FamilyMart pushes ahead with international growth

This year is set to be an important year for Japanese convenience store giant FamilyMart.

The retailer is already the third largest convenience store operator in Japan after 7-Eleven and Lawson. However, if overseas markets are included, FamilyMart emerges as the second largest convenience store operator in the world after 7-Eleven.

Early this year the retailer placed international expansion at the top of its agenda - a recognition that the Japanese convenience store market is close to saturation. The global store network of FamilyMart reached 15,789 stores by the end of February 2010, with stores outside of Japan accounting for 51% of the total. By the end of 2010, this proportion is forecast to rise to 53%.

The new target is for the retailer to have 25,000 stores worldwide by 2015, including about 4,500 in China. About 1,600 new stores are expected to be added during 2010 alone, with most growth coming from China, South Korea, Taiwan and Thailand. Even in its established markets, such as Taiwan and South Korea, FamilyMart is looking to push on with expansion, as it does battle with rival 7-Eleven. China, especially, has been earmarked as a major growth engine. FamilyMart plans to increase the number of stores it operates in the country up from 359 at the end of February 2010 to 643 over the next year, before accelerating to an ambitious 4,500 by 2015.

FamilyMart has also recently opened its first store in Vietnam, which is viewed as a key market for future growth.

In contrast, the Famima!! operations on the west coast of the US have failed to meet expectations and the initial target of 250 stores now seems unachievable. At present the business has only nine stores.

Operations in North Korea, meanwhile, have ceased in view of the prevailing political climate.

Although Asian expansion is now firmly at the top of the agenda, there are still opportunities in FamilyMart’s home market. The retailer has, for example, begun merging the recently acquired am/pm chain into its FamilyMart network. During the fiscal 2010 year, FamilyMart plans to complete converting some 350 of am/pm Japan’s 1,104 stores to its own brand.

FamilyMart is therefore a retailer worth keeping track of.

If it can achieve its ambitious international goals, then there will be important implications for a number of key Asian markets.

Robert Gregory, research director, Planet Retail. For more information contact us on:

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