TOKYO — Japanese home goods chain Muji and major convenience store chain operator Lawson will form a sales and brand development partnership, the Nikkei has learned, as consumer behavior in the country changes due to the coronavirus pandemic and demographic trends.
The alliance will allow Lawson to put Muji’s household products in some of its stores and also see them collaborate on the development of new private brand products covering everyday items.
The pandemic has prompted a shift in consumer trends with more people purchasing basic necessities in bulk at nearby convenience stores.
Also, given Japan’s population decline convenience store chains can no longer expect to grow through mass store openings. Lawson’s decision to seek a partner and expand product lines could elicit similar moves from other major operators.
Starting on Wednesday, Lawson will start selling Muji products at three of its directly managed, or non-franchised, stores in Tokyo. Those establishments will have dedicated shelves to display the goods that include cosmetics, stationary and underwear.
Lawson handles about 3,500 products in each of its stores. A little under 20% of those at most, or around 500, will be replaced with Muji products.
The convenience store will monitor customer trends at its other stores — which number approximately 15,000 nationwide — and consider whether to expand the Muji offerings.
The two companies also aim to jointly develop their own private brand goods based on data and analysis of sales at the Lawson stores.
Some candidates for the private brand are eco-friendly detergents and nutritional pre-packaged foods, both of which have seen a surge in demand since the COVID-19 outbreak. Sales have increased between 1.5 to 2 times for such products. In the long term, the partnership will also consider establishing a dedicated store for its private brand products.
Muji, originally founded in 1980 as a private label for the Seiyu Japanese supermarket chain, has grown to over 400 domestic outlets. Operator Ryohin Keikaku had supplied Muji products to FamilyMart, another major Japanese convenience chain, but ended its contract in January 2019. But the company continued to look for a way to expand its sales channels and decided to collaborate with Lawson, which also wanted to bolster its product lineup.
The coronavirus has led to an increase in homebound consumers, which in turn created an upsurge in purchases of groceries and other daily necessities at convenience stores, especially in urban residential areas.
According to the Japan Franchise Association, total store sales for seven major convenience store operators in April fell 10.6% to 778 billion yen ($7.2 billion) compared to a year ago. The number of customers also dropped 18.4%.
But due to the surge in bulk buying, the average spending per customer rose 9.5%.
Mass store openings over the years have brought number of convenience stores in Japan to a total of around 58,000. Growth, however, has reached a ceiling due to over saturation and population decline.
Major operators are therefore scrambling to increase customer attraction to their stores amid the coronavirus.
On Tuesday, Seven-Eleven Japan, the country’s biggest chain store operator, began selling life insurance at its outlets after partnering with insurance company MS & AD Insurance Group Holdings.
FamilyMart has also strengthened efforts to sell vegetables and fruit in office districts.