Tesco Cashes in on Japan's Revival

The International Herald Tribune news published an announcement by Tesco on Wednesday, April 18, 2007 of the first store opening by its own name in Japan towards the end of this month.

The British company is currently at rank five among the world's largest retailers and is expanding overseas. With nearly 100 supermarkets in Japan under the name Tsurukame already operational, Tesco intends to launch its Tesco Express stores in Japan, a market where foreign retailers have been known to get cold shoulder by local shoppers.

The move comes on the heels of evidence of Japan's long overdue revival in consumer spending. The largest economy in Asia appears to be finally emerging from a lump that has lasted more than a decade.

Under the Tsurukame brand name, there are 106 Tesco stores operating in Japan and the decision for the name change is to combat competition from the ubiquitous convenience stores in Japan like 7-Eleven and Lawsons.

Of late, Japan's retail chain stores have increasingly been taking to the new practice of directly importing products from abroad for various reasons. Among them are the entry of foreign chain store operators, changes to distribution channel, growing consumer awareness of imported goods, aspiration to increase visibility of specialty chains to combat competition, and the increased affordability of Japanese consumers.

In Japan, supermarkets have become an integral aspect of the daily lives of people. What began as a store for one-stop shopping for food and other daily needs, the markets have made the transition into centers for payment of utility bills, sending packages and faxes, making photocopies and making ATM transactions.

In Japan, consumers have the tendency to associate price with quality and are hesitant about low priced mass products. However, there are also increasing efforts to cut down expenditure with growing price consciousness. The popularity of bargain stores is on a rise.

A research analyst at RNCOS opines that the Japanese retail industry is adopting innovative measures to thwart competition in catering to consumer needs. This is evident in the increasing number of outlets and supermarkets in the country. Additionally, the vast range of services being offered by supermarkets is also contributing to the increase in their popularity.

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