Market Overview

In 2024, the size of the domestic retail market increased slightly from the previous year. Robust demand from inbound tourists, coupled with price hikes of imported products due to a weaker yen, boosted business for department stores, drugstores, and specialty bag stores. However, domestic consumers became more reluctant to make purchases. Amid rising commodity prices, consumers have polarized between those who choose products based on price and those who choose products based on value. Stores selling low-priced products, including thrift stores and fixed-price shops, and discount stores, have become more prominent. The market size increase is not optimistic because it implies growth caused by rising commodity prices. Company management faces labor shortages, which cause labor cost hikes, along with rising energy and logistics costs. This obscures secure profits. Additionally, retailers, such as convenience stores and drugstores, are reducing the availability of opening new stores. Therefore, it is imperative for retailers to shift their growth method of opening new stores. These environments require existing stores to improve productivity. Companies must address AI, digital transformation (DX), and green transformation (GX) to directly bring about profits.

Noteworthy Topics

Many Social Issues Occurred in 2025, Impacting the Retail Distribution Market

Social situations changed significantly both globally and domestically in 2025. On January 20, Donald Trump, an advocate of "America First," was inaugurated as the 47th president of the United States. Geopolitically speaking, the war between Ukraine and Russia continued despite various peace proposals, as did the conflict between Israel and Hamas, despite a ceasefire agreement. In the realm of science and technology, generative AI's global boom is considerably changing workstyles.

In Japan, the Takaichi administration began addressing diverse issues, such as overtourism and rising commodity prices.

Future Outlook

As in the previous year, the domestic retail and distribution market is expected to grow slightly in 2025. As the realization that reducing prices is insufficient has spread throughout the industry, it has become crucial for companies to shift away from price competition. Companies are doing so by enhancing value generation and customer touchpoints using customer data, developing retail media (retailers’ advertising media using customer data and sales channels), and aligning with local communities.  

Research Outline