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FamilyMart thinks small in 'shrinking' areas

FamilyMart Co. has decided to open small franchise stores in areas with shrinking populations as early as next year, to help so-called "shopping refugees" who are having trouble buying daily necessities as supermarkets and other stores in their areas close due to the dwindling number of customers.

FamilyMart hopes to drastically curtail the cost of opening new stores by reducing the size of such outlets.

It will narrow the product lineup to ready-prepared food and living necessities, and will consider offering delivery services for such customers as elderly people who have trouble walking.

This is the first attempt by a leading convenience store chain to help people who are having difficulty buying daily products.

Average daily sales at convenience stores range from 500,000 yen to 600,000 yen. However, FamilyMart aims to operate a low-overhead business in such stores that can still make a profit on sales of about 200,000 yen a day.

FamilyMart President Junji Ueda has said the company will select products that "meet the demands of shoppers in each region."

Floor space will be limited to about 30 square meters, one-third that of typical stores, and prefabricated building materials will be assembled at the site.

Also, the stores will be located along distribution routes between existing outlets in key regional cities and FamilyMart's logistics center. The company is currently choosing locations.

Convenience stores usually open in urban areas where a certain number of customers is expected. However, the market is close to saturation with about 44,000 nationwide.

There are believed to be about 6 million people who find it difficult to buy groceries at nearby stores due to aging or depopulation of their areas. FamilyMart believes it will be profitable to target these customers as long as the stores are franchised at low cost.

(Dec. 20, 2010)
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