Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Growth in the Japanese consumer sector remains weak despite event-driven catalysts such as the Osaka Expo and the Golden Week holiday, with retail markets not showing expected significant growth [2][13] - External demand has shifted due to yen appreciation and changing trade environments, leading to a preference for everyday goods over luxury items among overseas tourists [2][13] - Domestic consumer sentiment is cautious, with a decline in the willingness to travel domestically during the Golden Week, reflecting a conservative household consumption attitude [2][13] Macroeconomic Overview - The core CPI in Japan rose by 3.6% year-on-year in April, maintaining the same level as March, while the core CPI excluding fresh food increased by 3.5%, surpassing previous values and market expectations [9] - The consumer confidence index fell to 31.2 in April, marking the lowest level since February 2023, with a continuous decline for five months [7] - Real wages decreased by 2.1% year-on-year in March, indicating ongoing inflationary pressures on household purchasing power [7][9] Essential Consumption - Essential retail sales showed mixed results, with PPIH, 711, and Aeon reporting same-store sales growth of +6.3%, +1.8%, and +1.0% respectively, driven by higher average transaction values [3][14] - Sales of daily consumer goods like beer saw a significant decline in April, highlighting consumer sensitivity to price changes [3][20] - Drugstore chains like Matsukiyo Cocokara and Welcia reported same-store sales growth of +3.9% and +2.5% respectively, indicating a positive trend in essential goods [3][18] Discretionary Consumption - Duty-free sales continued to decline for the second consecutive month, with a drop of 26.7% in April due to policy changes and a high base from the previous year [4][34] - Restaurant same-store sales showed varied performance, with notable growth in chains like Saizeriya and Skylark, while McDonald's experienced a decline in customer traffic [4][26] - Apparel sales were mixed, with ABC-MART and other brands showing positive growth, while Uniqlo faced a decline due to unfavorable weather conditions affecting summer product demand [4][29] Market Performance - The Tokyo Stock Exchange index for retail, food and beverage, and service industries showed increases of +5.6%, +3.8%, and +1.4% respectively in April, while the textile and apparel sector declined by -7.4% [5] - Investment suggestions focus on companies with optimistic profit growth prospects, including Asics, Pan Pacific International Holdings, Fast Retailing, and Asahi Group [5]

Core Viewpoint - Yoshinoya Holdings aims to expand its ramen business significantly, targeting a fourfold increase in store numbers to 500 by FY2029, as a new pillar of growth due to limited expansion opportunities in its core beef bowl business [1][2]. Group 1: Business Strategy - The company plans to increase consolidated sales by 46% to 300 billion yen by FY2029, with operating profit projected to rise 2.1 times to 15 billion yen [1]. - Ramen sales are expected to grow fivefold to 40 billion yen, increasing its share of total sales from 4% to 13% [1][2]. - Yoshinoya Holdings has been actively pursuing acquisitions to expand its ramen store network, with a focus on both domestic and international markets [2]. Group 2: Market Position and Pricing - The price of the beef bowl has been raised from 696 yen to 740 yen due to rising raw material costs, while the normal portion remains at 498 yen to remain competitive [3]. - Ramen can be priced around 1,000 yen, which is higher than the beef bowl, providing greater revenue potential [3]. - The company sees ramen as having a broader menu range and easier market penetration in regions where rice is less popular [3]. Group 3: Production and Supply Chain - Yoshinoya Holdings plans to invest 40 billion yen in acquisitions over the next five years, primarily targeting the ramen business and its supply chain [2][5]. - The company aims to enhance production capacity by 50% and storage capacity by 100% by 2027 through acquisitions [5]. - The focus will also include developing halal products for the soup base to cater to diverse markets [5]. Group 4: Competitive Landscape - The ramen market is competitive, with other Japanese companies like Ippudo and Ajisen Ramen also expanding internationally [5][6]. - Yoshinoya Holdings intends to leverage its experience in food ingredient management and noodle production to differentiate itself in the ramen market [6].

Core Points - The company, Sukiya, announced the temporary closure of all its stores in Japan from March 31 to April 4, except for some locations in shopping centers, to address pest issues and improve food safety [1][2][10] - The decision follows two recent food safety incidents, including a complaint about finding harmful insects in a product and a previous incident involving a mouse in miso soup [2][5][9] - Sukiya operates nearly 2000 stores in Japan and has a presence in China, where it claims no food safety issues have occurred [9][10] Group 1: Food Safety Incidents - The latest incident involved a customer finding harmful insects in a product at the Akishima Station South store, leading to an apology and a refund from the store manager [2] - In January, a customer reported finding a mouse in miso soup at a store in Tottori Prefecture, but the company only responded in March, raising consumer concerns about its quality control [5][7] - The company acknowledged the delay in communication and stated that the mouse likely entered through a gap in the refrigerator's rubber mat [8] Group 2: Company Operations and Financials - Sukiya, founded in 1982, is part of Zensho Holdings Co., Ltd., which also owns other restaurant brands [9] - For the first three quarters of the fiscal year ending February 15, 2025, Zensho reported a 19.8% increase in net sales to 846.76 billion yen and a 56.3% increase in net profit to 34.10 billion yen [9] - Sukiya's net sales for the same period grew by 11.6% to 222.18 billion yen, with operating profit increasing by 42.7% to 20.21 billion yen [9]