Society

Japan's convenience chains see ray of hope despite COVID

Oct 09 (Nikkei) - Japanese retailers are seeing a rebound in business as the government tries to balance keeping coronavirus under control with stoking the economy.

"We believe that the impact of the new coronavirus has subsided... We want to move ahead with our efforts at an even faster speed," Takashi Sawada, president of convenience store operator Family Mart told reporters in a teleconference on Wednesday.

In its last press conference as a listed company, Family Mart reported a net loss of 10.7 billion yen ($101 million) for the March to August period. Family Mart will soon be taken private by conglomerate Itochu which recently made a bid to buy the convenience store chain.

Operating profit for the June-August quarter was 23.2 billion yen, up substantially from the 9 billion yen reported for the March-May quarter. Family Mart sees this as "a significant improvement in earning power," as daily same-store sales recover.

Family Mart is far from alone in the retail sector experiencing a rebound from the severe business environment in the first quarter. Rival convenience store operators Seven & i Holdings and Lawson also saw an improvement in operating profit for the second quarter from the first, though their earnings remain lackluster compared with previous years.

Family Mart has seen a significant improvement in sales in the June-to-August quarter compared with the preceding. (Photo by Manami Yamada)

Seven & i Holding on Thursday revised up its earnings forecast for fiscal 2020 to 138.5 billion yen from 120 billion yen it predicted in July. Its operating profit in the second quarter rose to 108.3 billion yen from 71.3 billion yen in the first quarter.

Lawson's consolidated operating profit for the June-August quarter was 14 billion yen, rising from the 2.6 billion yen reported in the first quarter.

During the June-August quarter, Japan saw a second wave of coronavirus infections, with many more cases than during the first. However, the government did not declare a state of emergency, like it did earlier, as it did not want to damage the economy further.

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