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Thursday, April 13, 2006

Convenience stores outshined stale supermarkets in 2005


Staff writer

Japan's major convenience stores on Wednesday posted rosy figures for the 2005 business year, while supermarket chains lagged despite signs that personal consumption is recovering.

Lawson Inc. posted a net profit of 22.03 billion yen in the year to February, up 7.8 percent from a year ago, on sales of 268.06 billion yen. Lawson posted the record highs for business profit, pretax profit and net profit for the period between March 2005 and February 2006.

The Tokyo-based firm said its new chain, Natural Lawson, aimed at women, and Lawson Store 100, which sells perishable foods such as fish and vegetables, helped lure customers who normally shun convenience stores.

Seven & I Holdings Co., the holding company formed Sept. 1 for Seven-Eleven Japan, supermarket Ito-Yokado and restaurant chain Denny's Japan Co., posted a pretax profit of 248.11 billion yen on sales of 3.90 trillion yen in the 2006 business year.

Earnings for its convenience-store business came to 2.02 trillion yen, up 11.6 percent from the previous year, while its supermarket business raked in 1.69 trillion yen, up 2.8 percent from the year before.

Since Seven & I Holdings was formed in September, the figures from the previous year are from Ito-Yokado.

"Young people are usually the main convenience store customers, but more older people are visiting the stores as well," said Seven & I Holdings President Noritoshi Murata.

"We need to develop popular Japanese dishes offered in small packages" for the older customers.

On Tuesday, FamilyMart Co. posted a net profit of 14.20 billion yen, up 12.5 percent from the year before, on sales of 276.44 billion yen for the year ending in 2006.

The firm forecasted a net profit of 16.10 billion yen on sales of 307.50 billion yen in the current business year to next February.

Struggling supermarket chain Daiei Inc., which includes credit card and real estate businesses, perked up with a group net profit of 413.16 billion yen, reversing a net loss of 511.20 billion yen the previous year.

On a parent-only basis, however, Daiei posted a pretax loss of 2.96 billion yen, down from a pretax profit of 5.33 billion yen the year before.

"The year 2005 was (Daiei's effort) to regenerate from a negative momentum," Daiei President Yasuyuki Higuchi told a news conference. "We are heading in the right direction. It is my responsibility to take necessary measures to catch up with other companies within a year."

Daiei is struggling to rebuild itself with the help of the state-backed Industrial Revitalization Corp. of Japan and has been selling off nonessential operations. Maruetsu Co., part of the Daiei group, has been suffering even more.



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