■Business Overview

The business segments of G-7 Holdings ＜7508＞ are disclosed in 4 businesses: car-related business, business supermarket business, meat butcher business, and other businesses. Looking at the composition ratio by business for the fiscal year ending 2024/3, the business supermarket business is the main business accounting for 55.1% of sales and 66.1% of ordinary profit. Also, when specialty food/private brand businesses, mini supermarket businesses, and agri businesses included in the business supermarket business, meat butcher business, and other businesses are added, the food retail business accounts for over 70% of sales.

1. Car related business

Car-related businesses include G-7 Auto Service Co., Ltd., which is an “AUTOBACS” franchisee and develops car supplies sales and maintenance, etc., and G-7 RETAIL MALAYSIA SDN.BHD, which operates the motorcycle accessories sales/maintenance store “Bike World” in Malaysia, and G7 RETAIL MALAYSIA SDN.BHD, which operates the “Motorbike World” franchise. It consists of 4 companies, G-7 Crown Trading Co., Ltd., which handles automobile export sales business.

G-7 Auto Service, which accounts for about 80% of the sales structure ratio, has developed a total of 79 AUTOBACS related stores as of the end of 2024/3:76 domestic stores (69 AUTOBACS stores, 7 AUTOBACS Express stores) and 3 stores in Malaysia. The domestic store area is Hyogo Prefecture, Kyoto Prefecture, Fukui Prefecture, Okayama Prefecture, Hiroshima Prefecture, Chiba Prefecture, and Ibaraki Prefecture, and among them, 38 stores, which is about 50% of the total, have been opened in Hyogo Prefecture. It is the largest franchisee in the AUTOBACS Group (590 domestic stores, 109 overseas stores), and is characterized by maintaining high profitability within the group due to store management that emphasizes productivity per employee, gross profit margin, inventory turnover ratio, etc. Also, in addition to 9 “BP Center” (metal and paint) stores and 1 “Suzuki Cars Osaka” store that buys and sells new and used cars, they have opened 5 outdoor goods specialty stores “FIELD SEVEN” on the premises of stores such as “AUTOBACS,” 6 coin laundry shops “Mamma Chao,” 2 taiyaki specialty stores “Yamaya Honpo,” and 2 Western confectionary specialty stores “Chateraise.”

“Bike World,” which accounts for less than 10% of the sales structure ratio, has developed a total of 20 stores with 15 domestic stores and 5 stores in Malaysia at the end of 2024/3, and is also opening stores in collaboration with Motorbike King & Company ＜3377＞, a capital and business partner in Japan. Also, G-7.Crown Trading, which accounts for over 10% of the sales structure ratio, mainly exports and sells used cars, and the sales structure ratio by destination for the 2024/3 fiscal year is in the order of Malaysia 50.2%, the Middle East 15.7%, and domestic 4.5%.

2. Business supermarket business

The business supermarket business will be the business of G-7 Supermart Co., Ltd., which develops “business supermarkets” as a franchisee. The store opening areas are Kanto, Chubu, Kansai, Kyushu, and Hokkaido, and the number of stores at the end of 2024/3 is 191 stores, making it the largest business super group (1,058 stores). As for the number of stores by region, Kanto has the highest number with 73 stores (Tokyo 20, Kanagawa 17, Saitama 21, Chiba 15), followed by Chubu 43 stores (Aichi 27, Mie 10, Gifu 6), Kansai 34 stores (Hyogo 23, Osaka 11), Kyushu 26 stores (Fukuoka 17, Kumamoto 7, Nagasaki 2), and Hokkaido 15 stores. Stores have been expanded with strengths in store profitability that emphasizes productivity per employee and inventory turnover ratio, and in the past few years they have been actively opening stores not only in Kanto but also in Kyushu and Hokkaido.

3. Meat business

The butcher business will be the business of G-7 Meat Terabayashi Co., Ltd., which operates the meat retail store “Meat Terabayashi” nationwide. Since becoming a subsidiary in 2015, it has promoted a strategy of opening stores simultaneously with “business supermarkets,” and stores have been expanded. In addition, it has an Andes Food Division that develops wholesale sales for restaurants and school lunch/delicatessen businesses in the Tokyo metropolitan area (after making Andes Foods Co., Ltd. a subsidiary in 2020, it was absorbed and merged).

The total number of stores at the end of 2024/3 will be 187, with 174 “Niku Terabayashi” stores and 13 Andean Foods stores. The Kanto region has the highest number of stores with 73 stores, followed by Kansai 36 stores, Chubu 31 stores, Kyushu 26 stores, Hokkaido 14 stores, etc. Regarding “meat terabayashi,” about 90% of the total are in-store stores at “business supermarkets” and “Megumi no Sato,” and the scale of the business is expanding while increasing group synergy.

4. Other businesses

Other businesses include businesses such as G7 Agri Japan Co., Ltd., which operates the agricultural products direct sales place “Megumi no Sato,” G-7 Ricos Stores Co., Ltd., which operates the mini supermarket “Ricos,” G7 Japan Food Service Co., Ltd., which develops specialty food/private brand businesses, franchise development of the gymnastics and health class “Curves” for women, and G7 Retail Japan Co., Ltd., which operates the bicycle dealer “Treasure Cycle.”

As for “Megumi no Sato,” all stores in the Chubu and Kanto regions were closed in the 2023/3 fiscal year, so currently only Kansai stores have opened, and at the end of 2024/3, there are 20 stores (Hyogo 17, Osaka 1, Nara 2), and 9 of them have opened stores within “business supermarkets.” A contract sales system for producers has been adopted, and approximately 20% of the sales value is recorded as fee revenue. Therefore, there is no risk of product disposal loss, and it is a business model where stable profits can be obtained.

The mini supermarket “Ricos” is operating in Tokyo and Kanagawa prefectures, and 58 stores (45 in Tokyo and 13 in Kanagawa) were opened at the end of 2024/3. The sales scale is just under 200 million yen per store per year, which is less than 40% of “business supermarkets.” When shares were acquired from UNY Co., Ltd. in 2020/4 and made it a subsidiary, there were 73 stores, but sales continued to be sluggish due to a round of nesting demand, so the consolidation of unprofitable stores has been progressing step by step since 2022. Since the business management system was revamped from 2023/4, profits are gradually improving.

In the specialty food/private brand business, in addition to discovering local specialties and specialty products and selling them at department stores, specialty stores, EC shops, etc., they also develop, manufacture, and sell various PB products, mainly frozen foods, processed foods, etc. It has over 6,500 suppliers and sells to over 2,200 retail stores nationwide. Also, Mitsuwa Sake Sales Co., Ltd., which sells alcoholic beverages online, became a subsidiary in 2023/7. Mitsuwa Sake Sales is on Rakuten Ichiba and Yahoo! They have opened stores in shopping, Amazon, etc., and sell local sake from all over the country. It has strengths in know-how and product planning capabilities for managing online shopping. Monthly sales are small at 10 to 20 million yen, but they are aiming for synergy effects by sharing the know-how that Mitsuwa Sake Sales has with the group.

In addition, in addition to operating 25 stores (Kanagawa Prefecture) of the health exercise class “Curves” for women as a franchisee, they have also opened 1 bicycle dealership “Treasure Cycle” (Hyogo Prefecture).

(Author: FISCO Visiting Analyst Joe Sato)