ARCS COMPANY,LIMITED
9948・Prime Market・Retail Trade
Business
Arcs Co., Ltd. is a holding company group operating a food supermarket business with 375 stores (as of end-February 2025), primarily in the Hokkaido and Tohoku regions. It has under its umbrella 10 supermarket operating companies, including Ralse Co., Ltd., Universe Co., Ltd., Belljoyce Co., Ltd., and Fukuhara Co., Ltd., and also operates home center, real estate leasing, and wholesale businesses, among others. The company transitioned to a pure holding company structure in 2002 and advocates "Yatsugatake Renpo Management" (a mountain-range management philosophy). It employs a unique management model that pursues group synergies while maintaining the autonomy of each regional company. Its main customers are general consumers in Hokkaido and Tohoku, and it has a customer base of 3.47 million RARA card members and 370,000 Arcs app members.
Business Model
The main revenue source is merchandise sales centered on food (food accounts for 87.1% of net sales), and profit is secured through cost efficiency achieved via the group's shared core systems, unified distribution channels, and category management. The Company, as a pure holding company, functions as the group's think tank, providing sales support, DX promotion, and unification of personnel systems for each operating company. Part of the revenue model also consists of expanding sales of CGC private brand products and New Japan Supermarket Alliance (Shin Nihon Super Market Domei) original products, as well as improving productivity through the introduction of net supermarkets (online grocery services) and electronic shelf labels.
Company Strengths
As of the end of February 2025, the company operated 375 stores mainly in Hokkaido and Tohoku, with FY2026 net sales expected to reach ¥626,957 million. The regional dominant strategy maintains price and product assortment competitiveness against rivals. In FY2025, net sales exceeded ¥600 billion for the first time, achieving purchasing negotiation power and logistics efficiency through economies of scale.
The company holds a customer data platform comprising 3.47 million RARA Card members and 370,000 ARCS app members (as of the end of February 2025). Following the full app renewal in October 2024, app membership has been growing at roughly twice the initially planned pace. The company is promoting customer retention measures utilizing point coupon distribution and push notifications.
As of the end of February 2025, the equity ratio stood at 65.1% (up 0.4 points year on year), with cash and cash equivalents of ¥80,035 million. The interest coverage ratio was an extremely high 144.0 times, indicating very strong financial soundness. The company maintains a policy of funding working capital and capital expenditures within the scope of operating cash flow.
ENVALITH's Perspective
Performance Trend
Revenue grew for five consecutive fiscal years, rising from ¥577,568 million in FY2022 to ¥626,957 million in FY2026. In the first quarter of FY2027 (ending February 2027), revenue also reached a record high of ¥158,479 million (up 2.7% year on year), marking a solid start toward the full-year forecast of ¥648,000 million (up 3.4% year on year). The operating margin improved slightly to 2.6% in the first quarter under review (up 0.1 percentage point from 2.5% in the same period of the prior year). As an external factor, higher per-item prices amid inflation (up 2.3% year on year) pushed up average spending per customer, while an increase in personnel expenses associated with base pay hikes (salaries and allowances of ¥15,209 million, up 4.7% year on year) constrained the extent of margin improvement. Comprehensive income totaled only ¥2,173 million, down 33.1% year on year, due to valuation losses on securities.
Growth Strategy
Aiming for sales of ¥1 trillion and ROE of 8% or more in FY2033 (ending Feb 2033) through format conversion, DX, three-company alliance collaboration, and M&A
A total of four stores were renovated in Q1, including three stores of Belle Joyce Co., Ltd. (former Big House Kokubu, Hanamaki, and Hongo stores) and Universe Co., Ltd.'s Higashi-Aomori store. The full-year plan for FY2027 (ending Feb 2027) calls for 3 new store openings and 18 store renovations. The improvement effects on customer spend per transaction and gross profit from format conversion have been proven, and horizontal deployment across the group continues to be promoted.
The next-generation core system is being developed with a target launch in October 2027. Requirements definition and detailed design were completed by April 2026, and development has now entered the Phase 3 program development stage. Integration testing with existing peripheral systems is planned to begin from October 2026 onward. Once operational, the system will serve as the foundation for DX initiatives such as category management and electronic shelf labels, aiming to improve operational efficiency and reduce costs.
Starting from successful cases at Ralse Co., Ltd., the initiative is being rolled out sequentially to Doto Arcs Co., Ltd. (achieved in the prior fiscal year) and Fukuhara Co., Ltd. (starting May 2026, for processed foods and confectionery). Expansion of target categories at existing participating companies and further rollout to other group companies continues. This has contributed to improvement in the SG&A ratio (22.2% in Q1 of this year versus 22.5% in the same period last year), and is positioned as a core measure for strengthening profitability.
The number of stores handling original products (kitchen goods, cleaning supplies, etc.) under the franchise agreement with Cainz Corporation has expanded to a total of 90 stores, an increase of 46 stores from the end of the previous fiscal year. Handling also began at Toko Store Co., Ltd. from June 2026. Home-related sales showed strong growth, reaching ¥5,758 million in Q1 (up 7.7% year on year), with the non-food category's contribution to earnings continuing to expand.
Original product development (such as salt-koji garlic ponzu) and information sharing continue through the three-company alliance with Valor Holdings Co., Ltd. and Retail Partners Co., Ltd. In preparation for price increases in petroleum- and naphtha-related materials driven by heightened tensions in the Middle East, the company is promoting a review of the ratio of food tray usage, standardization consolidation, reduction in usage of indirect materials such as nitrile gloves, and diversification of supply sources.
This is the growth strategy based on the "Arcs Integrated Report 2025" released in November 2025. FY2033 (ending Feb 2033), which marks the company's 30th anniversary, has been set as the target year. With three pillars—responding to industry consolidation (including M&A), promoting DX, and maximizing group synergies—the company aims to expand its scale by approximately 60% from the current sales of ¥626,957 million (FY2026).
Last updated: July 17, 2026