous year).
People can be broadly divided into memory types and thinking types. If you raise the price, sales will decrease. “That’s the principle of equivalent exchange in alchemy.”
Continued from >>5 The total amount of sales remains the same, but the sales quantity decreases Nothing has changed in terms of value But the actual value has decreased Decreased supply Decreased economic power Decreased national power This is LDP politics They only look at the face value and not the actual value.
What has the insane Abenomics stock price supremacy, which says that as long as stock prices rise, it doesn’t matter what happens after that, brought to Japan in the end?
If you move your base overseas, your technology and everything else will be stolen and you’ll be tossed away when you’re no longer needed, so there are only a few Japanese companies that can completely flee overseas.
Supermarkets are the only allies of the common people. They are making sacrifices to help out and I take my hat off to them. If they start raising prices, the common people will really dry up.
>>26 They just lowered the prices a little because they kept raising them and losing customers. I wrote this in my previous reply. Anything that used to cost 5,000 yen now costs 10,000 yen. My wife often says, I’m so glad we’re done raising our kids now. It must be really tough if you have kids who are still growing and need a lot of food.
I was surprised to find out recently that the local co-op is running a “senior citizen transportation service.” They take elderly people who have trouble walking to places not too far away by bus, just like they would to a cram school.
Something that cost 100 yen now costs 150 yen. The consumption tax has also increased by 1.5 times. That’s an effective 50% tax increase. No wonder low-income earners die.
The purchase price at any supermarket hasn’t changed much, so they’re suffocating because the purchase price of meat has gone up…that’s a complete lie. Because if the purchase price is the same and the price goes up, the amount sold won’t change even if the selling price is raised all at once. The number of supermarkets is actually increasing, and drug stores are imitating supermarkets and starting to stock fresh produce. Convenience stores are stocking clothing, supermarkets are stocking medicines, etc., so the number of stores and sales floor space are increasing like crazy. The service industry has now increased from 30% to 80% of what it was half a century ago, so it’s no surprise that they’re suffocating from excessive competition. The service industry is a family business that cuts out the middleman.
Should our resource-poor country have an expanding trade surplus, money flowing back into Japan, rising real wages, a natural increase in population, and increased consumption?
How far will the Japanese people have to go before they show their fangs? Or will they just silently submit, even if it means losing their lives, like they did before the war?
>>46 But otaku are good at spending money. Young people especially know that their future is bleak, so they spend money generously on their otaku activities and their favorite idols. It’s surprising that they go to rock festivals every week, where tickets easily exceed 10,000 yen.
However, the impact of rising prices has not only affected retailers such as supermarkets; the past year has caused considerable confusion for everyone from producers to consumers.
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