Supermarkets in Japan

2020 IMPACT

Change in shopping behaviour benefits supermarkets

Supermarkets remains the largest retail format in Japan in terms of value sales, with it also remaining the dominant grocery retailers channel. Nevertheless, the channel had been under pressure towards the end of the review period, with value sales declining in 2018 and 2019.

Deli counters lose business as consumers shop less frequently

While supermarkets saw a return to growth in 2020 sales did not improve for all products. While fresh produce performed well deli counters in many stores saw demand fall.

Supermarkets experience stock shortages, while AEON strengthens its lead

Due to the spread of COVID-19, supermarkets frequently saw shortages of products, occasionally leading to products going out of stock. Toilet paper and tissue paper, for example, witnessed initial panic buying with consumers concerned about supplies running out.

RECOVERY AND OPPORTUNITIES

Supermarkets faces an uncertain future as competition intensifies

After a strong showing in 2020, supermarkets is expected to struggle for sales growth over the forecast period. Supermarkets is confronted with increasing competition from rival retailing formats, including convenience stores, drugstores, and e-commerce.

Suburbia could become the new battleground

With consumers in Japan leading increasingly fast-paced everyday lives, and to counter competition from rival formats such as convenience stores and drugstores, some supermarkets players are opening so-called mini-supermarkets. These stores are usually positioned between conventional supermarkets and convenience stores and are seen as urban-style supermarkets.

Supermarkets will need to focus on what they are good at to stand out in an increasingly congested marketplace

Rather than simply opening more outlets it is believed that supermarkets will need to focus on their core strengths as the competitive landscape becomes more intense. These strengths could include products and services that meet the specific demands of consumers in the area; loyalty/membership programmes which enable shoppers to receive attractive benefits by shopping in the brand’s stores; or new and more convenient shopping and payment methods, such as click-and-collect or drive-through services.