Japan’s second largest convenience store chain, FamilyMart UNY Holdings, considers a partnership with China’s CITIC Ltd. and Thailand's CP Group to create a new business, its president said according to a Reuters report.
The companies are studying various opportunities outside the convenient store business, said Koji Takayanagi, who served as the head of trading house Itochu Corp.’s food division.
FamilyMart UNY Holdings, created from a merger between FamilyMart and UNY Group, aims to be the second largest convenience store next to Seven & I Holdings Co. The company has forecast more than 200 percent operating profit growth to 1,000 billion yen ($8.79 billion) within four years from the current fiscal year’s 412 billion yen.
According to Takayanagi, the growth will be propelled by the conversion of its Circle K and Sunkus stores into more profitable FamilyMart, thereby achieving a 10 percent to 15 percent increase in store sales.
“There is plenty of room for growth,” he said, describing the company, which also operates supermarkets and general stores.
Although FamilyMart is successful in its businesses in Taiwan and China, it is experiencing loss in Thailand, Vietnam and Indonesia.
“If we can get them to rally we will, but we cannot continue to pour in resources,” Takayanagi said.
FamilyMart’s rival Seven & IHoldings runs 7-Eleven, the biggest convenience store chain in Japan. The latter continues to expand abroad, particularly in the United States.
While its competitor focuses on overseas expansion, FamilyMart will keep concentrating on the domestic market, its president said.
“It is easier to achieve results domestically and we know what to do,” Takayanagi said.
Companies are pushed to innovate as the country faces a worsening labor shortage, which causes convenience stores to struggle in finding workers to man stores and fill shelves, he added.
Takayanagi is not worried about the country’s declining birthrate and aging population.
“Even if the amount an individual eats declines . . . if we offer items with added value people will buy them,” he said.
FamilyMart is hoping to expand its business with a possible partnership with China's CITIC and Thailand's CP Group.