New destination: Japan supermarket KINOKUNIYA looks to get on track overseas as COVID-19 slows domestic sales
Last year, KINOKUNIYA recorded a slower sales growth at 103% year-on-year in Japan, while the year before was 118% y-o-y.
The 111-year-old supermarket brand originally started as a fresh fruits store, and has become a premium, high end supermarket in Japan with 34 outlets mainly in the Tokyo metropolitan area, in shopping malls, department stores, and rail stations.
KINOKUNIYA retails fresh produce, meat, cheeses, ready-to-eat meals as well as baked goods.
According to Hiroshi Furuya, director of EJRT Asia (trading arm of JR East), its stores in railway stations and cities saw sales dropped when most people started working at home.
However, “its residential area stores saw sales rise, as people don’t need to commute, and spend more time at home cooking.”
“We also saw that due to the increased time at home, the number of people who wanted to enjoy slightly extravagant meals at home and those who enjoy cooking with carefully selected ingredients have increased.”
Hiroshi added that long shelf life products such as canned foods and cup noodles sold better amid the pandemic, because “people were trying to limit going out often for groceries, so these products can keep longer without spoiling.”
In Japan, KINOKUNIYA operates its own central kitchen and three factories, to produce its in-house branded products. In-house brands make up 35% of all its products except fresh items.
The supermarket also imports international products such as cheese from France, lamb from New Zealand and delicatessen.
Recently, JR East opened its first KINOKUNIYA supermarket pop-up store overseas as part of its plan to promote its lifestyle business and brands.
The pop-up stores were opened in Singapore, inside a department chain (Isetan) and a café (Japan Rail Café).
It will retail some of its popular products back home, including its house brand Strawberry Butter, Premium Truffle Soy sauce and Drinking Yuzu Vinegar.
On why the company chose Singapore as its first international market, Hiroyuki Hayashi, director of lifestyle business development at EJRT Asia said: “We think that there are many customers in Singapore who will appreciate our products and quality because of their high standard of living, diverse lifestyles, and tolerance for different cultures.
“Many Japanese food-related companies have already entered the market, and Singaporeans have become familiar with Japanese food culture. As such, we felt that Singapore was a promising market.”
“Additionally, due to the outbreak of the coronavirus, the demand for ready-to-eat meals and home-cooked meals is increasing in Japan, and we believe there should be a similar tendency in other countries.”
The firm will consider transforming the pop-ups into permanent stores after assessing sales. It is also looking at new overseas locations.
In Singapore, the company also operates a co-working facility (One&Co), as well as a food and retail shop (JW360). It has a joint venture with public transport operator SMRT to develop retail and commercial facilities in train stations.