Friday, May 18, 2012

No. 24: The concept of a convenience store is changing (May 18, 2012)

Rawson, Japan’s second largest convenience store chain, will expand the area per store to nearly 160 square meters to increase the number of such items as vegetables and prepared foods. The average area of a new convenience store was 133 square meters in 2011, and the company will increase the area by 23 square meters to 156 square meters. It has already been operating a test store of this size, and plans to start to expand stores of this size in full swing coming June. The company is scheduled to build 800 new stores this year, 50-70% of which will be a store of the bigger area. Construction cost is expected to remain the same as in 2011 partly because of the decreasing price of LED lighting and review of external wall materials.

The big area will allow the company to increase the items by 300-500 to attract the elderly who wish to shop in the vicinity and housewives who wish to buy prepared foods for dinner on their way back to home from work. In addition, it wishes to increase the number of private brands, and some stores now prepare foods inside the store for shoppers. With the expansion of service and increase of handling items, the company naturally needs to expand the area. Currently, the concept of a convenience store is growing close to a small supermarket specializing in foods and daily necessities. Actually, the difference in sales between supermarket and convenience stores is becoming smaller.  

As the competition among the convenience store chains intensifies, each of them focuses on some specific strategic points. Seven-Eleven will introduce seasonings with ingredients that allow shoppers to prepare foods only with a kind of vegetable they buy at the store. Rawson plans to increase the number of contracted firms to 30 in three years to increase the line-up of vegetables. Family-Mart wishes to increase the number of kinds of small vegetable packs sold at 100 yen each, and Circle K will introduce cut vegetable easily prepared by a kitchen microwave. 

A convenience store is growing bigger with an increase of handling items

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