Home Improvement Retail Sector Undergoes Restructuring, with “¥1 Trillion” the Keyword — Consolidation and Alliances, Joint Purchasing and Private-Label Product Initiatives — (TSR Flash)

In the mature home improvement retail sector, an oversupply of stores has persisted, with sales efficiency per store declining despite the increase in store numbers. Consolidation and alliances are accelerating as companies seek to strengthen their competitiveness. The industry association has pointed out that no company has yet reached ¥1 trillion in revenue.

An analysis of data from 48 companies for FY2025 found that revenue growth was within ±5% for more than 80% of them, while net income declined significantly compared with the previous 3 years. Expanding private-label product offerings and reducing costs through joint procurement were identified as key to maintaining profitability.

Among moves toward business integration, Arclands and Joyful Honda are progressing with consideration of a merger. Combined revenue after the integration would be approximately ¥410.4 billion, potentially moving the companies to fourth place in the industry, ahead of leading company Komeri. The benefits of joint procurement and plans for reciprocal supply of private-label products are being highlighted.

As a capital and business alliance, Kohnan Shoji announced a partnership with Valor Holdings. The companies are expected to reach combined revenue of approximately ¥552.3 billion, exceeding the scale of industry leader Cainz. They plan to roll out reciprocal supply of private-label products at their stores in the future.

DCM announced that it aims to reach ¥900 billion in revenue by 2030. Despite stagnation in the market, companies are becoming more active in seeking growth opportunities through the use of private-label products and mergers and integrations. Items other than food have slow inventory turnover, making the management of a wide range of products an ongoing challenge.