* Q2 operating profit falls 2.5 pct to 79.9 bln yen
* Cuts annual operating profit outlook to 308 bln yen
* Shares up over 10 pct this year, beating 4 pct Nikkei rise
By James Topham
TOKYO, Oct 4 Seven & I Holdings Co's
quarterly operating profit fell 2.5 percent as weaker sales at
its supermarkets offset growth from its convenience stores,
leading Japan's top general retailer to trim its annual outlook.
A decline in demand after last year's post-quake sales
bounce and intense competition over food prices at large-scale
stores is set to weigh on the profits of Japan's major general
retailers as they release financial results.
The owner of 7-Eleven, the world's largest convenience store
chain, reported on Thursday an operating profit of 79.9 billion
yen ($1.02 billion) between June and August.
Seven & I, which competes at home with Aeon Co and
Seiyu, the Japan arm of Wal-Mart Stores, also cut its
forecast operating profit for the year to February 2013 to 308
billion yen from its earlier estimate of 315 billion yen.
That compares with the average estimate of 310.9 billion yen
in a poll of 18 analysts by Thomson Reuters I/B/E/S for Japan's
largest general retailer in terms of market capitalization.
Cooler summer temperatures in June and July caused softer
sales of seasonal goods like cold beverages and ice cream, while
demand for food and other essentials fell from last year at its
Ito-Yokado stores and York-Benimaru supermarkets following the
mammoth earthquake and tsunami.
Japanese monthly retail sales overall rose 1.8 percent in
August, government data showed last week, after falling 0.7
percent in July and ticking up 0.2 percent for June.
But the near future is cloudy for Japanese retailers as
service-sector sentiment deteriorates, with strength in domestic
demand looks to fade, according to Japan's central bank's
quarterly Tankan issued earlier this week.
Japan's top supermarket operator Aeon and major convenience
store chain FamilyMart Co are both scheduled to issue
financial results next week.
On Wednesday, rival Lawson Inc posted a quarterly
operating profit of 20.6 billion yen, a 4.5 percent year-on-year
rise, as a broader customer base, including women and senior
citizens, and expanded offering of higher margin private brand
goods lifted profits for the convenience store operator.
Seven & I shares have risen nearly 10 percent in the year to
date, higher than a 4 percent gain in the benchmark Nikkei
average. Before the earnings announcement, shares of
Seven & I ended 1.7 percent higher, against the Nikkei's 0.9