Foreign supermarkets struggle to make a profit in Japan

Jul 22, 2018 | News On Japan

Jul 22, 2018 (Japan Times) - Some of the major foreign supermarket chains that entered Japan around 2000 offering low prices made possible through bulk purchases have exited the country.

Carrefour SA of France and Tesco PLC of Britain pulled the plug on their supermarkets in 2005 and 2013, respectively.

Even the worldâ€™s largest retailer, Walmart Inc. of the United States, is considering selling Seiyu GK, a chain of over 300 stores, informed sources said. Walmart acquired a stake in Seiyu in 2002 to introduce its â€œEvery Day Low Priceâ€ strategy to Japan. It thought success here would be needed to become a global retailer.

But Japanâ€™s population is declining, posing a major hurdle to all retailers. In addition, Japanâ€™s consumers are said to be picky about quality. They buy â€œitems that are worth more than their prices,â€ a senior official at a major Japanese retailer said.

But Costco Wholesale Corp. of the United States and Metro AG of Germany, which launched their Japan operations around 2000, are surviving. They are competing in areas outside pricing.

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