A Study of Convenience Store Operations

Submitted by: Sean Crockett, Alberta Exchange to Japan
Alberta Agriculture, Food and Rural Development

The Japanese Retail Environment

• In the total retail industry over the past 15 years, the number of retail shops in Japan has fallen by 300,000 while the total sales volume has risen by 14 trillion yen.
• The decrease in number of retail shops is largely due to the gradual phasing out of traditional specialty shops (i.e. fish, tobacco).
• Overall retail industry sales were up 158% in 1997 from 1982 levels, however the number of stores in 1997 were only 82.5% of 1982 levels.
• In Japan, there are currently over 50,000 convenience-type individual stores.
• The number of convenience stores in 1997 has grown to 150% of 1991 levels. Over the same period, General Merchandise/Supermarket stores grew to 116% of 1991 levels, department stores to less than 105% of 1991 levels, and specialty stores fell to 85% of 1991 levels.
• Convenience store sales were up 167% in 1997 from 1991 levels, while department stores and specialty stores had negative growth over the same period.
• Japan industry leader is 7-11.
• Even after the bursting of the economic bubble there has still been a 7-8 year up-trend in the Japanese convenience store industry. However, the last 2-3 years have seen slower growth. And, while total convenience store industry sales levels are still growing (because of increased number of stores), the average daily sales level per store has been falling.
• There has been an increase in the number of married (family) customers and an increase in the number of midday customers, but a decrease in nighttime customers (initially a key segment).
• The most important key for new growth is systems planning. In the recession's wake, only the strongest firms with good information systems and key business fundamentals are expected to survive.
• In Japanese retail, it is vital to learn how to adapt to change (changing product assortments with changes in environment and demand), especially in the convenience store industry.

  This information is maintained by: Gail Atkinson
  Last Revised/Reviewed September 22, 1999

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