TOKYO -- Three major Japanese convenience store chains have agreed to jointly develop and market soft drinks to cut procurement costs, to boost profit margins and to better compete with industry leader Seven-Eleven Japan Co., reported The Japan Times.
The three chainsLawson Inc., FamilyMart Co. and Circle K Sunkus Co.are ranked second, third and fourth, respectively, in market share in the country's c-store sector, with a combined 21,000 locations, said the newspaper. (As reported in CSP Daily News, FamilyMart has begun opening Famima! C-stores on the [image-nocss] U.S. West Coast, with plans for more U.S. expansion.)
The alliance is looking for an edge in its battle with Seven-Eleven Japan, which has 11,000 outlets, the report said.
They will start marketing three new soft drinks in August on a trial basis by teaming up with Coca-Cola (Japan) Co. and two other beverage makers. The drinks will sell in 500-ml plastic bottles and other sizes, said the report.
The partners may expand their cooperation to include marketing of alcoholic beverages and processed food, depending on how successful the joint marketing effort is for soft drinks is.
The three chains have fallen behind Seven-Eleven in terms of their profitability. The product development alliance is aimed at strengthening their bargaining power with suppliers and manufacturers.
Against this backdrop, Seven-Eleven has relied on its size and product development skills to consolidate its market leadership, said the paper, and smaller c-store chains are struggling and having to rethink their strategies. Analysts say mergers may lie ahead as the Japanese c-store industry goes through a shakeout.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.