21 Nov, 2008 - Food and beverage retail sales increased by one percent to $370.5 billion in 2007 because of the sharp increase in economic activity in the 4th quarter of 2007 and the rise in food prices.
Although the total number of retail food outlets has also been decreasing, convenience stores and conventional supermarkets have continued to increase steadily over the years. Consumers’ concern about food safety has been increasing due to the recent food safety scandals.
Japanese Retail Market Summary
Total retail sales in Japan (food and beverages, general merchandises and fabrics, apparel and accessories) amounted to $614.6 billion in 2007, with total food and beverage retail sales accounting for $370.6 billion of that figure. Total retail sales have been flat in recent years due low domestic consumption caused by negative population growth, an aging
population and a sluggish economy.
Annual gross profits of Seven & I and Aeon, Japan’s largest and second largest retail group respectively, declined in 2007. Even though Japan’s overall retail trade has been generally flat over the last several years, sales in the retail food and beverage sector increased by around $3 billion in 2007 because of a sharp rise in food prices. For example, the Japanese government has increased the price it charges to flour mills for wheat by 40% over the last year. Prices of many basic food products in Japan including noodles, bread, egg, cooking oil, milk and milk products, soy sauce, meat, fish, etc. have also significantly increased. Butter is in short supply and many municipal governments are increasing school lunch fees to accommodate high food prices.
Trends in the Retail Food Sales
Overall retail food sales in Japan are typified by:
· The value of retail food sales increased slightly nationwide in 2007
· Decreasing number of food and beverage retail outlets
· Strong concern about food safety - Anshin (reassurance) and Anzen (safety)
· Increasing food prices
· Continuous growth in “home meal replacements” (HMR)
· Strong interests in “healthy foods”
· Expanding usage of private brands
· Diversification of store concepts
· Increasing consolidation in the food industry
· Growth in imported food
The value of overall retail food sales increased slightly in 2007 to $370.6 billion. Amidst this backdrop, there has been an industry restructuring in nearly every key segment, with all types of food retailers scrambling to find new ways of satisfying consumer needs.