KOBE BUSSAN CO.,LTD.

Business Details

As the FC headquarters for "Gyomu Super," the company handles product planning, development, and procurement, and also engages in food production through domestic and overseas consolidated subsidiaries. Under an EDLP (Every Day Low Price) pricing policy, the business mainly offers original Private Brand (PB) Products manufactured at its own group factories and directly imported overseas products. It operates FC contracts under two forms—directly-controlled areas and regional areas—and had a total of 1,137 stores as of the end of the first half of FY2026 (ending March 2026)/(the six months ended April 2026). This is the group's core segment, accounting for approximately 96% of consolidated net sales. The company conducts voluntary pesticide residue inspections on all imported agricultural produce containers, emphasizing food safety and peace of mind.

Recent Overview

Despite higher procurement costs, performance remained solid on the back of pricing strategy and PB product media exposure, with H1 sales up 4.9% year on year.

In the first half of FY2026 (ending March 2026) (November 2025 to April 2026), Gyomu Super Business sales were ¥275,090 million (up 4.9% year on year), and segment profit was ¥23,223 million (up 10.6% year on year). Although procurement costs rose due to unstable currency fluctuations and price increases, the success of the pricing strategy and extensive media exposure of PB products supported customer traffic, resulting in solid performance. During the first half, the company achieved a net increase of 15 stores (10 in directly-controlled areas, 10 in regional areas), expanding the total store count to 1,137. FC owners' appetite for opening new stores remains strong, and continued new store openings are expected going forward.

Key Products

Growth Drivers

• Continued new store openings driven by FC owners' strong appetite for expansion (net increase of 15 stores in H1 FY2026, ending March 2026)
• Increased customer traffic and brand recognition through greater media exposure of PB products
• Success of the EDLP pricing strategy in capturing consumers' cost-saving mindset amid inflation
• Higher in-house manufacturing ratio through increased production capacity at food manufacturing plants (continued capital investment)
• Strengthened food safety and peace-of-mind messaging through the introduction of voluntary pesticide residue inspections on all imported agricultural produce containers
• Sustained FC owners' appetite for new store openings through promotion of relocating aging stores, contributing to their business expansion

Risks

• Increased import procurement costs due to currency fluctuations (yen depreciation)
• Rising raw material and energy costs due to continued price inflation
• Intensifying competition across industries and business formats in the food supermarket industry (e-commerce operators, drugstores, etc.)
• Risk of reduced appetite for new store openings due to deterioration in FC owners' business performance
• Risk of food safety and quality issues (pesticide residues, hygiene management, etc.)
• Risk of supply instability in overseas procurement and directly imported products due to prolonged geopolitical risk