Traditional grocery retailers has been seeing its sales decline for many years, due to strong competition with modern grocery retailers such as convenience stores and supermarkets, and even other retail channels, such as drugstores/parapharmacies and e-commerce. With the fast-moving shift to digitalisation and the increasing demand for convenience from consumers, traditional grocery retailers lacked the agility and capability of keeping up.
In order to support small businesses, various initiatives were announced by the government during COVID-19. While it did not succeed in saving all businesses, many small players were able to survive thanks to this support.
As consumers shift their shopping habits towards e-commerce, it has also become important for traditional grocery retailers to have a presence online. For small/independent businesses, it is very difficult to set up shops online, as they lack the infrastructure and funding to do so.
Compared with modern grocery retailers, traditional grocery retailers have the advantage of building a speciality and expertise in a particular narrow category, as such businesses do not necessarily have to be mass-targeted. In the review period, food/drinks specialist retailers which focused on a specific food/drink category gained popularity amongst selected consumers.
With cashless payment quickly becoming a norm amongst Japanese consumers, traditional grocery retailers will also need to adapt to this change by implementing new payment systems and strengthening their digital strategies. By so doing, they can also create new opportunities for campaigns and attract consumers.
While the challenging competitive environment and slightly out of date business structure may be obstacles to the growth of traditional grocery retailers in Japan, their unique atmosphere, customs and traditions, such as close communication between store owners and consumers, are still valued in Japan. They are even somewhat longed-for, especially after the prolonged social distancing due to COVID-19 and indirect communication becoming a norm, with technology leading to less need for human interaction.
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Understand the latest market trends and future growth opportunities for the Traditional Grocery Retailers industry in Japan with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Traditional grocery retailing is the aggregation of those channels that are invariably non-chained and are, therefore, owned by families and/or run on an individual basis. For Euromonitor traditional grocery retailing is the aggregation of three channels: Independent Small Grocers, Food/Drink/Tobacco Specialists and Other Grocery Retailers. While there can be modern (i.e. chained) food/drink/tobacco specialists or other grocery retailers, due to the store's presence in the channel, these stores are still considered as traditional for Euromonitor International.
See All of Our DefinitionsThis report originates from Passport, our Traditional Grocery Retailers research and analysis database.
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