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HOME > Welcome to Seicomart > 2008 Seasonal Business Report

1.Business Progress and Result

(1) Business Conspectus

－Business trend of Hokkaido－
  Convenience store industry has enjoyed the benefit by the introduction of TASPO in 2008. In March, the cigarette vending machines equipped with the function to identify the age called TASPO system was introduced in Kyushu prefectures and by July it was introduced in the entire Japan. By this the sales of Convenience stores in Japan have considerably increased by 6.1% from last year.

  TASPO was introduced in Hokkaido in May. According to Hokkaido Bureau of Economy, the sales that have decreased compared with the previous year until April have increased by 8.5% in May. Since May, the sales compared with the previous year have been increasing approximately by 6%. According to an advance report of Hokkaido Bureau of Economy which was released in February, the number of stores which leading Convenience store companies operated in Hokkaido was 2,460, increasing by 9, or 100.4% of the previous year. The total sales were 425 billion yen, increasing by 3.9%, or 15.9 billion yen from last year. This was the first time in 6 years that the sales have increased compared with the previous year. The total sales of 2007 decreased by 1.7% compared with the previous year.

  The sales and the number of customers of Seicomart have also substantially increased compared with the previous year since May. In May, the number of customers was up by 10.4% and the sales were up by 8.8%. Since June the sales have been increasing approximately by 7%.
  The point worthy of attention is that the sales of Hot Chef, beverage, side dish ("sozai") and produce are increasing steadily by exceeding the previous year. The positive sales of cigarette by TASPO have been contributing to the total sales; however, the real reason behind the steady increase in sales is that the customers who visited a Seicomart store after the introduction of TASPO system began to know the products and convenience of Seicomart, and becoming regular customers. In addition to the merchandising policy including vegetables, retail brand and Hot Chef which represents the word "deliciousness and freshness", we have reinforced the store employee training to improve the interaction with customers and promoted store remodeling. The positive sales is a result of these our efforts.

 

(2) Main Business Conspectus

  We have established the comprehensive system that we procure the raw material, manufacture, process and distribute by ourselves to minimize the influence of the outside suppliers as much as possible, because this is what we have imaged that the merchandising policy should be. We have made the clear distinction from our competitors on the taste and the price by establishing our system.
  Moreover, we were able to maintain the price of Retail Brand products under the sharp rise in fuel and raw material costs. It is a result that we have established our own distribution system by linking each supply chain closely such as procuring, manufacturing and delivering, and adjusted them.
  We also have established the system based on the scientific theory even in the area where customers cannot see directly and have focused on supporting Seicomart chain as a whole by a tight chain utilizing the latest information technology and distribution system. In 2008, we have further promoted our distinguishing products such as fresh vegetable and fruit, original Retail Brand products and Hot Chef, achieved the kind and friendly customer service and focused on establishing superiority over the competitors.
  Furthermore, from the second half of 2008, we have increased the number of TVCM by 1.5 times to inform more customers of our original products. We have made an excellent result in holiday season including Christmas and New Year.

 

a) New Store Policy

  In 2008, there were 35 new stores and 25 closed stores in Hokkaido, 7 new stores and 8 closed stores in Kanto area, thus the net increase was 9. As of the end of 2008, the number of operating stores is 939 in Hokkaido, 80 in Ibaraki prefecture, 21 in Saitama prefecture – the total number is 1,040.
  We continue to open stores in all 180 municipalities in Hokkaido. In September 2008, as we opened the new store in Okushiri (Okushiri Island) the number of municipalities without our store became 11. We have remodeled or moved 13 existing stores to strengthen our competitiveness.
  Moreover, we have focused on opening of the stores at special locations such as at highway parking area, Hokkaido Government and Tokachi branch office as well as a large commercial building and a college campus. Stores at these special locations have achieved high sales.

b) Operation and Products

  In 2008 we have continued emphasizing our features focused on perishables, Retail Brand products and Hot Chef.

－Perishables－
  The sales of perishables are increasing every year. This is a result that we have developed the health- and convenience-oriented products. Because perishables are effective means to capture housewives and the aged customers who normally go to supermarket, we would like to earn the customers’ confidence in our store with freshness and quality through perishables. We are trying to reduce the processing time from harvest to the store by connecting a growing area to a store directly. Regarding the produce that represents perishables, we have strengthened the partnership with the agricultural corporate bodies and selling the mini tomatoes grown by them at the stores the day after harvesting. In the past many farmers had disposed vegetables with below standards in size and shape, because they were not able to sell at the stores. However, we have come to demonstrate our strength in taste and price by buying those below-standard produces at low prices from agricultural corporate bodies and using them for salad and soup.
  We have been increasing the direct-buying from the contract farmers for some time. In 2008 we have also reinforced the support to agricultural corporate bodies. We have strengthened the relationship with the agricultural corporation bodies beyond the framework of buying the harvest from establishing the corporate body to managing the operation.
  We are tackling environmental issues by using leftover food as feeds, converting them into fertilizer and expanding the establishment of greenhouses that utilize the used cooking oil.

－RB(Retail Brand)Product－

  We newly developed and renovated 432 SKU, increasing by 74 SKU compared with the previous year. We were able to maintain the price and the quality, and were able to achieve positive sales by increasing the number of product development such as side dish ("sozai"), noodle and ice cream manufactured by the related companies. We were able to keep up the price of low-priced products such as 100-yen side dish ("sozai") and 100-yen noodle by switching to the self-manufacturing of wrapping materials within the related companies from purchasing from the outside companies.
  In order to establish our original flavor, we have centralized the development and the production of sauce and soup used in our original products at a sauce plant where our related company had acquired, so that we were able to improve and keep consistency in our flavor.
  Our Retail Brand products have gained support from a lot of customers as the result of our efforts, and the sales volume of our Retail Brand products now accounts for 40% of all products excluding cigarettes and magazines. Especially the sales volume of Retail Brand products in a drink category accounts for about 50% so that the Retail Brand drinks play an important part in securing regular customers.
  We will make an effort to establish the manufacturing structure as we expect the superiority in the quality and the price of Retail Brand products will become more important under the tough economic environment in Hokkaido.

－Hot Chef－
  Hot Chef is one of our pillars representing the taste and freshness of Seicomart products. Hot Chef menu is accepted favorably by consumers because of its convenience and deliciousness. In 2008, while we have increased the number of stores selling Hot Chef products, we also have enhanced a cooking method by introducing the new machines to improve the development of new products and efficiency of operations. As the result of increased number of the space-saving mini stores or stores selling only rice balls among Hot Chef products, the number of stores with Hot Chef menu including stores selling only rice balls has reached to almost half of all stores, or 490 stores as the end of 2008.
  Hot Chef plays an important part in strengthening the competitiveness and increasing earnings of stores as well as in making Seicomart distinctive.
  We will continue to promote the introduction of the stores with Hot Chef menu and to increase sales a day per store in 2009.

－Sales Promotion and Advertising－
  In 2008, in addition to the existing flier promotion, we have developed 4,324 TVCM for a year, increasing by 1.5 times from last year to make many customers recognize Seicomart. The advertisement by TVCM on our unique products such as Hot Chef products, Retail Brand beverage and bananas continues to be effective even after TVCM have ended.
  The Store Operation Department is also undertaking the in-store promotion associated with fliers or TVCM. We will continue to focus on the prevention of the out-of- stock conditions.

－Customer Service－
  We are making a new effort to strengthen the store operation. To run ahead of the competitions in customer service at the store, we invited some consultants from the United States, reviewed the customer service standard and developed the new contents of the effective training. In the new training, we put emphasis on making in-store employees understand the goals and means of behavior necessary for in-store job. As a result, in-store employees have come to understand the required customer service standard theoretically and take an action easily. Moreover customers evaluate that in-store atmosphere became lively and spirited by changing the greeting. Communications between in-store employees and customers have increased and the gap between them has been narrowed. As a result, in-store employees have come to be able to explain, suggest the products and receive lots of advanced orders.

－Loyalty Card System－
  We introduced loyalty card system in 2000. The objective of this system is to clarify the relationship between the geographical distribution, the generation, the gender of customers, and the characteristic of products, to utilize for the merchandising and the sales promotion and to secure the customers by offering gifts. In 2008, the number of non-member customers has increased by the introduction of TASPO. So we have built up some policies such as converting a non-member to a member, increasing mail magazine member, offering product information to customers immediately and reflecting opinions and demands from mail magazine members to merchandising.

c) Store Supporting System

  We have put emphasis on the strengthening of information system and the efficiency of distribution system in order to increase the sales in 2008.
  In 2007, we introduced the system that can work with analyzing task by various divisions in more flexible manner and with shorter time to reinforce the database function of host system in Headquarters. In 2008, this system has begun to be utilized in the full scale and has contributed to the improvement of ordering and display of products considerably.

  We have reviewed the operation process of the distribution centers under the guidance of foreign consultant company of logistics, and introduced the software useful to the efficient operation of vehicles and achieved the reduction of vehicles used. Efficient logistics is getting more important considering the corporate earnings under the sharp rise in raw material and fuel costs. Our improved logistics has proved its effectiveness under fuel cost rise in 2008. There is no ending to the logistics improvement. We will continue to improve logistics systems from logistics tool to remodeling of a distribution center.

  In 2009, we will start to develop POS register, and carry out the operation to analyze the most product-selling conditions easily and in a short time by linking POS register to Headquarters’ database and information analysis software.
  As a part of improvement of logistics efficiency, we will introduce a distribution routing system to our other local distribution centers besides Sapporo distribution center at where this routing system has reduced its distribution cost. Moreover, we will continue improving the accuracy and reduction of the inventory.

d) Results

  In this season, the number of stores was 1,040 with total amount of store sales of 159,804,590,000 yen, and our corporate sales amount was 8,464,600,000 yen.

 

2. Company Profile(as of December 31, 2008)

(1) Headquarters

    421, West-5. South-9, Chuo-ku, Sapporo 064-8620 Hokkaido

(2) Capital

    428,040,000 yen

(3) Employee

    304

(4) The Number of Stores

    Total：1,040(Hokkaido:940,Kanto:100(Ibaraki:81,Saitama:19))
    ※as of the end of April 2009

(5) Subsidiaries and related companies

Main business	Company name
Retailer	Seico Retail Service
	Hokkaido Spar
	Hasegawa Store
Manufacturer	Hokusan Foods
	Hokurei
	Hokko
	Hokugen
	Umezawa Seimen
	Toyotomi Milk Plant
	Kyogoku Seihyo
Wholesaler	Hokuryo Photo
	Kyoritsu Nyuhin
	Seico Fresh Foods
	Doto Seico Fresh Foods
System Development	Seico System Engineering
Other	Hokuho

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