HOME > Welcome to Seicomart > 2009 Seasonal Business Report

1.Business Progress and Result

(1) Business Conspectus

－Business trend of Hokkaido－
  In 2009, under the substantial cut of bonus and higher unemployment rate, the personal consumption that holds the core of domestic demand became sluggish and the consumers started to cutting down their spending further.
  Under such an environment, the number of stores in 2009 of 11 leading convenience store companies affiliated with Japan Franchise Chain Association was 42,629, increasing by 2.2% from the previous year. The total sales increased by 0.6% from the previous year, and the same-store sales decreased by 0.2% from the previous year, which was the first decline in 3 years that the same-store sales have decreased compared with the previous year. It was the first time that we saw the decline in the number of customers of all stores for a total of 4 months a year compared with the previous year.
  According to an advance report of Hokkaido Bureau of Economy released in February, the number of stores which leading convenience store companies operated in Hokkaido was 2,489, increasing by 29 from the previous year. The total sales were 431.2 billion yen, increasing by 1.5% from last year. The same-store sales have declined from the previous year since May when one year has passed from the introduction of TASPO.
  However, at Seicomart not only the total sales of all stores have increased, but also the same-store sales have increased by 2.3% compared with the previous year. Especially, it was noticeable that the number of customers has continued to increase compared with the previous year after May when one year has passed from the introduction of TASPO.
  We have established the comprehensive system that we grow and procure the raw material, manufacture, distribute and sell the products, and developed the unique products aggressively, aiming to offer a high quality, low price and tasty products. The year 2009 became a fruitful year with a long time effort.

 

(2) Main Business Conspectus

a) New Store Policy

  In 2009, there were 44 new stores and 16 closed stores in Hokkaido, 4 new stores and 4 closed stores in Kanto area, thus the net increase was 28. As of the end of 2009, the number of operating stores in Hokkaido was 967, 82 in Ibaraki prefecture and 19 in Saitama prefecture – the total number was 1,068.  The total net increase of 5 convenience store chains in Hokkaido was 42, including 28 stores of Seicomart.
  As a result of promoting to open new stores in Tomakomai area and Muroran area where the manufacturing plants concentrate and in Noboribetsu area, tourist resort, the net increase of our stores in these areas is 8 and our market share has grown to 36%. The number of the stores which we operated in Sapporo became 278, increasing by 9 under a keen competition of opening new stores among competitors, and the number gap between Seicomart and the other chains has widened further.
  Moreover, we have remodeled or moved 11 existing stores. As the result, the sales of these stores have increased by 31% compared with the sales before remodeling.
  As a new approach we have developed a store format combining multiple kiosks and vending machines in a facility, and opened it in Teine Keijinkai Hospital and Nishimaruyama Hospital. In addition to this, we have developed a two-story store; first floor is an ordinary store and second floor is a dining area and smoking area.

b) Operation and Products

  In 2009 we have carried out a large-scale sales promotion laying emphasis on TVCM. We have increased the number of TVCM by 3 times from the previous year and put a whole page advertisement in news papers aggressively in addition to the existing flyer to inform more customers of Seicomart and to spread our thought of the original products.
  For the store operation, we tried to establish the stores that would meet the consumers’ expectations and fulfill a high level of customer services in connection with the sales promotion. Furthermore, we have made an effort to secure enough inventories at the store so that the customers are guaranteed to find the products advertised by TVCM or flyers and to be able to purchase them.
  The sales volume of our Retail Brand products including Hot Chef and original products now accounts for nearly 50% of all products, thanks to the TVCM. The sales volume of 100-yen side dish and 100-yen noodle which have been sold since 2002 have increased by 1.9 times compared with the previous year. We have communicated strongly through the TVCM and flyers that our 100-yen side dish is made with the raw materials from the particular growing areas and with the seasonal flavors as well as a low price. As a result of this effort, the sales of unique items such as boiled food or grilled fish have increased substantially. The sales of 500-yen wine have also increased by 1.5 times compared with the previous year and pulled up the sales of the entire wine department.

  We have continued to encourage a store employees’ training development to distinguish Seicomart from others. We again invited consultants from the United States and changed the focus of training from mastering of existing job to heightening the employee’s will to work. Store employees have come to be able to offer better customer-oriented services than before by understanding the goals and means of behavior necessary for in-store job. The new greeting which was introduced in 2008, “Welcome to Seicomart,” has helped increasing of the communication to the customers. In addition to the strengthening of employee’s training, we have enhanced the education of employees acquiring the knowledge of products through Partner Promotion. Being able to communicate with customers with confidence has resulted the increased number of advanced orders and of Seicomart Club Card members. We have succeeded in communicating Seicomart quality rooted in a region through our products and customer service with the customers who visited store by seeing us on TVCM.

  In 2009, the same-store sales of Seicomart have increased by 2.3% compared with the previous year. Hot Chef and our Retail Brands products such as 100-yen side dish, various deserts, bread and 500-yen wines, led this increase. The number of RB products has increased to 1,019 SKU in 2009 and the sales of Retail Brand products now account for 41.9% of all products.
  The number of stores with Hot Chef facility has reached to almost half of all stores, or 593 stores as the end of 2009.　We have opened 3 types of Hot Chef store adjusting to each location, Hot Chef stores, Hot Chef mini stores and stores selling only the rice balls. Further, we have developed new items, introduced new equipment to improve the efficiency of operation and remodeled existing stores to new design stores.

  The best-selling item at Seicomart store is Seico Fresh Hokkaido milk. Raw milk that is produced by dairy farmers in Toyotomi is also used as ingredients of ice cream, various deserts, some coffee drinks and side dishes other than milk that is sold at Seicomart stores. High quality heavy cream and butter generated in the process of low fat milk or modified milk production are used for 100-yen carbonara, Hokkaido milk soft cream and cocoa.
  Regarding the produce, not only we sell tomatoes and cucumbers grown by agricultural corporate bodies, but also we use below-standard produce for salad or sauce. Furthermore, we make fishmeal by desiccating the fin or body parts of fish that is used as the compost by agricultural corporate bodies. Vegetables wastes and edges of bread generated during the manufacturing processes of side dish or sandwiches are also an important component of compost. Moreover, used cooking oil generated in preparing the side dish or at Hot Chef is utilized as fuel of boilers for greenhouses in agricultural corporate bodies.
  We are undertaking the environmental issues by strongly connecting and unifying resources and skills of the related companies, creating high quality and low price products systematically, cutting inefficient distribution and utilizing every raw material without wasting.

c) Store Supporting System

  We have aggressively invested in plant and equipment in 2009 with anticipation for the future. We have supported Seicomart stores to introduce new tobacco display fixtures at Seicomart headquarters’ expense. The new tobacco display fixtures have contributed to the sales increase of tobacco. Moreover, we have supported remodeling of restroom and replacing of microwave ovens to new ones in order to improve shopping environment in a store.
  We also have developed a new POS system to support the competitiveness of the store operation from the side of information technology, and introduced the new hardware in 64 stores in October that has improved the display and the processing speed.
  We have continued to undertake the distribution efficiency. We have rebuilt the Sapporo distribution center in February 2009. By expanding the receiving and shipping area we have successfully reduced the waiting time of vehicles. Ibaraki distribution center started to operate in April 2009. We were able to reduce the cost for logistics in Kanto area by 10% in the first three months through reexamination of distribution process. In October, we have introduced the logistics database and improved consolidated management of inventories and the financial data.
  In the background of strong sales of Retail Brand products, we also have engaged in strengthening of the foundation of production/manufacturing and supported to build and remodel our affiliated manufacturing plants.

d) Results

  In this season, the number of stores was 1,068 with total amount of store sales of 165,990,570,000 yen, and our corporate sales amount was 9,424,340,000 yen.

 

2. Company Profile(as of December 31, 2009)

(1) Headquarters

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

(2) Capital

    428,040,000 yen

(3) CEO

    Tomoyasu Marutani, president

(4) Employee

    292

(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
	Daimaru Nyuhin
Wholesaler	Seico Fresh Foods
	Doto Seico Fresh Foods
	Hokuryo Photo
	Kyoritsu Nyuhin
System Development	Seico Systems Engineering
Other	Hokuho
	Hokuseki Engineering
	Seico International Trading Company Ltd.

※Hasegawa Delica has become Hokusan Foods Hakodate plant dated January 1, 2010 by a merger.

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