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ITOCHU Group Top Management Interview
January 2009
FamilyMart Co., Ltd.
President Junji Ueda
Established in 1981, FamilyMart Co., Ltd. is the only major convenience store chain to be “born in Japan.” In this interview, we spoke with President Junji Ueda about how FamilyMart, in such a competitive market, has continued to grow by extensively drawing out characteristics that set it apart from other companies.
Last December, FamilyMart marked 20 years since the opening of its first store overseas. How many overseas FamilyMart stores are there, and what factors do you think are behind the brand's acceptance abroad?
We proudly claim an overwhelming market share in South Korea, where we currently have around 4,100 stores. We opened our first store in Taiwan in December 1988, and have since expanded our operating regions to include countries such as Thailand, China, and the United States. Economic growth in Asia, most notably in China, is triggering more active consumption among young people. The reason that FamilyMart has been so well received lies to a certain extent in things like the causal atmosphere that our stores offer, which is distinct from that of local stores. But I think the biggest reason is the absolute confidence that people have in the safety and reliability of our products.
What do you consider to be the reasons behind FamilyMart's healthy performance despite the tough environment that the convenience store industry faces?
One reason is our thorough commitment to the fundamental rule of the retail industry—“S&QC (Ser vice & Quality, Cleanliness).” Another, I think, is our ongoing commitment to promotion activities that are befitting of the FamilyMart brand. Here, we encourage particularly our younger, midcareer employees to each think and act in ways that they think are best suited to the FamilyMart name. These activities have led to three extremely popular core products (pasta, fast food, and desserts) that have given us an overwhelming advantage versus other companies.
Can you elaborate a bit more on the promotion activities that you refer to?
These activities invite each person to consider and take action on what they believe is necessary to build up FamilyMart's strengths, and what they can personally do to achieve this. Since the start of these activities with a gathering of our younger, mid-career employees in 2005, I have ordered managers to take part, and to provide cooperation with these activities across the board. These activities have not only grown to encompass franchise stores, but have spread to Taiwan as well.
At one time, business performance in Taiwan was flagging somewhat. Believing that the activities taking place in Japan should also be adopted in Taiwan, we sent an instructor from FamilyMart Japan there, who joined forces with local staff to launch the promotion of activities befitting the Taiwanese version of FamilyMart. The effect of this decision was seen half a year later, when business performance picked up sharply.
So in this way, I think that what makes us a winner in the industry is our dedication, even in an adverse consumer environment, to try to increase the number of customers who visit our stores because they like what FamilyMart has to offer.
Store in Hollywood (Los Angeles), US
What are some examples of activities at your franchise stores?
Each store has identified its own distinctive features and shaped those in ways that befit the FamilyMart brand, and in ways that will delight customers. For instance, stores that are frequented by long-distance drivers offer customers cold hand towels to refresh themselves with during summer, and hot hand towels during winter. Stores located near schools for the visually impaired have all price cards printed in Braille. We publish these and other examples of activities that customers have praised in a pamphlet called “FamilyMart Hospitality,” which we distribute to franchise stores and to all of our employees.
You suggested earlier that influences from the “FamilyMart feel” campaign befitting the FamilyMart brand have also appeared in products. What specific products were you referring to?
We launched the “Sweets+ (Sweets Plus)” series, revamping our original desserts already known for their delicious taste by starting from scratch, to create an overwhelmingly distinctive product line.
Another product line we have confidence in is our fried products, especially our fried chicken and French fries. Then there's our “Three-Star Pasta,” which I can proudly say we have raised to a level that would take any rival years to reach.
FamilyMart also has an ample line of products targeting seniors, does it not?
Men and women in their 20s and 30s and middle-aged men make up about 75% of all convenience store customers. Adding seniors to this mix would potentially make us stronger than either supermarkets or department stores. To do this, we have given thought to product lineups and store layouts that might attract seniors, creating Famima Fresh corners in stores where we sell vegetables, fruit, meat and other fresh produce as well as amberjack, fugu, and other types of sashimi. We have also created teams that are dedicated to developing products specifically for middle-aged and senior customers under what we call the “Oyaji Project.” In fiscal 2007, we divided our development framework into two teams—“Team Oyaji,” comprising members in their 40s and 50s, and “Team Baby Boomer,” consisting of members in their late 50s and early 60s—to conduct more fine-tuned product development.
“FamilyMart Hospitality” pamphlets distributed to franchise stores and to all employees
Store in South Korea
Popular item: Mentaiko (cod roe) pasta
FamilyMart has a stated goal of opening 20,000 chain stores across the globe. In what ways are you hoping to develop stores both domestically and abroad?
In Japan, being the preferred chain is important. Our goal is to create stores that exude hospitality, thereby solidifying the business base by raising the level of customer support. Ultimately, we hope to have 8,000 stores in operation nationwide.
Moving forward, we are working aggressively to open more stores overseas, with the aim of operating 20,000 stores globally. Achieving this target could establish FamilyMart as the world's top convenience store chain in the future. China represents a potentially huge market, particularly in the coming years. Right now, we have 177 stores in operation, mostly in and around Shanghai, and have just established a FamilyMart business model for China. We plan to conduct the mass opening of a large number of stores there beginning next year.
What are your aspirations for FamilyMart as president?
I want us to move quickly to establish a global network of 20,000 stores. Since we are training an enthusiastic force of young managers and employees, I want to take the time to make sure that our fundamentals are as sound as they can be so that we can look ahead to having 40,000 stores in operation worldwide 10 years from now.
Store in Taiwan
Store in Shanghai, China
Store in Thailand
Overview of FamilyMart Co., Ltd.
Established |
September 1, 1981 |
|---|---|
Paid-in Capital |
¥16,658 million |
Representative and President |
Junji Ueda |
Employees |
3,030 (As of August 31, 2008; non-consolidated) |
Stores |
14,488 (Japan: 7,318, including AFC; overseas: 7,170; as of November 30, 2008) |
Head Office |
1-1, Higashi-Ikebukuro 3-chome, Toshima-ku, Tokyo |
Subsidiaries & Associates