Arcs

Basic Information

Stock Code
9948
Industry
Retail
Category Detail
General Merchandise & Food Retailers
Prefecture
Hokkaido
Establishment Year
October 1961
Listing Year
July 1993
Official Website
https://www.arcs-g.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Halows, Daikokuten Bussan, United Super Markets Holdings, JM Holdings, Daiichi, Retail PA, Life Corporation, Max Valu Tokai, Axial, Yaoko, Baro Holdings, Belk

Overview

Arcs is a major retail holding company founded in Hokkaido in 1961, with supermarkets as its core, expanding into Tohoku and northern Kanto, achieving industry-leading distribution through regional closeness and M&A-driven growth.

Current Situation

Arcs achieved consolidated sales of approximately 591.5 billion yen, ordinary income of about 18.4 billion yen, and net income of about 11.7 billion yen in the fiscal year ending February 2024, holding strong competitiveness as a leading food supermarket centered in Hokkaido and extending to Tohoku and northern Kanto. The supermarket business is operated by group subsidiaries with a focus on regional closeness, acquiring Sapporo Tokyu Store, Universe, Joy's, Bell Joys, Otani, and others through M&A. It also advances business diversification through a drugstore venture with Sandra Drug. Digital services are being strengthened, including the RARA card points system and online supermarket collaboration with Amazon. While pursuing sales growth through local-focused management, new store openings, and capital alliances with other companies, it emphasizes sustainability and regional contributions, aiming for further customer base expansion and operational efficiency by 2030. Regional competitors include Co-op Sapporo, Aeon Hokkaido, and Life Corporation, focusing on service improvements and product development in a three-way competitive environment.

Trivia

Interesting Facts

  • Holding company overseeing Hokkaido's largest food supermarket group.
  • Growth through aggressive local-focused M&A strategy for supermarkets.
  • Deploys diverse store brands to meet regional consumer needs.
  • Pioneering RARA Card in the points activity market.
  • Expands food retail network from Hokkaido to Tohoku and northern Kanto.
  • Venturing into drugstores for diversification.
  • Pioneering new frontiers in food e-commerce via Amazon online supermarket.
  • Maintains stable funding base through collaboration with local financial institutions.
  • Strong regional ties with employee stock ownership and supplier shareholders.
  • Ongoing improvement in consumer satisfaction through diversified points redemption.
  • Efficiency in group-wide logistics network for cost reduction.
  • Group also operates drugstore and home center businesses.
  • Aggressively expanding stores not only in Hokkaido but to Tohoku and northern Kanto.
  • Addresses diverse customer needs with varying store names and formats by region.
  • Company name 'Arcs' derived from initials of corporate philosophy.

Hidden Connections

  • Joint venture with Sandra Drug for differentiation in drugstore market.
  • Collaboration with Amazon for new entry into online supermarket business, strengthening competitiveness.
  • Receives investment from regional financial institutions to stabilize operations and strengthen local ties.
  • Builds regional monopoly by bringing multiple local supermarkets under its umbrella.
  • Focuses on governance strengthening following listing on Tokyo Stock Exchange Prime Market.
  • Some subsidiaries join CGC Group for joint procurement and logistics optimization.
  • RARA Card points system considers partnerships with out-of-region companies.
  • Cainz home center franchise business also operated in Hokkaido.

Future Outlook

Growth Drivers

  • Further expansion of regional close needs in Hokkaido, Tohoku, and northern Kanto
  • Customer base expansion through strengthened online supermarket and EC business
  • Continuous expansion of regional store networks using M&A
  • Repeat customer increase effect from points card strategy
  • Capture of growth in drugstore and healthcare markets
  • Business efficiency and customer service improvement via digitalization
  • Service strengthening for aging society
  • Focus on sustainable product development and environmental considerations
  • Stable funding procurement through regional financial institution collaboration
  • Product differentiation strategy responding to diversifying consumer preferences

Strategic Goals

  • Maintain and expand top market share in food retail in Hokkaido and Tohoku
  • Improve online supermarket and EC sales to over 20% of total sales
  • Full rollout of sustainability-focused stores
  • Achieve over 90% points utilization rate across all group stores
  • Double sales in drugstore and health-related business
  • Establish social responsibility through strengthened regional community collaboration
  • Reduce environmental impact via logistics efficiency and CO2 emissions cuts
  • Improve talent acquisition and retention through employee satisfaction enhancement
  • Customer experience innovation using digital technology
  • Development and multi-store rollout of regionally specialized brands

Business Segments

Retail support services

Overview
Supports efficient store operations and product supply for group companies.
Competitiveness
Regional optimization using wide-area network
Customers
  • Group supermarket companies
  • Commercial facility operators
  • Logistics partners
Products
  • Store operation support
  • Product procurement and logistics management
  • Marketing analysis services

Corporate procurement and sales

Overview
Provides high-quality products with superior supply capacity to corporate customers.
Competitiveness
Stable supply system rooted in the region
Customers
  • Restaurants
  • Hotels
  • Nursing homes
  • Hospitals
Products
  • Food wholesaling
  • Bulk ingredients
  • Daily consumables

Logistics and delivery services

Overview
Provides efficient and safe logistics and delivery services.
Competitiveness
Delivery network rooted in the region
Customers
  • Group retail stores
  • Related companies
Products
  • Food logistics
  • Refrigerated delivery
  • Warehouse management

Franchise operation support

Overview
Handles franchise store operations support and brand management.
Competitiveness
Local market expertise in operations
Customers
  • Cainz
  • Palette Plaza
Products
  • Store operation agency
  • Store development support
  • Sales promotion support

Marketing and digital services

Overview
Provides ICT services to enhance customer engagement.
Competitiveness
Proprietary points and online sales system
Customers
  • All group retail companies
Products
  • Points program operation
  • Digital flyer distribution
  • Online supermarket operation

Competitive Advantage

Strengths

  • Strong regional community-based business foundation in Hokkaido and Tohoku
  • Diverse store brands and wide range of business formats
  • Business expansion power from extensive M&A experience
  • Customer loyalty through digital points system
  • Strengthened drugstore business via joint venture with Sandra Drug
  • Strong relationships with regional financial institutions
  • Comprehensive fresh food procurement and sales network
  • Stable financial base and consistent profitability
  • Risk diversification through diversification strategy
  • Product rollout tailored to local customer needs
  • Large workforce of approx. 5,700 employees
  • Group management capabilities as an overarching holding company
  • Developed logistics and delivery network
  • Customer data analysis using points cards
  • Close collaboration with local communities

Competitive Advantages

  • Market share as Hokkaido's largest food supermarket chain
  • Customer needs response via subsidiary regional specialized store operations
  • Aggressive market expansion strategy using M&A
  • Cross-selling effects from diverse sales channels
  • Integration with Nisshinho credit cards and Amazon online supermarket
  • Healthcare field strengthening via drugstore joint venture
  • Unique procurement strategy emphasizing local products
  • High customer retention effect of RARA points
  • Differentiation from competitors through regional brand building
  • Improved cost competitiveness via supply chain efficiency
  • High employee retention and employee stock ownership utilization
  • Brand value enhancement through sustainability initiatives
  • Convenience improvement via fusion of online and physical stores
  • Strategic management system across the group
  • Funding strength through alliances with regional financial institutions

Threats

  • Profit pressure risk from rising prices
  • Intensifying price competition from rivals
  • Impact on local supermarkets in depopulating areas
  • Influence of regulations and legal changes in food industry
  • Changes in consumer sentiment due to economic fluctuations
  • Logistics disruption risk from natural disasters
  • Market contraction due to population decline
  • Declining store traffic from diversifying consumer purchasing behavior
  • Rising store operation costs from labor shortages
  • Competitiveness decline from delayed digitalization
  • Market pressure from new entrants and foreign capital
  • International supply chain disruptions

Innovations

2023: Launch of collaboration with Amazon online supermarket

Overview
Online sales service for fresh foods launched in parts of Hokkaido in December 2023.
Impact
Contributes to customer expansion and convenience improvement in online shopping.

2022: Introduction of new design Arcs RARA Card

Overview
New design points card introduced from April 2022 to improve customer satisfaction.
Impact
Increased points usage rate and strengthened customer retention.

2020: Integration and strengthening of drugstore business

Overview
Established Sandra Drug Ace and reorganized group drugstore business.
Impact
Sales expansion and brand power improvement in healthcare field.

2021: Full subsidiary acquisition of Otani in northern Kanto

Overview
Strengthened entry into northern Kanto centered on Tochigi Prefecture, successfully expanding customer base.
Impact
Sales growth through regionally close store expansion.

2024: Refinement and digitalization of points awarding system

Overview
Diversified Arcs points awarding methods and strengthened smartphone app integration.
Impact
Improved customer loyalty and payment convenience.

Sustainability

  • Promotion of local production for local consumption through active procurement of regional products
  • Promotion of development and introduction of energy-saving stores
  • Advancement of plastic packaging reduction activities
  • Improvement of sales management system to reduce waste losses
  • Promotion of environmental education and participation in local communities