TENMAYA STORE CO.,LTD.

Business Details

This segment primarily engages in the retail sale of food, apparel, and daily necessities, along with associated store leasing operations. The company operates stores mainly in Okayama Prefecture, as well as in Hiroshima and Tottori Prefectures, offering a community-focused product lineup centered on locally-produced, locally-consumed goods and enhanced fresh food offerings. It combines an EDLP (Every Day Low Price) strategy under the "Price Cut Declaration" with high-value-added products such as Seven Premium to meet the needs of a broad customer base. The segment also includes mobile sales operations conducted by consolidated subsidiary Happy Variety Co., Ltd.

Recent Overview

New mall-format store "Tenmaya Happy's Saidaiji Store" opened ahead of schedule in March; despite revenue growth, operating profit fell 9.8% year-on-year.

In Q1 FY2027 (ending March 2027) (March-May 2026), retail business operating revenue was ¥12,658 million (up 2.1% year-on-year), securing revenue growth, while operating profit declined to ¥466 million (down 9.8% year-on-year). In March, the company opened "Tenmaya Happy's Saidaiji Store" ahead of schedule as the core tenant of its first mall-format facility, "Tenmaya Happy's Saidaiji Mall" (Higashi Ward, Okayama City). The company promoted the expansion of reasonably-priced products through the strengthened EDLP strategy under the new "Price Cut Declaration" promotion and the introduction of the private brand "Kurashi Ryoko." Increased interest expenses (from ¥8 million in the same quarter of the prior year to ¥19 million in the current quarter) weighed on profitability.

Key Products

Growth Drivers

• Acquisition of new trade areas and improved customer traffic from the grand opening of "Tenmaya Happy's Saidaiji Mall"
• Strengthening of EDLP (low-price strategy) through the new "Price Cut Declaration" promotion, catering to cost-conscious consumers
• Expansion of reasonably-priced products through the introduction of the private brand "Kurashi Ryoko" (All Japan Supermarket Association)
• Increased average customer spending through the rollout of high-value-added products such as Seven Premium
• Community-focused customer acquisition through enhanced local-food offerings, including local-consumption corners and morning markets
• Enhanced community engagement and brand value through collaborative product development and learning initiatives with local universities
• Improved store accessibility and customer flow through the installation of Okayama City's "Momo-Chari" bike-share ports
• Productivity improvements and cost reductions through the enhancement of digital technologies such as self-checkout and electronic shelf labels

Risks

• Continued stagnation in personal consumption and growing frugality due to persistent price increases
• Rising procurement costs due to escalating energy prices amid Middle East tensions and continued yen depreciation
• Pressure on selling, general and administrative expenses from rising raw material prices
• Financial burden from increased capital expenditure and short-term borrowings associated with new store openings (e.g., Saidaiji Mall)
• Downward pressure on ordinary profit from increased interest expenses (approximately 2.2x year-on-year)
• Deepening reliance on food retail within the revenue structure amid a declining trend in apparel and daily necessities sales
• Risk of increased SG&A expenses due to rising labor costs (salaries and bonuses)
• Risk of impairment losses on fixed assets and potential store closure losses
• Risk of rising procurement costs due to instability in US trade policy and foreign exchange markets