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Panasonic to exit cash registers in pursuit of higher margins

With new partner Blue Yonder, Japanese company to focus on supply chains

Panasonic is a major provider of cash registers to the fast-food industry, including McDonald's Japan. 

OSAKA -- Panasonic is leaving the cash register business within the fiscal year ending March 2021, Nikkei has learned.

The Japanese company entered the point-of-sale, or POS, field in the 1970s, offering its registers to supermarkets and McDonald's Japan, with which it has had a decadeslong partnership.

But with rivals Toshiba Tec, NEC Platforms and Fujitsu Frontech controlling roughly 80% of the market, Panasonic has struggled to find growth through sales of the machines.

Instead, the company plans to shift upstream, offering solutions to optimize the entire supply chain.

Central to this effort will be its partnership with Arizona-based supply chain management software provider Blue Yonder. In May, Panasonic announced a roughly $800 million investment to take a 20% stake in the company.

Blue Yonder aids clients in building lean, fast supply chains with help from cloud computing, artificial intelligence, and machine learning. "Panasonic can advance its digital shift by teaming with Blue Yonder," said Hideaki Harada, a senior vice president at the group's connected-solutions unit.

Especially enticing for Panasonic is Blue Yonder's business model that continues to deliver high margins. The American company not only has a stable revenue stream of system usage fees, but also a merit-based incentive from clients pegged to how much they succeed in improving profits.

Blue Yonder's EBITDA, or earnings before interest, taxes, depreciation, and amortization, to sales ratio was 24% in the most recent fiscal year.

Panasonic, which has gone through a particularly rough patch due to the new coronavirus, seeing group net profit drop roughly 20% in the fiscal year ended March 31, wants to emulate Blue Yonder's success.

Founded in 1918, Panasonic has more than 30 divisions, including for housing equipment, home appliances, automobile products, industrial machines and electronic parts. It has been shifting away from selling devices and toward making money from services, hiring Yoky Matsuoka, a former Google executive, to apply her experience at Google's Nest smart-home unit to enhance Panasonic's own offerings.

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