Even with rising prices, why can Gyomu Super keep things cheap?

When I go to Gyomu Super, I get a slightly strange feeling.

Frozen vegetables, large-capacity seasonings, overseas snacks, products in unfamiliar packaging. There are many things that feel cheaper than at regular supermarkets, and I often find myself wondering, "How can they sell it at this price?"

When I go to Gyomu Super, I even find myself looking at shelves I hadn't planned to visit. I sometimes stop in front of the frozen foods and check multiple times, thinking, "Is this really the price for this amount?" Even though I go there to save money, I find myself curious about the store's mechanism itself. Gyomu Super has that kind of mysterious magnetic pull.

Now that food prices are rising, that question is stronger than before. Raw materials, logistics costs, and labor costs should all be going up. Even so, Gyomu Super has products on its shelves at prices that help household budgets.

At first, I thought it was just a company good at procurement. Buy in bulk, sell cheap. Of course, that must be part of it.

However, as I read through Kobe Bussan's medium-term management plan and financial results briefing materials, the picture that emerged was a little different.

Kobe Bussan is not just a retail company. It is a company close to a food manufacturing and wholesale platform that has a huge outlet called Gyomu Super, channels its private brand (PB) products there, and combines domestic factories with overseas procurement.

Gyomu Super is a huge outlet for channeling products

I think more people are familiar with "Gyomu Super" than the company name Kobe Bussan.

Yellow and green signs. Sales floors lined with frozen foods. Ingredients in large bags. Imported products not often seen in regular supermarkets. Gyomu Super offers a somewhat unique shopping experience.

As of the end of April 2026, there are 1,137 Gyomu Super stores. The year-end target for the fiscal year ending October 2026 is 1,154 stores, and in the first half, there were 20 new store openings, 5 closures, and a net increase of 15 stores. The key measure of "1,130 stores or more" set out in the medium-term management plan has already been exceeded.

What this number means is that Gyomu Super is not just a cheap store in some regions, but a large outlet that channels products nationwide.

As the number of stores increases, the number of places to deliver products made or procured by Kobe Bussan increases. Except for four directly managed stores, Gyomu Super is operated by franchises. Rather than managing many stores directly, Kobe Bussan is in a position to supply products to franchisees and expand the store's mechanism.

This is where it differs slightly from looking at regular supermarkets.

Gyomu Super is a "store," but for Kobe Bussan, it is also an "outlet to channel products." Therefore, an increase in the number of stores does not just mean an increase in signs. It also means the expansion of a distribution network to circulate its own products and imported goods.

The next focus is shifting from increasing stores to strengthening the contents of the stores

In the medium-term management plan, in addition to having 1,130 or more Gyomu Super stores, the company also aims to grow shipments to existing stores by 2% or more each term.

The term "shipment amount" is not very familiar to shoppers. Simply put, it is a figure that looks at how much product is flowing from Kobe Bussan to Gyomu Super stores.

Looking at the number of stores tells you if new stores are increasing. Looking at shipment amounts to existing stores tells you how much the existing stores are moving.

The shipment performance for existing stores in the directly managed area for the first half of the fiscal year ending October 2026 was 102.8%. This means it has increased by 2.8% from the previous year. It has exceeded the target of "2% or more growth each term" in the medium-term plan for this first half.

This is a very important change.

Gyomu Super has already exceeded its medium-term plan target for the number of stores. Of course, in the long term, it aims for 1,500 stores or more, so there is still room for new openings. However, the immediate focus is no longer just on "increasing stores."

How many attractive products can be channeled to the 1,137 stores that exist now?
How much can those products be sold at a price and in a quantity typical of Gyomu Super?
This will be the next observation point.

From our perspective as users, this is not just about "whether a Gyomu Super will be built nearby," but also about "whether the shelves of the existing Gyomu Super will become more interesting." Whether there will be more unfamiliar frozen foods or PB products that you can't help but want to try. The company's next change will appear there.

PB products are at the center of the low prices

Gyomu Super has many products that you don't often see in other supermarkets. One of the reasons for the unique atmosphere of the sales floor, with its frozen foods, seasonings, processed foods, and imports, is the large number of PB products.

PB stands for Private Brand. It refers to products that a company plans itself and sells under its own name.

In Kobe Bussan's medium-term management plan, increasing the PB ratio to 37% is a key measure. The long-term goal is a PB ratio of 40% or more. The PB ratio for the second quarter of the fiscal year ending October 2026 was 34.62%.

The figure of 34.62% has not yet reached the medium-term target of 37%. There is also a distance to the long-term goal of 40% or more.

This distance is important when looking at Kobe Bussan now.

The store count target is ahead. Shipments to existing stores are also over 2% in the first half. However, the PB ratio has not yet reached the target.

Therefore, it appears that Kobe Bussan's next challenge is not just to increase the number of sales floors, but to increase the proportion of PB products flowing into those sales floors.

When PB increases, it becomes easier to design prices yourself. If you only buy and sell other companies' products, you are strongly influenced by purchase prices. If it is a product planned in-house, you can create the product while considering capacity, raw materials, manufacturing methods, packaging, and logistics.

It also means an increase in products that are hard to buy anywhere but Gyomu Super.

If it's just products that are in every supermarket, it becomes a price comparison game. However, if there are more products that make you think, "Let's go to Gyomu Super to buy that," a reason to go to the store is born.

PB products are what support both low prices and the "Gyomu Super-ness" at the same time.

Factories and overseas procurement are behind the low prices

To increase PB products, planning alone is not enough. You need the power to produce stably and the power to procure stably.

In its medium-term management plan, Kobe Bussan states that it will invest more than 10 billion yen annually in capital investment to strengthen domestic PB. In the financial results briefing materials, it is explained that regarding overseas partner manufacturers, products are manufactured with the cooperation of about 600 companies in about 50 countries and regions.

This is where Kobe Bussan's unique strength lies.

The low prices at Gyomu Super are not created just on the sales floor. Make it domestically. Procure from overseas. Plan the product. Channel it to the store. This series of flows is connected.

In a regular supermarket, eyes inevitably turn to "how to sell in the store." When looking at Kobe Bussan, it is better to look at the product supply mechanism behind the sales floor.

Gyomu Super is a place to sell products.
Kobe Bussan is a company that continues to channel products to those sales floors.

If you grasp this difference, the question of "why is it cheap?" changes slightly.

It's not just because they are buying cheap products. It's because they have a mechanism to create, collect, and channel products that can be sold cheaply.

Even so, protecting low prices is not easy

Looking at it this far, the low prices at Gyomu Super seem to be supported by a very strong mechanism.

There are stores. There are PB products. There is domestic manufacturing and overseas procurement. Products are also flowing to existing stores. The ingredients to create low prices are all there.

However, there are also headwinds for Kobe Bussan right now.

In the financial results briefing materials for the second quarter of the fiscal year ending October 2026, the gross profit margin is 12.4%, an improvement from 11.6% in the same period of the previous year. It is explained that they have worked on price pass-through and optimization of procurement sources in response to rising procurement costs.

The improvement in the gross profit margin is a sign that the company's procurement and price design are working. However, in the same document, the selling, general and administrative (SG&A) expense ratio has also risen from 4.6% to 5.1%. It is also explained that freight and warehouse rent have increased due to the increase in volume accompanying the increase in Gyomu Super sales.

This is where the difficulty lies in the future.

On the product side, the profit margin is improving. However, the cost of transporting and storing is also rising. To protect low prices, not only product power but also logistics efficiency is necessary.

In the summary of the Q&A, it is also explained that they have contracted with new warehouses to lower logistics and storage costs, and that they plan to move toward cost reduction once warehouse operations get on track.

This story is plain, but it cannot be avoided when thinking about the low prices of Gyomu Super.

Even if you can make cheap products, if the cost of transporting them rises, profits will be eroded. Even if sales grow, if logistics costs become heavier than that, the strength of the mechanism will weaken.

It is necessary to watch not only the PB ratio but also the movements of the SG&A expense ratio and logistics costs.

Will the in-flight meal business become a new outlet?

This time, what caught my eye in Kobe Bussan's materials was the entry into the in-flight meal business.

In the financial results briefing materials, the acquisition of the in-flight meal business through the establishment of a JV with Gourmet Kineya is explained. The company positions this project as a growth investment to accelerate the development of imported PB and overseas expansion by utilizing the LSG Group's overseas bases while deploying our products in the in-flight meal business.

Rather than seeing this as mere diversification into a different industry, it might be easier to see it as "going to take a new outlet."

Gyomu Super is a large outlet for Kobe Bussan's products. Eating out and home-meal replacement are also outlets that use products and ingredients. If Kobe Bussan's products and semi-processed goods can be utilized, in-flight meals could also become a new outlet.

However, this is a point I want to watch cautiously for now.

In the materials, the company talks about the in-flight meal business as a growth investment, but synergies have not yet emerged. In the Q&A summary, it is also explained that about 450 million yen was recorded as sales business outsourcing fees for the costs incurred in the M&A.

The overseas in-flight meal business is a completely different world from Gyomu Super. Customer contracts, quality control, regulations in each country, human resources, base operations. If it goes well, it will become a new outlet, but it does not necessarily mean that the same winning method will work as is.

Therefore, the center of what we should look at now is still Gyomu Super and PB. On top of that, I want to confirm in-flight meals from the next time onwards as a "move by Kobe Bussan to try to increase outlets."

The difference from competitors lies in how they create low prices

Regular supermarkets also make efforts to sell cheaply. Bulk purchasing, special sales, efficiency in store operations, PB products. Every company is devising ways to keep prices down.

Kobe Bussan's difference lies in the fact that they are not trying to create low prices only at the "retail site."

There is a sales floor called Gyomu Super, and PB products are channeled there. To increase PB products, they invest in domestic PB production capacity. They procure products from overseas partner manufacturers. They use the FC network to expand stores. While looking at shipment amounts to existing stores, they also confirm the strength of existing stores.

It is not just buying and selling. Making, procuring, channeling, selling. They have built this flow as a single mechanism.

Kobe Bussan is a company closer to a food manufacturing and wholesale platform that reproduces low prices, rather than a "discount supermarket."

What lies beyond Gyomu Super

Kobe Bussan's long-term goals include 1,500 or more Gyomu Super stores, a PB ratio of 40% or more, 500 or more stores in all categories of the eating out and home-meal replacement business, improvement of the SG&A expense ratio through investment in logistics bases, and a consolidated operating profit margin of 10% or more.

Looking at these goals, you can see that what the company is aiming for is not just to increase Gyomu Super little by little.

Expand the outlet called Gyomu Super. Increase PB products there. Strengthen domestic factories and overseas procurement. Expand outlets to eating out and home-meal replacement. Increase logistics efficiency.

If you connect these, the figure Kobe Bussan is aiming for becomes visible.

It is not just about delivering cheap food nationwide. I think they are trying to become a comprehensive food company that can repeatedly reproduce "better things for less."

Of course, they are still in the middle of it.

The PB ratio was 34.62% in the second quarter of the fiscal year ending October 2026. There is a distance to the medium-term target of 37% and the long-term target of 40% or more. The number of Gyomu Super stores is 1,137 as of the end of April 2026. There is still room to expand until the long-term goal of 1,500 stores or more.

The SG&A expense ratio is higher than the same period last year. There is also the burden of logistics and warehouse costs. The in-flight meal business is also not yet at the stage to confirm results.

It is precisely because of this incompleteness that there is meaning in observing it.

Points to look at next

The numbers to look at next are not just sales and profits.

First, I want to look at the PB ratio. Will it approach 37% from 34.62%? Will it head further toward the long-term goal of 40% or more? Looking at this, you can see if Kobe Bussan is strengthening its ability to make products in-house.

Next is the shipment performance to existing stores. The shipment performance for existing stores in the directly managed area for the first half was 102.8%. Can this figure continue to grow by 2% or more each term? It is a figure that looks at how much product is flowing into existing sales floors, not the number of stores.

I will also continue to watch the number of Gyomu Super stores. How much will it progress from 1,137 stores at the end of April 2026 to the year-end target of 1,154 stores and the long-term goal of 1,500 stores or more? I also want to check the number of store closures, not just the number of openings.

Logistics costs and the SG&A expense ratio cannot be left out either. Even if the gross profit margin improves, if the deterioration of the SG&A expense ratio exceeds that, the mechanism supporting low prices will become difficult.

Regarding the in-flight meal business, it is not an expectation but an observation target yet. Will synergies using Kobe Bussan's products and procurement network actually emerge? It is necessary to look at not only M&A costs but also profit contribution and the progress of integration from the next fiscal year onwards.

My conclusion

The low prices at Gyomu Super are not just simple discounting.

Kobe Bussan possesses a massive outlet in the form of Gyomu Super, channels its private brand products there, and combines domestic manufacturing with overseas procurement. They are expanding their store count through a franchise network, increasing shipment values to existing stores, and addressing rising logistics costs.

Therefore, when looking at this company, the question of 'how many more Gyomu Super stores can be opened' is not enough.

What I want to see from now on is how much stronger they can make their existing outlets.

Will the private brand ratio increase? Will shipments to existing stores grow? Can they absorb the rise in logistics costs? Will the airline meal business function as a new outlet?

In the midst of high prices, affordable stores are a welcome presence. However, maintaining low prices requires underlying strength. Kobe Bussan is attempting to build that strength through private brands, factories, overseas procurement, a franchise network, and logistics.

Is the low price of Gyomu Super truly protected by private brands, existing store shipments, and logistics improvements, rather than relying on the number of stores?

With this question in mind, I want to continue watching and supporting Kobe Bussan.
The end