Seven-Eleven Japan hell-'bento' on being Nagoya's No. 1

NAGOYA (Kyodo) Convenience store chains have been engaged in cutthroat competition for survival in Nagoya, ever since Seven-Eleven Japan Co. opened its first outlets here in December 2002.

Seven-Eleven Japan had opened 156 outlets in Aichi Prefecture, including 77 in Nagoya, as of the end of November.

Sales at the new outlets are brisk, with each store chalking up daily sales averaging 650,000 yen, about 100,000 yen more than the average at the company's other outlets.

Though the number of convenience stores shows sluggish growth elsewhere due to the slow economy, Aichi Prefecture has seen a sharp increase, with the number rising from 1,700 in February 2002 to 1,923 last November.

The increase can be attributed to the intention of Circle K Japan and other rival companies, as well as Seven-Eleven Japan, to boost their presence, industry watchers say.

Reflecting the active opening of new outlets, rent for viable store space has risen by several thousand yen per "tsubo" (3.3 sq. meters) on average, a real estate agent said.

Seven-Eleven Japan said it plans to open 100 more outlets in Aichi Prefecture by February 2005 and intends to expand its operations to five other central prefectures -- Gifu, Mie, Fukui, Ishikawa, and Toyama -- in two to three years.

As of December, it had 10,080 outlets located in 32 prefectures.

Alarmed by the growing presence of Seven-Eleven Japan, Nagoya-based Circle K Japan, which has the largest number of outlets in the city, with 250, is striving to develop original items, principally fast food such as "bento" boxed lunches and side dishes, and to evaluate its management practices, including personnel reduction.

Cocostore Co., another chain based in Nagoya, is now focused on the development of a new type of outlet targeting female customers, by offering bread fresh from the oven.

There is firm consumer demand in Aichi Prefecture, backed by strong business performances of Toyota Motor group companies based here, the scheduled opening of Aichi Expo in 2005 and a new international airport next year.

As for the outcome of the competition, Toshihiro Uchida, an economist at UFJ Institute, predicted, "Seven-Eleven Japan will extend its influence, as the company excels in product development.

"To win the fierce competition, it is necessary to continuously provide fine-tuned services to customers," he said.

Kiyoshi Hijikata, president of Circle K Japan, likening the competition to musical chairs, said: "The game is in its final stage. Only five or six convenience store chains will remain competitive a few years from now."