Retail Japan Convenience Stores – UBS Evidence Lab inside: Has competitiveness been lost?

An end-March 2020 survey on attitudes to Japan convenience stores shows accelerating shift from dining out to convenience stores. We think the shift toward home cooking, delivery, or bringing in prepared foods may persist after COVID-19.

29 May 2020

Where is convenience store consumption going, where is it coming from? (net change)

This bar chart illustrates where to or where from convenience store consumption has shifted; for example, from or to food delivery, supermarkets, drugstores, or restaurants.

Urban COVID-19 effects large, but boosting market share may be possible

In our last report on the convenience store industry, we noted that the sector may be defensive’ a beneficiary of stay-at-home demand during COVID-19, but, with more workers telecommuting and people being encouraged to avoid outings, there has been a greater negative impact in office districts and areas around train stations than we expected; same-store sales of the three major convenience store chains fell sharply in March-April. Convenience store stocks have underperformed the retail index. However, based on UBS Evidence Lab survey responses and other data, our analysis suggests the companies may be able to maintain or increase market shares as negative effects in urban areas recede if they can meet customer needs through stores in residential areas.

Focus on shift from eating out to home cooking, delivery, and prepared foods

UBS Evidence Lab's recent survey of COVID-19 effects on consumer habits (Link) confirms that, while consumer likelihood of visiting convenience stores has declined, it remains solid next to drugstores and supermarkets. Analysing data from an end-March 2020 survey on consumer attitudes to convenience stores shows that, compared with the preceding survey (September 2019), the shift from dining out to convenience stores is accelerating. We think the shift from dining out toward home cooking, delivery, or bringing in prepared foods may to some extent persist after COVID-19. Satisfying this demand by improving product quality and broadening product ranges, convenience stores may find a way to maintain or increase market share within the retail industry.

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