The five biggest convenience store operators in Japan claimed more than 90% of the market by sales for the first time in fiscal 2013. Sales for all Japanese convenience store locations totaled 9.81 trillion yen ($95.7 billion) for fiscal 2013, according to a Nikkei survey.
The market continued to expand, with sales growing 4.6%, counting only companies for which year-on-year comparisons are possible. Convenience store chains opened 4,480 new stores, 8.4% more than they had the previous fiscal year. Locations totaled 53,008 at fiscal year-end, up 5.8% from the year before. While the market was previously seen as reaching saturation at around 50,000 stores, the chains may open a record number of new locations in fiscal 2014.
The growing market is increasingly dominated by a few big companies. Top five players Seven-Eleven Japan, Lawson, FamilyMart, Circle K Sunkus and Ministop together generated sales of 8.95 trillion yen to account for 91% of the industry total.
While 23 companies operate stores under their own brands, the number of new stores launched by chains outside the big five fell by nearly half in fiscal 2013 -- a sign of the mortal combat many have found themselves in.
Gaps in profitability are widening among the big players. Average daily sales per store came to 664,000 yen at Seven-Eleven, against just 542,000 yen for Lawson locations and 521,000 yen for FamilyMart stores. Seven-Eleven's lead over Lawson grew 1,000 yen from the year before. With average daily per-store sales of 457,000 yen, Circle K Sunkus trailed Seven-Eleven by more than 200,000 yen.
While 23 companies operate stores under their own brands, the number of new stores launched by chains outside the big five fell by nearly half in fiscal 2013 -- a sign of the mortal combat many have found themselves in.
Gaps in profitability are widening among the big players. Average daily sales per store came to 664,000 yen at Seven-Eleven, against just 542,000 yen for Lawson locations and 521,000 yen for FamilyMart stores. Seven-Eleven's lead over Lawson grew 1,000 yen from the year before. With average daily per-store sales of 457,000 yen, Circle K Sunkus trailed Seven-Eleven by more than 200,000 yen.
"At this rate, we may even have our No. 1 spot in the Tokai region snatched away within a few years," Circle K Sunkus President Shuichi Takeuchi laments. Tokai, which includes Nagoya, is a stronghold of the company. In fiscal 2013, a number of regional operating companies that formerly had franchise agreements with Circle K Sunkus switched over to its rivals. A company running about 110 stores in parts of Kyushu signed a franchise agreement with Lawson last August.
March brought the news that a different operating company would convert about 100 stores in Kyoto, Nara and elsewhere into Lawsons. Even among the top three players, Seven-Eleven's momentum stands out. In fiscal 2013, Same-store sales for Lawson and FamilyMart each fell short of the previous fiscal year's figures. Seven-Eleven, by contrast, logged a 23rd straight month of increases in June. The chain's growth is driven by its ability to develop private-label products and other items.
Seven-Eleven began selling last month a Coca-Cola offering developed exclusively for its stores, marking the beverage company's first time making a product specifically for a retailer in Japan. The Japanese giant apparently approached the American partner with the idea for such products several years ago, only to be turned down. "They were convinced by Seven-Eleven's overwhelming sales volume," says an official from another major convenience store operator. "It would have been impossible for another chain, including ours."
(Nikkei Asian Review)
March brought the news that a different operating company would convert about 100 stores in Kyoto, Nara and elsewhere into Lawsons. Even among the top three players, Seven-Eleven's momentum stands out. In fiscal 2013, Same-store sales for Lawson and FamilyMart each fell short of the previous fiscal year's figures. Seven-Eleven, by contrast, logged a 23rd straight month of increases in June. The chain's growth is driven by its ability to develop private-label products and other items.
Seven-Eleven began selling last month a Coca-Cola offering developed exclusively for its stores, marking the beverage company's first time making a product specifically for a retailer in Japan. The Japanese giant apparently approached the American partner with the idea for such products several years ago, only to be turned down. "They were convinced by Seven-Eleven's overwhelming sales volume," says an official from another major convenience store operator. "It would have been impossible for another chain, including ours."
(Nikkei Asian Review)
