Special Features
Highlighting on Co-op Nagano store business
Coop Nagano Azumino-Toyoshina Store
Theme:
Challenges to build a community-based store, correlating to
the colorful diet culture in the region
Diagnostic features of the store
Revising strategies to fill the gap between local needs and store assortment
As Shinshu area (Nagano prefecture) has cold climate and narrow flatlands, people in the
area have been cultivating wheat and buckwheat, instead of rice for many years. For this
reason a culture of eating floury-foods, including hand-kneaded noodles and 'oyaki', has
become popular. Oyaki is a local cuisine of Nagano, which is baked or steamed buns with red
beans, vegetables or pickles wrapped with rolled-out flour dough. The inhabitants in the
district have loved the traditional food in Shinshu since early times.
Nagano prefecture consist of four areas; Hokushin, Toushin, Chushin, and Nanshin. Each
area has different colorful diet culture. Coop Nagano's Azumino-Toyoshina store is in the
Chusin area, near Matsumoto-city.
In 2005, Coop Nagano joined Coop Net Federation (a federation of co-ops’ in in the Tokyo
metropolis). After Co-op Nagano had joined Co-op Net a new store with the format NSC
(neighborhood shopping center) with an area of 19,800 m2 was developed at an old factory
site in Azumino-city and was opened in April 12 2007. The NSC is housing Coop Nagano SSM,
a drug store, a 100-yen shop, casual clothing shop, restaurant (coffee shop), cleaner and
in-store bakery. This is the fourth Coop store in Nagano.
Outline of Azumino-Toyoshina store
Address: 2637-4 Toyoshina Azumino-shi
Telephone: 0263-71-4400
Opening date: April 10, 2007
Floor space: approximately 1,830 square meters
Parking lot: 270
Business hours: 9:30 am - 10:00 pm
Number of employees: 8 full-timers : 84 part-timers
Main rival stores:
Delicia Toyoshina store (SM, 1,135 square meters, 1.3 km away)
Saty Toyoshina store (Dpt, 1,970 square meters, 1.8 km away)
Seiyu Toyoshina store (NSC, 1,432 square meters, 2.8 km away)
Beisia Horigane store (NSC 3,079 square meters, 4.3 km away)
Internal Display
*NSC--neighborhood shopping center, meaning a shopping center with 10 to 30 tenants,
sales area is between 1,500 and 3,000 m2, with about 280 parking space, and regional
market population of 35,000. Half of the Japanese shopping center (SC) is NSC. There
also are CSC (community shopping center) with more than 70,000 market population,
RSC (regional shopping center) with more than 300,000, and SRSC (super regional
shopping center) with more than 500,000 respectively.
From the very beginning, Azumino-Toyoshina store did not attract enough customers as it
had been anticipated. Some of the reasons were inability to provide enough assortments that
were necessary in the region. Besides that the display of commodities wasn’t the best.
The gap between the store assortment and the local member's needs originated from Coop's
incomplete understanding of Nagano's provincial diet culture, which varies depending on the
district. And it resulted in supplying assortments that didn’t satisfy the requirements of the
regional people.
A later investigation discovered that many of the regional residents have their own
persistence for ingredients. For example, one always wants to buy a special brand of sake or
sake-kasu
(settling)
made
by
a
certain
brewer.
In
addition,
the
area
where
Azumino-Toyoshina store is located has even a different diet culture from the city of
Matsumoto that was only some few kilometers away. In the area, people has a peculiar diet
culture, including eating 'tempura manju' (fried bun) during the bon festival, and herring roe,
dried calamari and Matsumae-zuke (pickled seafood) in the year-end and New-Year holidays.
Prompt response to meet the regional needs
Two months later, Coop adopted a major policy change, by which Coop Nagano was allowed
to make some additional product ordering on its own. To fill the gap between the local needs
and actual store assortment became a major assignment for Coop Nagano. Coop Nagano
promptly promoted several improvements, including revision of selling price for the whole
products provided in the store, and with the introduction of some new products in response
to the regional demand. At the same time, the construction of a new bridge between
Matsumoto had been completed. Along with these store improvements, the completion of
the bridge resulted in an increase in the number of customers.
The projected turnover of Azumino-Toyoshina store is 1.5 billion JPY, but the actual
achievement as at November 2007 was 1.3 billion JPY. The figures indicate that the store has
still not reached the projected budget however; it is striving hard to reduce the gap between
local needs and actual store assortment to be able to achieve its required budget. It is good
to mention that, their strategic revision was prompt. It is believed that it may take three
years to complete the change of products on store shelves and make members start using
the newly introduced products. The most important issue is to be able to build a
community-based store where members in that community would be satisfied and enjoy
their shopping.
The present situation of SSM in the entire nation shows that the market population per one
SSM is less than 13,000. At the same time, a data indicates that a new opening of NSC in the
suburb area can expect 80 to 90 thousand market populations. Generally SSM is a type of an
independent store and has some limitations. To be able to stand the present day competition,
NSC is one of the best formats. For this reason the Azumino-Toyoshina store can be said to be
strategically positioned since it is located in an NSC.
With reference to table 1 (new SC openings in Japan), the number of new openings is
increasing year by year, especially in suburbs.
Table 1
New SC openings in Japan
Open year
Downtown
Urban
Suburb
(center of a city)
(surrounding
(suburb area)
Total
area)
Before 1969
80
37
14
131
1970-79
209
131
162
502
1980-89
181
160
285
626
1990-99
166
220
621
1007
2000
14
29
106
149
2001
9
7
21
37
2002
12
12
31
55
2003
9
9
32
50
2004
11
7
44
62
2005
6
7
48
61
2006
15
10
54
79
Opening minus
712
629
1,418
2,759
closing
Research by Japan Council of Shopping Centers
In addition, the current situation of York Benimaru, a retailer operating 131 stores in Tohoku
and Kita-Kanto area, reflects that the company opens new stores in NSC format almost every
year (see table 2).
Table 2: York Bnimaru's new store opening in SC
1998
The first opening in the SC in Mega Stage Shirakawa
1999
Yokozuka store, with a apparel store
2000
NSC Yatsuyamada store
2002
Shibata store with an emphasis on food products
2003
NSC Yamada Kagitori store, Motomiya Inter store
2004
NSC Kahoku store
2005
NSC Bandou store, Rifu Nonaka store
2006
NSC Ichinazaka store
2007
NSC Nasushiobara store
Read what the staffs say:
Yamamuro Hiroaki, chief of the delica section
'We are making effort to make attractive sales floor providing advanced
information to customers, offering season foodstuffs and making new
proposals. The width of shelves in our section is approximately 20
meters long. To fill up the broad space with products is a tough task,
however, our eighteen staffs consisting of full-timers and part-timers
are trying their best.
Hirabayashi Megumi, leader of the delica section
The most hot-selling product is yakitori (grilled chicken). In this region,
unlike other part of Japan, salty taste yakitori is uniquely preferred.
Fried-on-hot-plate foods including okonomiyaki (Japanese pancake with
vegetables and seafood) and takoyaki (octopus dumpling) are also
marketable. Many of senior customers prefer them served without
mayonnaise.'
Maeda Etsuko, in charge of seafood section
'I am paying the most careful attention in arrangement of sashimi. As
the family unit of this area is comparatively larger, filleted fishes for
boiled-cooking have better sales than fishes for baked-cooking. Trout
and salmon have good demand, too.'
Kuroishi Akiko, leader of the seafood section
'My work mainly consists of filleting fishes. I always commit myself to
cut clear sashimi. Unlike my previous workplace Murai store, customers
of this store prefer higher priced sashimi, instead of lower priced ones.'
Kinoshita Yuichi, chief of the seafood section
'We are proud of our fresh fishes delivered from the Sea of Japan four
times in a week. We are challenging to make our store the most
excellent one in the region. Though mountains surround this area,
people prefer to eat sashimi. Tuna is the most favorite.'
Yoshizawa Daisuke, in charge of business affairs for the seafood
'I am managing wide-ranged business affairs, from products buying to
their hygienic control. In the future, I will design the most effective
buying method for fishery products, to match to the delivery lot
allowing buying and dealing in a large-amount.'
Further challenges worth to tackle
Embodiment of the regional diet culture will open a way to have an ideal
assortment
The current assignment of Coop Nagano is to fill a gap between local needs and the actual
store assortment. For the reason, the store assortment should reflect the regional demand of
commodities necessary for residence's daily life.
As Yaoko has experienced when it expanded its business to Chiba prefecture, hearing is not
always the best way. Simply asking the local employees about their particular dietary habit
will not help you get all the information that you might need. In this case, after the opening
the store you will find that the store lacks some particular 'common' products in the region
that your rivals might be providing. The reason is that the regional residents do not regard
these particular foods. For them, it is a normal food, even though it could meet the demands
of the non-residents of the region.
The most effective solution is to ask the regional residents to cook their typical meals, and
examine the actual cooking. You can request ask them to cook anything, including breakfast,
lunch, dinner, and festive meals (for bon festival, Christmas, year-end, New Year's Day).
Though it may be time-consuming, such a method will provide you with the real
community-based information, including ingredients, seasonings, cooking methods,
arrangement on dishes, and a classification if the food is main or side dish. In addition, more
accurate information will be obtained if you make further research in various types of
households in the region; for example, household of salaried workers, farmers with side jobs,
and full-time farmers.
An MD rally was carried with Seiyu Toyoshina store. Though the Azumino-Toyoshina store is
dominating in some products such as sushi and sashimi, for other items such as minced pork,
the store is lacking in freshness and pricing. It is hard to say that the store overwhelms Seiyu.
Having periodical MD rallies will make the store overwhelm rivals in product's price,
appearance, and usefulness. The sales floor of Seiyu Toyoshina store has a better assortment
of mushrooms and pickled products, which are in high demand in the region. However,
Azumino-Toyoshina store has smaller spaces for these products. The store will need to
expand the variety of assortment by carefully observing the regional sales trend, not to miss
the best timing of a new product introduction.
MD rally with the store manager, divisional chiefs
and leaders
MD rally
Reasons for Azumino-Toyoshina store's good condition
------------------------------------------------------------------------------------------------------------1. While market population of an SSM is lower than ten thousand, suburban NSC can expect
eighty to ninety thousand market population. Such conditions indicate that only NSC has a
possibility of surviving in the future. For the reason, it is true that the opening of
Azumino-Toyoshina store was timely.
2. Variety of the tenants, including a drugstore, 100 yen shop, casual clothing store, satisfies
necessary conditions of a NSC.
3. The floor space of Azumino-Toyoshina store is 1,830 square meters. As a core store of the
NSC, it is an optimum size to provide various selections of articles enough to meet
member's needs. Moreover, the store has wide spaces for fresh food, cooked food, alcohol
and daily-delivered products (products with shorter shelf-life) because they are the key
products to win the competition between rivals.
4. As Nagano has four different regions (Hokushin, Chushin, Toushin and Nanshin) with
different diet cultures, Azumino-Toyoshina store has begun to provide a selection of goods
necessary for its own region.
5. The store targets personnel expense ratio at 10 % to realize its low-cost personnel
management, by having only eight full-timers working with the other part-timers. As a
measure for the efficient personnel management, the store installed some part-timers in
charge of leading daily-delivered products section and dry food section. The part-timers
are highly motivated to fulfill their operational duties.
6. The store posts three principles 'tasty, delightful, joyful, heart-warming Co-op store' as its
major slogan. Its operational attitude can be highly acclaimed as it values member's vision
as a major principle, as well as reflecting on the employees' view.
Read what the staffs say:
Okuda Hiroyuki, chief of the store business headquarter
Coop Nagano has developed a NSC, by obtaining a leased land of an old
factory site with a 19,800 square-meters extent. On developing the
NSC, it invited some tenants to the site. Coin-laundry located at the
entrance of the NSC is so prosperous that people wait in line on rainy
days.
Tamura Yoshiyuki, assistant manager of general affairs and personnel
section
It may need more time to increase the number of members visiting the
store. However, the total supply is gradually increasing after the
completion of a bridge connecting this area and Matsumoto City.
Ozawa Kiyoshi, manager of the Azumino-Toyoshina store
At first we failed to attract customers enough to be expected, as we
lacked in products highly demanded by members and in assortment for
daily commodities necessary in the region. To attract members, some
local brands and products with high demand will be newly introduced.
We will re-start on a new note.
Sano Tomomi, leader of the daily-delivered products
'My task is to make perfect orders not to have extra stocks while
preventing out-of-stocks. At the beginning, I sometimes made
inappropriate orders, and it resulted in an enormous amount of stocks:
for example, five thousand packs of coffee jellies, and three thousand
packs of iced coffee. Now I am enjoying my job working together with
co-workers.'
Takeda Megumi, leader of the dry foods
'Though I have never worked at any retailer, I was put in charge of a
responsible position as a section leader. I will do my best to make
effective orders to prevent out-of-order, by accurately understanding
marketable of products.'
Practice that other Co-op stores must learn
Purposing to make 'heart-warming Co-op store', that would be lively to both
members and store staffs.
-------------------------------------------------------------------------------------------Azumino-Toyoshina store posts three principles 'tasty, delightful, joyful, heart-warming Co-op
store' as its major slogan. The first principle 'tasty' represents the store's attitude pursuing
freshness and savor of food as the first priority, while providing 'tasty' food products. Buying
fresh fishes from the Sea of Japan four times in a week proves the store's commitment of
providing fresh and tasty products. The second principle 'delightful' represents the fact that
the store is providing member's largest satisfaction on shopping. For this purpose the store
gives staffs a substantial training. As a result, the store staffs help customers at the checkout
desks by carrying heavy shopping baskets to the self-sacking tables. They also depart with a
bow on leaving the sales floor. The third principle 'joyful' is to build an exciting and active
store. The store positively engages itself in the regional activities involving the local people,
while it challenges to build the most attractive store in a festal day. For example, it organizes
bamboo handicraft classes on weekends. The ideal situation of the Azumino-Toyoshina store
is to be the 'heart-warming Co-op store', under the cooperation of members and store staffs.
In addition, Azumino-Toyoshina store is creative with its arrangement of sales floor and
showcases, to build a lively community store. At the corner of the entrance, a flyer titled
'today's surprising prices' appeals cheapness of products.
Pic 1. At the entrance, 'today's surprising Pic 2. The alcoholic beverages section
prices' corner appeals special low price provides
products cheaper than 100 yen
various
sakes
from
prefecture, including local brands.
Nagano
Pic 3. Sake-kasu of a Coop brand product is Pic 4. The salmon corner, displaying sashimi,
displayed next to the local brands
fillet and other salmon products
Pic 5. In the backyard, led by the leaders'
section, staff meetings are frequently held
As shown in picture 2, the alcoholic beverages section provides various sakes from Nagano
prefecture, including local brands. In picture 3, local brewed sake kasu (settling) can be
found besides some vegetable and some co-op products. In addition, as learned from Coop
Sapporo, a special corner for salmon is placed in the store. Thus the store is making various
approaches to make the sales floor special as you can see in picture 4.
The store has eight full-time staffs. Some part-timers are leaders of the dry food section and
daily-delivered products section, to realize a low-cost business management. In the backyard,
led by the leaders' section, staff meetings are frequently held (picture 5). All part-timers are
dressed clean and greet members cheerfully, as they are highly motivated. The
'heart-warming' store operation is giving utmost priority to members, as well as considering
the workers for the purpose of providing them with job satisfaction.
Author of this article: Mr. Orito Isao
Mr. Orito was born in 1946, in Hokkaido. He worked at
the member support headquarter in JCCU. Now he is the
head of Japan store developmental support Co., Ltd.
Author of 'Milestone for store management in Co-op'
(published by Korean cooperative union publishing company), '
The seven key methods to succeed through the competitive age', 'Easy to understand about store
management', and 'Visual store operation for beginners' (Co-op Shuppan), and 'Practical store
management handbook for glossary store managers' (Japan consultant group).