HEIWADO CO.,LTD.
8276・Prime Market・Retail Trade
Business
Heiwado Co., Ltd. was founded in 1953 in Hikone City, Shiga Prefecture, and now operates as a group including 20 subsidiaries, centered on Al Plaza (General Merchandise Store) and Friend Mart (Food Supermarket), primarily in the Shiga, Keihanshin, Hokuriku, and Tokai regions as a regional chain. The Retail Business accounts for approximately 95% of net sales, handling a wide range of products including food, apparel, and daily sundries. The group also includes Bestone Co., Ltd., which handles prepared foods and fresh food processing, National Maintenance Co., Ltd., which handles building management, and subsidiaries operating dining businesses (such as Kentucky Fried Chicken), giving the group a vertically integrated business structure centered on retail. The group also has a retail presence in Hunan Province, China.
Business Model
In the core Retail Business, the company operates two formats—Al Plaza (General Merchandise Store) and Friend Mart (Supermarket)—tailoring store development to trade area characteristics, and earns revenue from the sale of groceries, apparel, and daily necessities. Bestone Co., Ltd. handles in-house production of prepared foods, rice, and fresh food processing to improve gross margin and achieve differentiation, while National Maintenance Co., Ltd. handles store cleaning and facility maintenance to enhance cost efficiency. The company is also strengthening customer retention through segmentation marketing leveraging the HOP App (1.27 million members).
Company Strengths
Since its founding in 1953, the company has progressively expanded its store network from Shiga Prefecture into the Keihanshin, Hokuriku, and Tokai regions, building a network of over 100 stores as of the fiscal year ended February 2023. Through a community-based trading area strategy, it tailors merchandise assortments and sales floor layouts to local area characteristics, differentiating itself from competitors.
HOP App membership, the company's digital membership base, has reached 1.27 million. By leveraging segmentation marketing, the company has increased sales among customers in their 30s and 40s through KVI price appeals targeted at child-rearing households and enhanced large-pack offerings, contributing to a 102.7% year-on-year increase in existing-store sales.
By utilizing the process center and deli center of Bestone Co., Ltd., including the new deli center that began operations in May 2023, the company has improved productivity in its fresh food division. It achieved existing-store fresh food sales of 103.3% year on year while keeping total labor hours to 99.4% of the previous year's level, achieving both profitability and efficiency.
ENVALITH's Perspective
Performance Trend
Over the past five fiscal years, revenue bottomed out in FY2023 (¥415,675 million) and has continued a recovery trend, expanding to ¥456,010 million in FY2026. The full-year forecast for FY2027 (ending February 2027) is ¥478,000 million (up 4.8% year on year), maintaining the revenue growth trend. Meanwhile, operating profit peaked at ¥15,362 million in FY2022 and has since remained at low levels, standing at ¥13,313 million in FY2026. In the first quarter of FY2027 (ending February 2027), operating profit was ¥2,571 million (down 12.7% year on year) and profit attributable to owners of the parent was ¥1,186 million (down 45.3% year on year), indicating an accelerating deterioration in profit. External factors such as substantial increases in labor costs, surging logistics costs, and rising energy costs have progressed simultaneously, compounding a decline in gross margin with an increase in selling, general and administrative expenses. The absence of the gain on sale of shares of an affiliated company (¥239 million) recorded in the same period of the previous year also contributed to the significant decline in net profit.
Growth Strategy
Store openings and consolidation centered on the SM format, combined with digital and in-house capability building to strengthen profitability
Promoting expanded store openings in multiple formats (supermarkets, small-format stores, online supermarket) in priority areas. Driven by growth from 5 stores opened in the prior year and growth at existing stores, Heiwado's standalone operating revenue for Q1 of FY2027 (ending February 2027) increased 5.2% year on year. Continuing to expand the HOP economic zone geographically through new channel expansion.
Promoting price strengthening on everyday-use products, differentiation through fresh food and private brand products, and enhanced communication utilizing the HOP App. Average customer spend is on an upward trend, but the impact on customer traffic from consumers' thrift-oriented spending remains a concern.
Promoting a balance between wage increases and personnel cost control through business process review, and cost optimization through logistics reform and specification review. However, SG&A expenses for Q1 of FY2027 (ending February 2027) continued to increase, up 4.3% year on year (¥37,833 million), indicating that the realization of cost reduction effects remains a work in progress.
The absorption mergers of Yanagen Co., Ltd. (May 2025) and Eile Co., Ltd. (August 2025) into Heiwado have been completed, contributing to the expansion of Heiwado's standalone operating revenue. The scale-expansion effect of the mergers has been confirmed in terms of sales, but a decline in gross margin has occurred, and reflecting the integration synergies in profit remains a future challenge.
Last updated: July 17, 2026