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    The failure of multinational foodretailers in Japan: a matter of

    convenience?Janet Haddock-Fraser

    University of Kent, Canterbury, UK

    Nigel PooleUniversity of London, London, UK, and

    Mitsuhiro DoishitaAgricultural Production Bureau, Ministry of Agriculture,

    Forestry and Fisheries of Japan, Tokyo, Japan

    Abstract

    Purpose The purpose of this paper is to address the question of why world major supermarketchains have been unsuccessful so far in the Japanese market. The paper considers arguments from theliterature that differences in consumer attitudes and behaviour between the two markets may be thedeterminants of the success, or otherwise, of the large US and European supermarkets.

    Design/methodology/approach A review of literature about Western and Japanese retailing isfollowed by an account of exploratory empirical research into Japanese consumer grocery purchasingand consumption behaviour.

    Findings The results support an argument that the large store one-stop shopping supermarketformat popular in the UK/EU is not and will not be the preferred format in Japan. Convenience,matters, but it is not the same concept as in the UK, for example.

    Research limitations/implications The sample survey is purposively biased towards younger

    female shoppers from the working population who will have a significant impact on future consumerbehaviour patterns. Results are more inferential than statistically validated hypotheses.

    Practical implications Supermarket chains should open a larger number of smaller stores,concentrating on frequently delivered and high quality products, above all in the fresh foodscategories. Moreover, the growth of the small convenience store format in markets such as the UKand California suggests that western consumers desires for convenience are becoming more likethose of Japanese consumers.

    Originality/value The paper shows that there has been little effort, to date, to demonstratethrough primary research whether unique characteristics and buying behaviour do exist in theJapanese marketplace.

    Keywords Japan, Convenience foods, Consumers, European Union

    Paper type Research paper

    IntroductionWal-Mart is battling to survive in Japan (Holstein, 2007); in Japan foreign retailershave so far had a lacklustre record (Reuters, 2007); foreign investment in Japan is notalways a cakewalk for international retailers (USDA, 2006). These comments aretypical of media releases relating to international food retailers and theirless-than-successful attempts to penetrate the Japanese retail sector:

    The current issue and full text archive of this journal is available at

    www.emeraldinsight.com/0007-070X.htm

    A matter ofconvenience?

    327

    British Food JournalVol. 111 No. 4, 2009

    pp. 327-348q Emerald Group Publishing Limited

    0007-070XDOI 10.1108/00070700910951489

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    . the French international retailer Carrefour, having entered the market in 2000,sold its outlets and withdrew from the country after only four years, havingfound that its discount strategy and hypermarket model failed to attractcustomers emerging from a climate of recession and with increasing concern for

    style rather than a wide range of standard products at every day low prices (JijiPress, 2005);

    . Wal-Mart, having taken over a Japanese supermarket in 2002, has been in deficitfor four years. Only recently has it reported that Seiyus (the retailer purchasedby Wal-Mart) total comparable store sales for fiscal 2007 were positive for thefirst time in 15 years (Wal-Mart Stores, 2007, p. 10); and

    . having taken over two small grocery supermarket chains, Tesco has not yet hada significant impact on the food retail scene, and the limited presence enjoyedonly modest overall sales growth in 2006 (Tesco, 2007). Nevertheless, Tescosexpansion plans depend on a small store format rather than the typicalinternational hypermarket model (Reuters, 2007).

    This paper addresses the question, why have these major supermarket chains beenunsuccessful? There are plenty of plausible reasons, such as a depressed market,management and employee conflict, and a restrictive policy environment. Also, maybe

    Japanese attitudes to foreign products are a barrier that prevents foreign retailers fromprospering? Or western retailers do not understand the tastes and shopping behaviourof Japanese consumers, and do not offer products with attributes attractive to the

    Japanese market? It has been argued also that the Japanese consumer has distinctattitudes toward food purchase that may act as an inhibitor for international foodretailers (for example, Schmekel and Larke (2002), Sato (2004)). Differences in culturalfit between a major chain and its employees and customers have been cited as aweakness (Holstein, 2007). According to the United States Department of Agriculture,

    it is demographic changes specifically the fast-ageing population more thanincome growth, which affects the outlook for international retailers (USDA, 2006). Butopportunities remain: Japan has the second highest GDP in the world, and its retailingmarket retains much potential, provided that retailers can tap into rapidly changingconsumer lifestyles and align their strategies to meet new demands (Euromonitor,2006).

    There has been little effort, to date, to demonstrate through primary researchwhether unique characteristics and buying behaviour do exist in the Japanesemarketplace. There has been little consideration of structural or other factors thatmight be acting as barriers to growth. In addition, there is limited consensus from theliterature linking consumer behaviour and the retail model in Japan: whether thebuying behaviours of Japanese consumers relate to distinct attitudes to food products

    per se, or whether their food purchase behaviour relates to the traditional form andstructure of food retailing. The objective of this paper is to explore reasons for theweakness of international retailers in Japan by investigating what are the drivingforces for food shopping behaviour in Japan, and whether they relate to theuniqueness of the Japanese consumer or to the retail form.

    The paper is structured as follows. The next section reviews the current food retailenvironment in Japan, including an evaluation of research on the structure and formatof the marketplace, and consumer attitudes and behaviour. An account follows of the

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    methodology used to survey the Japanese food consumer. Following this is adescription and analysis of the results, with concluding comments to finish.

    The Japanese retail environmentThe macro environment in Japan

    Japan is one of the most educated, wealthy and developmentally advanced economiesin the world. It is the second largest national economy in the world with a GDP in 2005of $4,751 billion, at that time equivalent to the sum of the GDPs of the four BRICs(Brazil, Russia, India and China) countries combined and almost twice that of Germany($2,797 billion) (JETRO, 2007). With a population of 128 million (growth rate 0.79 percent) it is also the second largest consumer market after the USA with a food retailtrading value in 2005 of $380.7 billion, forecast to reach $407 billion by 2010(Datamonitor, 2006a). In 2005 the average income per capita (PPP) was $30,615compared to $30,436 in the UK but with national income much more equallydistributed than in the UK. The unemployment rate in August 2007 was 3.8 per cent

    and annual inflation rate was2

    0.2 per cent (Statistics Bureau Ministry of InternalAffairs and Communications, 2007). Japanese consumers are sophisticated anddemanding in respect of technological innovation and service levels in the consumergoods industries.

    Despite the economic scale and high levels of development, the Japanese consumergoods marketplace has been beset by recession for much of the period since 1992, withhistorically high levels of unemployment seen in 2003-2004 and wage decline by over 5per cent during 1998-2003 (Reid, 2007). These pressures have resulted in Japan beingundeniably a difficult market to enter, although Reid notes the success of some largebrands during this time such as Coca-Cola (which generates 30 per cent of its globalprofits in Japan), IBM and to a lesser extent Proctor & Gamble and Unilever (Reid,2007).

    The food retail market in Japan, in common with many developed economies, hasbeen showing slow growth in the last five to ten years. Expenditure on food andnon-alcoholic beverages accounted for 14.5 per cent of total household expenditure in2004 (Euromonitor International, 2006). In 2005, the market was estimated to havegrown by 1.1 per cent, a decline in the growth rate from 1.9 per cent seen in 2004, but animprovement on declining growth before that (Datamonitor, 2006a). This iscomparable with poor levels of growth in food retail sales in the UK in 2005 at 0.9per cent (Datamonitor, 2006b). Notwithstanding the apparent economic stagnation,

    Japan has the highest value of retail sales per capita of all major economies(Euromonitor International, 2006).

    International retail comparisons

    The format and structure of food retailing in Japan differ greatly from the typicalmodels in the UK and Europe, and also from the US. In the UK the retail concentrationis very high and increasing: in 2006, the four largest grocery retailers accounted fornearly three-quarters of all grocery sales at supermarkets and convenience stores(Competition Commission, 2007a). The large-store or hypermarket format is common,with more than 70 per cent of grocery sales taking place in large supermarkets, 20 percent in convenience stores and the remainder in other outlets, including specialistgrocery stores. Bell (2000) noted the concentration of retail companies in other

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    European countries, such as the Nordic countries and the Netherlands, as well as asimilar popularity of the large retail store format in France, even though there arecountry specific differences in distribution systems (Cadilhon et al., 2003). Theminimum store size for the primary weekly one-stop shopping, which is the dominant

    consumer practice, is estimated at 1,400m2

    in the UK. A current trend is the increase inconvenience stores in the UK, catering for more frequent purchasing patterns for freshand chilled products, but this is attributable to format diversification by the dominantretail chains rather than growth in independent stores (Competition Commission,2007a); the same is true across Europe (Bordier, 2004). Evidence on the changingfrequency of shopping in the UK is equivocal (Competition Commission, 2007b). A shiftin supermarket formats is also evident among international retailers such as Wal-Martand Tesco in their home and overseas markets where strategies concerning optimalstore size and format diversification are leading to increasing competition (CompetitionCommission, 2007b; Financial Times, 2007), as well as strategies focusing on socialresponsibility and relationship marketing (Martinez, 2007).

    Thus, most advanced economies have concentrated food retail sectors withdominant chains and a large store format, but with increasing hints of formatdiversification by the dominant chains. Similar patterns of increasing retailconcentration have been noted in many developing and transition countries(Reardon et al., 2003; Dries et al., 2004; Hu et al., 2004; Neven and Reardon, 2004;Berdegue et al., 2005). Notwithstanding research that has qualified this trend in at leastsome food categories in some markets such as Vietnam (Cadilhon et al., 2006), thedevelopment of the Japanese food retail sector appears to be out of step with the muchof the rest of the world.

    Japanese retail formatsIn Japan the food retail market is not concentrated, firms are mainly domestic and are

    of smaller size than Western supermarkets (see Figure 1).Table I shows that the store format also is smaller than prevailing retailenvironments in Europe and the US and also there is less dominance by a smallnumber of large retailers.

    Figure 1.Retail food sales by storetype (%) 2005

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    SupermarketsIn addition, the nature of a supermarket in Japan differs from the Western model. In

    Japan a supermarket is a food store with an area of over 250m

    2

    . This is concept is closerto the UK convenience store format, defined as stores below 280sq.m (3,000sq. ft); andstores between 280 and 1,400m2 (15,000sq. ft), which provide for secondary ortop-up shopping (Competition Commission, 2007c). In Japan a large retailer has anarea of 1,000m2; a UK supermarket has a lower limit of 1,400m2 and a westernhypermarket could have 10,000-15,000m2. There is growth in the number of largerstore formats in Japan, but the greatest growth rate is in small stores with an area of500-1,000m2 (METI, 2005). Changes in food retailing are reflected in the wider retailsector as differentiation and diversity in format and location reduce but from ahighly fragmented baseline: New types of outlet, such as drugstores, clothingsupermarkets and convenience stores, are experiencing significant growth. On theother hand, the specialist and semi-specialist stores that make up around 90 per cent ofretailing as a whole are declining, and department stores and other supermarkets aredeclining considerably. The types of business and commercial districts that aregrowing are thus changing (METI, 2005, pp. 136-7). Therefore, store area is a keyfactor, potentially determining a number of differences in service levels, product range,location, travel needs and frequency of purchasing. Smaller supermarket formats aremore likely to:

    (1) Be sited within an urban area, whereas the large store format would need anout-of-town site.

    (2) Be restricted to food items, whereas the large store format is more likely todiversify into non-food sales.

    (3) Meet the needs of the regular shopper (daily or three to four times a week),whereas the large store format encourages less frequent visits.

    The prevalent small and diverse retail format in Japan is illustrated by the followingexamples of grocery supermarkets, which tend to be regionally based and offerdifferentiated market propositions:

    (1) Shop 99 has about 500 outlets mostly concentrated in the Tokyo area. It sellstinned goods, packaged and fresh foods besides other consumer goods, with a

    Store typeShare sales 2002

    (%) Company dominance

    Department stores 4.9

    General merchandise stores 9.7 Top 3 account for 60 per centTop 6 account for 81 per cent

    Supermarkets (.250m2) and traditional groceries 62.8 Top 10 account for 18 per centTop 61 account for 50 per cent

    Convenience stores 11.6 Top 2 account for 50 per centTop 6 account for 80 per cent

    Others 11.0

    Source: METI (2003)

    Table I.Market share by storetype for Japanese food

    retail

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    single price (99 yen), and operates 24-hour sales. It targets mainly singles, smallfamilies and busy city dwellers.

    (2) Harashin is a diversified group whose supermarket division has a chain of 42outlets offering perishables and general food items, located mainly in andaround the coastal city of Niigata. The store differentiates itself by providing avariety of services, such as a recipe service (linked with procurement andpromotion) and free in-store hot beverages.

    (3) Yamazawa has 55 outlets in Tohoku in North East Japan. This store has a longtradition of private branding goods, having backward integrated into tofu, milkand prepared meal production.

    Convenience storesThe second most important category of food retailer in Japan is the convenience store,accounting for 11.6 per cent of retail sales. Convenience stores are defined as foodstores whose area is between 50m2 and 250m2. The sector is more concentrated than

    the supermarkets. Seven-Eleven is the market leader accounting for 31.5 per cent oftotal sector sales, but from an outlet total of 11,837 stores with an average income perstore of $242,500 (Datamonitor, 2005). Kunitomo (1997) speculated that the reasons forSeven-Elevens market dominance in the convenience sector in Japan was a result of anumber of factors. These include: the proximity of stores to peoples homes orworkplaces; the high levels of cleanliness, friendly service, freshness control andfast-selling product lines; and the efficiency of the distribution system, whereby storesset up in clusters, gaining economies of scale in distribution while meeting theconvenience/local format for the consumer. According to Euromonitor (2006), it is theresponsiveness of the convenience store sector to evolving consumer preferences that isthe explanation for their recent strong performance.

    General merchandising storesIn addition to the smaller stores (supermarkets and convenience stores), nearly 10 percent of all foods are sold through general merchandising stores (GMSs). These areusually national chains, which are the equivalent to the UK/US department storemodel. The main GMS stores in Japan include Aeon; Ito-Yokado (parent company ofSeven-Eleven), Daiei and Seiyu. While the stores expanded rapidly during the 1980s,this was possibly the result of protectionism through the Large Scale Retail Store Law(LSRSL) of 1974, which has been significantly and progressively changed from theearly 1990s leading to heightened competition in the retail sector (Tsuchiya andRiethmuller, 1997; Odagiri and Riethmuller, 2000).

    Since the mid to late 1990s the GMSs have suffered from stagnant growth and

    financial crises. Dawson and Larke (2004) found that the GMSs strategy in the 1990swas just to expand floor space as they had in the 1980s, hoping the economic situationwould soon improve. This simplistic strategy through the long recession caused hugedebt and pushed the GMSs into serious financial crises. For example, in 2005 Seiyumade losses of Yen 17,774 billion before it became a subsidiary of Wal-Mart on 21December 2005 (Seiyu, 2006), after a loss of Yen 12,318 billion in 2004 and losses inprevious years also. Ito-Yokado has seen constant decline in its operating profit since1993 with flat sales since the mid 1990s (Datamonitor, 2005).

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    Attitudes and needs of the Japanese consumerWhile it is clear from the previous discussion is that there are palpable differencesbetween the retail structures in Japan and other OECD countries, a number of authorssuggest that differences in consumer attitudes and behaviour between the two markets

    may be the determinants of the success, or otherwise, of the large US and Europeansupermarkets in the Japanese food retailing market. Two broad theses have beenadvanced in the literature to explain the differences.

    Food product quality preferencesJonke and Takahashi (2002) highlighted the importance of food quality to the Japaneseconsumer, particularly in terms of domestic origin, freshness and health perception.Schmekel and Larke (2002) elaborated on these findings by noting that food qualityoften takes precedence over price. The Japanese Ministry of Agriculture has also notedsome significant differences between the European and Japanese consumer in terms ofattitudes to food purchase, showing the importance of food quality to the Japaneseconsumer compared to European and US counterparts (see Table II). There is an

    attraction to the Japanese consumer of promotions, although every-day (i.e. consistent)low prices are seen as less appealing (Schmekel and Larke, 2002).

    Sato (2004) outlined the features of Japanese shopping behaviour, noting theimportance of product freshness in addition to taste; he also highlighted thesignificance of promotions and small package size (see Figure 2). Satos model placesstrong preferences for particular product attributes as the driver of consumers choiceof store and therefore of forms of retail provision.

    Convenience: retail distribution store, and domestic storage preferencesThe second principal factor from the literature that, it is argued, defines consumptionpatterns, is convenience shopping. Flath and Nariu (1996) hypothesised that thestructure of the Japanese food retail sector was dominated by small local stores as aresult of the geography of consumption, particularly dense urbanisation: there is adependence on a complex but efficient public transport system related to low carownership; and a relative scarcity of living space making household storage limitedand costly. They suggest that the driving force for small purchases and frequentshopping is the limited ability of the consumer to buy, transport and store in bulk,rather than factors relating to consumer attitudes to product freshness, origin andquality. Sato (2004) elaborated on this by suggesting that the Japanese consumer shopsfrequently (even daily), as the cost to do so is low, facilitated by the high retail density.However, he suggested that as car use increases and there is greater movement to the

    Price considered very important (%) Quality considered very important (%)

    Germany 53 33The UK 59 23Italy 50 35France 57 37The USA 51 18Japan 49 64

    Source: The Japanese White Paper on Agriculture for 1996, quoted in Sato (2004), pp. 87-8)

    Table II.Importance of price and

    quality: internationalcomparisons

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    suburbs, shopping frequency would reduce. This presents the opportunity for thegrowth of large-scale grocery retail, suggested by Schmekel and Larke (2002) as being

    the latest stage in retail internationalisation in Japan.

    MethodologyIn order to assess the dynamics of the Japanese food purchasing, a consumer surveywas conducted among household principal food shoppers across various regions of

    Japan. The questionnaire was prepared and piloted by the UK-based research team andthe survey was administered electronically by NTT Resonant Inc. Respondents wereselected randomly from NTTs 200,000 registered consumers, while aiming to collect atleast 50 responses from each of five less populated regions in Japan (Hokkaido,Tohoku, Chugoku, Shikoku, Kyushu), and at least 100 responses from three denselypopulated regions (Kanto, Chubu, Kinki).

    Questionnaire structure and contentQuestions followed a logical sequence moving through a series of topics concerningpurchasing practices and preferences:

    . frequency and time of week of shopping for various foodstuffs;

    . types of outlets used;

    . the importance of store characteristics in the decision about where to shop;

    . the importance of product characteristics in purchase decisions; and

    Figure 2.Characteristics of Japaneseshopping behaviour

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    . the importance of seasonal, regional and national cultural preferences, freshness,shelf life, and provenance.

    Descriptive statistics and x2 analyses were applied to the largely categorical data to

    assess the extent to which the assertions made about the behaviour and attitudes ofJapanese food shoppers could be verified. The assertions tested concerned the conceptsof quality preferences and purchasing convenience:

    (1) Freshness, quality and other cultural preferences are of principalimportance to the product choice decisions of Japanese consumers.

    (2) Bargains are more important than low prices per se.

    (3) Urban density determines purchasing practices by:. constraining transport options to public mass transit systems, and therefore

    limiting the size of purchases; and. reducing domestic storage capacity, and therefore frequent shopping is

    preferred over one-stop weekly shopping.

    Sample socioeconomicsA total of 616 interviews were conducted during April 2006. The distribution ofrespondents by region, with data on population density and car ownership, is outlinedin Table III. The heterogeneity of regions suggested categorisation by populationdensity rather than region itself.

    Of the respondents, 72 per cent were female, and 28 per cent were male, and 34percent were single with the balance being married. The age distribution of the sampleis shown in Table IV, with a comparison at the national level. There was a purposivebias towards the younger female shoppers from the working population who will havea significant impact on future consumer behaviour patterns:

    Just over 25 per cent represented households with both spouses in employment, assummarised in Table V.

    Regarding the annual income category distribution of respondents, approximately40 per cent of respondents fell in the range 3-6 million ($30,000-60,000) annually. Thiscompares with national average individual (household) income in 2004 of yen 3.9million $39,000) (Japanese Bureau of Statistics, 2005). Regarding household size, the

    Population density of region (car ownership/householdby prefecture)

    Region Frequency Percent ,250/km2 251-1,000/km2 .1,000/km2

    Hokkaido 60 9.7 60 (0.88)Tohoku 58 9.4 29 (0.90-0.95) 29 (0.91)Kanto 110 17.9 9 (0.97) 101 (0.64-0.88)Chubu 110 17.9 27 (0.94-0.97) 33 (0.95-0.96) 50 (0.94)Kinki 113 18.3 2 (0.94) 58 (0.90-0.94) 53 (0.73)Chugoku 53 8.6 15 (0.90-0.93) 38 (0.88-0.94)Shikoku 60 9.7 25 (0.93-0.95) 35 (0.90-0.93)Kyushu 52 8.4 27 (0.93-0.95) 7 (0.87-0.95) 18 (0.87)Total 616 100.0 185 209 222

    Table III.Sample data, population

    density and carownership

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    mean was 2.04 (sd 1.503) compared with the national average of 2.55 in 2005(Statistics Bureau Ministry of Internal Affairs and Communications, 2007). Of therespondents 17 per cent lived alone, 23 per cent in two person households, 20.5 per centin three person households. Of the respondents 53 per cent were homeowners, with the

    rest in rented or other accommodation. The majority (89.8 per cent) had a valid vehicledriving licence although only 42 per cent of households actually owned one (or more)vehicles. This figure is slightly lower than the national data, of 435 passenger cars per1,000 of the population in 2003 (Euromonitor International, 2004), an increase of almost6 per cent since 2000.

    Results and discussionThe results of the survey are presented in two formats. Initially we present descriptivestatistics of the main findings. This is followed by the results of cross-tabulationanalyses and x2 tests to assess whether there are significant associations in the sample.The results are also compared against existing research findings in the UK market to

    explore differences between the Japanese food customer and their British counterparts.

    Data descriptionsShopping frequencyFigure 3 shows the frequency of food shopping by the sample. For fresh and perishableproduce the shopping takes place frequently, with 52.8 per cent of respondentsshopping for fresh food (e.g. fruit, vegetables, fish, meat and milk) several times a weekat least, and 42.8 per cent of respondents doing likewise for perishable processed foods

    Employment categories Number (%)

    Clerical/technical/manual 185 30.0Full-time homemaker 182 29.6Senior management/professional 73 11.9Self-employed 66 10.7Part-time homemaker with other employment 46 7.5Student/other not in employment 58 9.4Other 6 ,1.0

    Table V.Employment categoriesof sample

    Age Census (%) 2004 Sample total (%)

    ,19 19 120-29 13 2430-39 14.5 4440-49 12.5 2250-59 15 7.60 26 2

    Source: Sample data and Census data from Statistics Bureau Ministry of Internal Affairs andCommunications (2007)

    Table IV.Respondent agecategories compared withcensus data

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    (e.g. butter, cheese, tofu, natto, bread, ham or chilled food). In addition, 56.2 per cent ofrespondents shop for food on both weekdays and weekends. While the frequency ofshopping events is lower for other processed foods (e.g. bottled, canned, dried food) andprepared hot meals, frequency of purchase is still higher than consumers in the UK,where (as noted earlier) 84 per cent of the population shop for food goods once a weekor less.

    Store choiceFigure 4 presents the survey results relating to where consumers shop for differentfood products. It is evident that the dominant retail format is the grocery supermarket(over 250m2 in area), particularly for fresh and perishable processed foods. Largersupermarkets and the department store format closer in scale to the Westernsupermarket model tend to be used less than 20 per cent of the time, regardless offood products purchased. In addition, it is notable that:

    .

    non-perishable items are more frequently purchased in a range of retail formats,including speciality stores and discount stores;

    Figure 3.Food shopping frequency

    by food type

    Figure 4.Type of outlet most

    frequently used for eachfood category

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    . speciality stores attract a relatively large amount of snack and confectionerybusiness, as well as some purchasers of alcoholic drinks and rice;

    . convenience stores tend to attract purchasers of hot ready to eat meals;

    .

    discount stores are the dominant format for the purchase of alcoholic drinks only;and. rice the dominant staple of particular cultural significance is obtained from

    the widest range of sources: 26 per cent of respondents cited other sourcesincluding direct from rural sources of production.

    Comparing this with the trend in the UK market highlights some important differences.In the UK one-stop shopping is prevalent, with 80 per cent of customers groceryshopping in a single store (one-stop shopping), and that 85.3 per cent of all groceryspend takes place in a UK supermarket (defined as over 600m2 in area) that is to say,the large store format (Competition Commission, 2000). Clearly, the Japanese consumernot only shops more frequently, especially for fresh food, but also uses a wider range of

    store formats, with the store format chosen dependent on the type of food purchased.

    Factors affecting store choiceFigure 5 highlights the factors that are important to the Japanese food shopper whendeciding the store to visit. The most important factors mentioned were:

    Figure 5.Importance of variousfactors in store choice

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    . low prices (45 per cent considered this extremely important);

    . proximity to home (34 per cent);

    . easy access by car 34 per cent); and

    .

    wide assortment of products (34 per cent).In contrast, for the UK consumer (Competition Commission, 2000) the following werethe most important attributes when choosing a food retailer:

    . 43 per cent considered the ability to one-stop shop was their main factor;

    . 18 per cent selected easy and convenient reach of home as most important;

    . 16 per cent selected low prices; and

    . 6 per cent selected range of goods.

    In addition, research by IGD showed that the three main reasons for the UK shopper toselect a store were:

    (1) Familiarity with the store layout (47 per cent).(2) Happy with prices (21 per cent).

    (3) Ease of access (10 per cent) (IGD, 2004, p. 68).

    This illustrates that there is a contrast between the Japanese market and the UK one whenconsidering driving forces for grocery shopping. While prices are somewhat important toboth, they seem more important to the Japanese when selecting a store. Conversely, thedesire to one-stop shop, while of primary importance to the British shopper, isconsidered extremely important by only 20 per cent of the Japanese sample. Both marketsseem to look to ease of access and proximity to home as important factors, but withproximity being of greater interest to the Japanese. It is curious also that more than 90 percent of Japanese consumers rate wide product range as important or extremely important,

    yet also purchase different foods from a wide range of store types, as noted previously.This may reflect the importance of range of choice within a particular category ratherthan a wide range of food categories necessary for one-stop shopping.

    Factors affecting product choiceThe analysis next considered which were the most important product attributes for the

    Japanese consumer when purchasing fresh foods. The results are shown in Figure 6.The three most important attributes are intrinsic eating quality attributes:

    freshness, food safety and hygiene and taste. The relatively low importance of priceseems to contrast with its priority when selecting a store, and may reflect the value forthe Japanese consumer of quality and freshness within fresh food categories. It isnoteworthy that production attributes such as origin, environmental and welfare

    issues are of lesser importance, as too are extrinsic attributes such as brand andpackaging.

    While no direct comparison was available for the UK consumer, the followingobservations can be made:

    (1) Quality is seen as a key factor influencing purchase decisions, and the termrelates to a number of product attributes, including taste, appearance, smell,texture and ingredients. However, these attributes needed to be balanced withreasonable price.

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    (2) The concept of freshness appeared to differ compared to the Japanese market.Whereas in Japan, freshness is an attribute that indicates how long since theproduct was harvested/slaughtered, in the UK freshness seemed to beindicated by length of time until the sell-by date i.e. the remaining shelf-life

    of the product.

    The primacy of eating quality over price supports the differences noted in Table II.

    Inferential data analysisA series of x2 analyses were conducted to assess whether there were significantdifferences within the sample, specifically whether demographics factors (such asgender, age, household size) significantly affected food purchase factors, relating to:

    . frequency of purchase;

    . importance of in-store characteristics;

    . nutritional attributes of importance;

    .

    product positioning factors;. social product attributes (e.g. environment, animal welfare); and. shopping logistics.

    The results are presented in Table VI.

    GenderCertain characteristics of the sample are consistent with gender roles, behaviour andemployment patterns in most countries. Gender differences are significant in respect offrequency of shopping and the importance of in-store characteristics, and some productnutritional attributes. There were also gender differences in the importance of productorigin, although this attribute was of little overall importance (see Figure 6):

    . females shopped more often for fresh foods than men;

    . men shopped more frequently for ready meals;

    . women cared more about the shopping environment, retail services available,bargain offers, one-stop shopping and loyalty programmes;

    . long opening hours were significantly more important to men;

    . freshness, taste, food safety and hygiene plus nutrition and function aresignificantly more important product choice factors for women; and

    . there were no gender differences in social or logistical considerations.

    Age

    There were limited effects overall of age, with the exception of shopping frequency,which showed that younger respondents (under 34 years) were less likely to shopfrequently for fresh and perishable processed foodstuffs than older people.

    Marital statusMarital status also affected frequency of purchase, with single people shopping lessfrequently for food and perishable processed food, and more frequently for preparedready hot meals, compared to their married counterparts. In addition, long opening

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    Gender

    AgeM

    aritalstatus

    Income

    Householdsize

    Typeofhouse

    Carownership

    Populationdensity

    Frequency

    Frequencyofpurchase/rea

    dymeals

    *

    NS

    ***

    NS

    NS

    *

    NS

    NS

    Frequencyofpurchase/freshfoods

    ***

    ***

    ***

    NS

    ***

    ***

    NS

    NS

    Frequencyofpurchase/pro

    cessedperishables

    NS

    **

    ***

    NS

    ***

    *

    NS

    NS

    In-storecharacteristics

    Productrange

    **

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Shoppingenvironment

    ***

    *

    NS

    NS

    NS

    NS

    NS

    NS

    Retailservice

    ***

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Amusements

    **

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    One-stopshopping

    **

    NS

    NS

    NS

    NS

    ***

    NS

    NS

    Bargainoffers

    **

    NS

    NS

    NS

    NS

    NS

    N*

    NS

    Loyalty

    **

    *

    NS

    NS

    NS

    NS

    *

    NS

    Longopeninghours

    ***

    NS

    ***

    NS

    ***

    NS

    NS

    NS

    Nutritionalattributes

    Productquality

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Freshness

    ***

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Taste

    **

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Appearance

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Foodsafetyandhygiene

    ***

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Nutritionandfunction

    ***

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Productpositioning

    Price

    NS

    NS

    NS

    ***

    NS

    NS

    NS

    NS

    Packaging

    NS

    **

    NS

    NS

    NS

    NS

    NS

    NS

    Countryoforigin

    *

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Regionoforigin

    *

    NS

    *

    NS

    NS

    NS

    NS

    NS

    Brand

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Seasonality

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Social

    Traditionalororganic

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Environmentalbenefits

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Animalwelfare

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    NS

    Logistics

    Proximitytopublictransp

    ort

    NS

    NS

    ***

    NS

    ***

    ***

    ***

    **

    Easyaccessbycar

    NS

    NS

    ***

    NS

    ***

    ***

    ***

    ***

    Proximitytoworkplace

    NS

    NS

    ***

    NS

    NS

    NS

    NS

    NS

    Proximitytohome

    NS

    NS

    ***

    NS

    NS

    **

    NS

    NS

    Table VICross-tabulations o

    demographic factors anfood-purchasin

    behaviou

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    hours, and proximity to home, to the workplace and to public transport weresignificantly more important to singles, although the ease of access by car was moreimportant to married respondents.

    IncomeLower income respondents were significantly more price-sensitive anuncontroversial result within the context of an overriding preference for qualityahead of price. There was no other income effect on other food purchase factors.

    Household typeHousehold size and household type affected purchase frequency and logistical factors.Generally, larger households and those living in detached houses shopped morefrequently for fresh and perishable foods than smaller households. Where largerhouses are expected to have more storage space, this result appears counterintuitive.However, it illustrates the primacy of freshness and quality over domestic storagefacilities as a determinant of purchasing frequency.

    Figure 6.Importance of variousattributes when

    purchasing fresh food

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    LogisticsProximity to public transport was more important to smaller households, as well asthose living in apartments, whereas larger households and/or detached householdslooked to ease of access by car. This is also uncontroversial, as car ownership was

    positively associated with detached housing (p , 0:

    05), and with household size,although in the latter case the difference was not significant. In terms of populationdensity, proximity to public transport was significantly more important for people inmore densely populated prefectures, and ease of access by car was more important forpeople who lived in less densely populated prefectures.

    Defining consumer preferences and purchasing patternsThe descriptive and inferential statistics, although only exploratory, have providedmuch detail on the characteristics of shopping behaviour for the Japanese consumer,both in terms of product and store choice, as well as other shopping behaviours. Thedata provided previously are now used to discuss the hypotheses outlined earlier.

    Food product quality preferencesThe working hypothesis was that freshness, quality and other cultural preferencesare of principal importance to the product choice decisions of Japanese consumers. Theresults show that intrinsic food quality attributes are highly important: freshness,safety, hygiene and flavour; price is of lesser importance in product choice but is themost important factor in store choice; extrinsic factors such as geographicalprovenance, branding and packaging, social and welfare attributes connected to foodproduction systems are of least importance to the Japanese consumer. Rice purchasingseems to be unique, but quality driven, probably because of its cultural significance.Packaged goods and alcoholic drinks, quality of which is likely to be morehomogeneous and controlled than in fresh foodstuffs, are sourced by consumers in

    what could be termed a less discriminating manner.It can be inferred that concepts of freshness and the consequent product and

    purchasing preferences can be related to the different approaches to freshness inEuropean bread markets: the Japanese concept of freshness seems to be closelyrelated to that of French consumers whose practice is to buy fresh baguettes, bakeddaily in the early morning. This concept of freshness differs from that valued bymany British consumers who tend to make infrequent purchases of a type of loaf thatwill stay fresh either packaged or, for example, stored in a freezer, i.e. have a longshelf life.

    Convenience: retail distribution and domestic storage/store and storage preferencesAgain, the working hypothesis was related to the geography of consumption both in

    respect of store and housing type and location: does urban density determinepurchasing practices by constraining transport options to public mass transit systems,limiting the size of purchases and reducing domestic storage capacity?

    A marked difference in store preference exists between Japanese and most westernconsumers: large supermarkets are the most frequently-used outlet type for purchasingany single category of foodstuffs by no more than 20 per cent of consumers. Comparedwith large western-style supermarkets, small stores are much preferred. Also, thewillingness of consumers to make frequent purchases from a wide range of store types

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    and in the case of rice, from beyond normal marketing channels is a distinctfeature of buying behaviour.

    Factors such as house and household type and size did affect the frequency ofshopping, but frequency of shopping was unrelated to factors defining the geography

    of consumption, such as car ownership and population density. There was nodifference between the two groups of car owners and non-car owners in the frequencyof shopping trips for different food categories. This suggests that one means oftransport simply substitutes for another, and car ownership does not affect the patternof purchasing, nor stimulate a move towards one-stop shopping.

    Thus it seems that the purchasing preferences are not related to the geography ofconsumption and that convenience is distinct from the western preference forconvenient one-stop shopping, more akin to small and frequent top-up shopping atstores with long opening hours that can be easily accessed by whatever transport isavailable, be it car or public transport.

    Summary and conclusionA summary of the attributes tested, evidence found and results of the research areprovided in Table VII.

    The results of the research show there are some clear difference (as expected)between the Japanese food consumer and their UK/EU counterparts. Conveniencematters, but means something different to Japanese consumers. Compared with theprevailing one-stop shopping habit of many western consumers, shoppingpreferences include:

    . more frequent food shopping;

    . more varied outlets used;

    . the importance of proximity and transport factors; and

    . the importance of freshness, quality and safety as critical attributes in fresh foodpurchase.

    What has become clear from this investigation is that high frequency of purchase doesnot relate either to small/high density housing (i.e. the lack of storage space asidentified by Flath and Nariu (1996) or lack of car ownership). It does suggest thatfreshness matters: perishable food shopping is dictated by freshness, safety and taste,with the need for freshness dictating the high frequency shopping and from this the desire for ease of access (whether by car or public transport). This therefore leads tosmaller stores (compared to the western retail model) providing a small geographic, butrelatively high-density, retail hinterland. This suggests that the literature to date on theimportance of quality attributes is the most likely factor affecting Japanese food

    shopping habits, although the convenience factors are important, albeit for frequentpurchase of fresh food rather than for logistical reasons. Convenience also matters butin Japan it signifies a preference for top-up over one-stop weekly shopping.

    The results support an argument that the large store one-stop shoppingsupermarket format popular in the UK/EU is not and will not be the preferred form in

    Japan, regardless of suburban development and higher car ownership. Supermarketchains would be better placed in opening a larger number of smaller stores, andconcentrating on frequently delivered and high quality products, above all in the fresh

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    Association

    Evidence

    Result

    Freshnessisofprincipal

    importanceand

    freshnessimpliesmorefrequentshopping

    Freshnessw

    asfoundtobethemostimportant

    attributein

    buyingfreshfood(Figure6)

    Clearlyfreshnessistheprincipalfac

    torinfresh

    foodshopping,whichtheJapaneseconsumersees

    asimportantanddistinctfromotherfood

    shopping,unliketheirUKcounterpa

    rts

    Over50per

    centofthepopulationshopforfresh

    foodmorethanthreetimesaweek(seeFigure3),

    incontrastwithone-stopshoppingintheUK

    TheJapaneseconsumerdoesnotembraceone

    stopshoppingbutuses

    diverseretailformats

    Grocerysup

    ermarketsarethemostpopular

    choiceforperishableproductsbutotherretail

    formatsare

    usedfornon-perishablessuchasrice,

    alcoholicdrinksandsnacks(seeFigure4)

    ClearevidencethattheJapaneseuse

    differing

    retailformatsfordifferentfoodsand

    thisdiffers

    fromtheUKone-stopshoppingform

    at

    TheJapaneseconsumers

    buyingbehaviourisnot

    price-elasticinproductchoice

    Evidencepr

    ovidedinFigures5and6suggests

    that,asfarasstorechoiceisconcerned,priceis

    thedominan

    tfactor,closelyfollowedby

    proximitytohome,andeasyaccess,butisaless

    importantfa

    ctorinproductchoice(forfreshfood)

    withattribu

    tesoffreshness,hygieneandtaste

    beingmore

    important

    Clearlypricemattersinstorechoice

    forall

    products,butisalesserfactorforfr

    eshfood

    products

    Theonlyde

    mographicfactorofimportancefor

    pricewaslo

    wincome,aswouldbeexpected

    Itisnotclearwhetherthisisadistinctive

    JapanesecharacteristicoriftheEuropeanmodel

    wouldshowthesame

    Thereisapositiveassociationbetweenfrequency

    ofpurchaseandpopulationdensity

    Respondentslivingindetachedhousing(assume

    lowerdensity)showmorefrequentpurchase

    patternstha

    napartmentdwellers.

    Larger

    households

    alsoshowmorefrequentpurchasing

    patterns

    Populationdensitydoesnotdictateshopping

    frequencyperse,

    buthouseholdsize

    and

    householdtypedo

    Thereisanegativeassoc

    iationbetween

    frequencyofpurchasean

    dcarownership

    Theinferentialstatisticsshowthatthereisno

    correlationb

    etweenfrequencyandcarownership.

    However,ac

    cessbycarismoreimportantto

    detachedho

    usedwellerswhoalsoshopmore

    frequently

    ThisfindingcontradictsSato(2004)a

    sitsuggests

    thatincreasedcarownershipdoesnotreducethe

    frequencyofshoppingandisunlikelytoaffect

    storechoice

    TheJapaneseconsumersdesireforfreshproduce

    isdrivenbypreferenceforlocalorregional

    produce

    Noevidence

    ofimportanceofthistotheJapanese

    consumer

    Evidencesuggeststhatlocal/regiona

    lproduceis

    notanexplicitdriverofthefreshnes

    sattribute

    perse

    Table VII.Summary of data

    findings against researchquestions

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    foods categories. This appears to be the strategy of Tesco in Japan, rather than thehypermarket format by Carrefour and Wal-Mart.

    Also, the growing phenomenon of the small convenience store format in marketssuch as the UK (Competition Commission, 2007b) and California (Financial Times,

    2007) suggests that western consumers desires for convenience are becoming morelike those of Japanese consumers[1].

    Note

    1. At the time of the research $1 approximately 100.

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    Corresponding authorJanet Haddock-Fraser can be contacted at: [email protected]

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