Here is my list of some of the few companies that have found success during the recent economic downturn. Note their domestic orientation and low-priced offerings:
Disneyland – Multiple upward earnings revisions. Popular as alternative to international travel.
Nintendo – Record earnings. Gaming as substitute for an expensive social life. Their strategy to expand the pie of gamers through educational titles and the like has paid off enormously.
McDonald’s – Record earnings. 100 yen burgers for high school girls who want a place to chat and penny-pinching single salarymen who don’t cook for themselves
Nitori – cheap imported furniture, many convenient locations and no IKEA-style assembly requirements, no-pressure shopping experience (contrast with expensive, high-pressure Otsuka Kagu).
Tsutaya – is reporting surging new membership in their Internet rental service (similar to Netflix) is surging, while rentals-plus-online numbers have posted a sixth straight record year. People apparently spend their vacations watching the entire Sex and the City series instead of traveling to Hawaii.
Anecdotally, some of the supposedly high-end shops, such as the Caldee line of imported food stores, seem to be pretty popular. For one, the yen is strong, and for two, even relatively expensive items, are still cheap compared to the overseas trip you’ve decided to skip this year.
Writing in INSIGHT NOW!, small-business M&A consultant Shin Satake identifies four lines of business that do well in economic downturns:
1. Education services (people who have lost their jobs turn to retraining to make them more competitive)
2. Medical services (stress is a killer!)
3. Repair/maintenance (people decide to get stuff fixed rather than buy a replacement)
4. “Escapism” businesses – (the desire to escape everyday existence is a self-defense mechanism. Includes entertainment, etc.)