Scott Annan outside Cirkle K Sunkus in Tokyo
In the first part of his East-West convenience store tour, srcg director Scott Annan travels east to Turkey and Japan.
I was fortunate in November to circle the world and visit retailers in some of our iconic cities.
It is good to validate statements of best practice and to see if retailers and markets sit within reputations.
The big messages are the UK and Ireland still lead in convenience innovation, shoppers have tightened their belts everywhere and many retailers are developing new offers while postponing investments to conserve cash.
My first stop was Istanbul where big international brands and traditional markets vie for 15 million consumers.
Food retailing is ubiquitous with open-air markets and speciality shops in many neighbourhoods selling seasonal produce, fish and meats alongside supermarkets, discounters and department stores.
Migros Turk is the leading food supermarket and, along with Carrefour and Tansas, have increasingly busy discount fascias.
BP, Shell and other petrol majors are in Turkey too; their stores are very ‘Life on Mars’, full of packaged impulse products, oil and, I had to rub my eyes here, furry toys.
The fuel is fully served and the networks are dealer owned and operated, which may explain why the shops are not as evolved as the supermarkets and shopping malls.
My host was the market leader Petrol Ofisi who is keen to bring a quality food offer to its stores at the Marks & Spencer, Spar and Musgrave end of convenience retailing.
Caffè Nero has recently entered Turkey and has eight stores in busy street and mall locations.
I enjoyed an excellent espresso in the Nero in ‘beautiful Beyoglu’, one of a few coffees in an English menu board dominated by tea. Starbucks looked dark and dated by comparison.
Tokyo was the second stop and it delivers on its reputation as the most exciting retail city in the world.
Greater Tokyo has England’s population within an area the equivalent of the M25 and there appear to be convenience stores and vending machines on every corner.
Twelve c-store chains sell similar products and the big four – 7-Eleven, Family Mart, Circle K Sunkus and Lawson – have dedicated food factories and day-part distribution.
Cirkle K: leading the way
Circle K Sunkus leads the way in fast food innovation with its rubetta meal and Cherie Dolce dessert brands.
Top: Cirkle K Sunkus rubetta meals and below, Cherie Dolce desserts
European-style dinners are a big growth sector in supermarkets and department stores and Circle K Sunkus is first to market with ‘high quality taste at a reasonable price’.
It is now putting ‘food first’ rather than traditional convenience store elements and the category is growing at +30%.
An unintended consequence of new tobacco legislation in Japan is increased cigarette sales in convenience: +50% in Family Mart.
To date, only 31% of smokers have registered for the electronic ‘tobacco passport’ or Taspo required for purchasing cigarettes from a vending machine.
Family Mart: benefiting from tobacco legislation and ancilliary sales
As a consequence, Family Mart is enjoying 10% growth in related basket sales, particularly canned coffee and milk products. It is also trialing stores in railway stations in a joint venture with Sobu Department Stores.
In part two, I will be visiting recent convenience store developments in Kuala Lumpur, Taipei and Hong Kong and will explore changes at Whole Foods Market and Fresh & Easy in California.