Seiyu to Strengthen EDLP and Focus on Freshness and Convenience
October 30 2014 - 12:08AM
Business Wire
Plan calls for continued investment, while
adjusting store portfolio
Note: This is an English translation of the release issued in
Japanese.
Seiyu GK (“Seiyu”) today announced its plan to invest in several
areas of strategic focus over the next few years to allow for
improved in-store customer experience and greater access to online
shopping. Through these investments, Seiyu will further enhance its
capability to provide customers with a better shopping experience,
focused on freshness and convenience. At the same time Seiyu will
steadily driving EDLC (Every Day Low Cost) and improve productivity
across the company, with the objective of significantly
strengthening its EDLP (Every Day Low Price) strategy.
Seiyu’s EDLP strategy has led to increasing customer recognition
of low prices, and sales and profit growth over the last five
years. The company saw its accelerated growth continue during the
first half of this fiscal year, significantly outperforming the
overall market. Performance was driven by price leadership, as well
as ongoing initiatives to enhance its fresh and deli offerings, and
fuel growth of its private brands and services under SEIYU.com.
Building on its strong performance, Seiyu will upgrade its
overall store portfolio and close nonperforming stores that are not
aligned with the company’s strategy.
Outline of the Strategic
Investments:
■ Accelerate store remodels to offer more comfortable and
convenient shopping experiences:
Seiyu will accelerate remodels of existing stores, with
particular focus on enhancing fresh and deli categories to provide
customers with a more comfortable and convenient shopping
experience and a better fresh offering. With an eye on increasing
customer needs, the company plans to remodel approximately 50
stores in 2015, aiming to create a lively shopping environment
where customers can enjoy quality fresh foods or do quick shopping
for prepared meals. Through these remodels, the company will also
improve productivity and efficiency of its store operations.
■ Enhance capabilities to manufacture deli products and
control quality of fresh foods:
Seiyu will invest in the deli manufacturing facilities of
Wakana, a wholly owned subsidiary of the company, to improve
overall productivity and enhance production capabilities. It will
introduce more versatile cooking and processing equipment providing
greater flexibly to increase and upgrade menu variety. Regarding
fresh foods, the company will set up dedicated quality control (QC)
facilities and teams at all distribution centers (DCs) by the end
of 2015, establishing a system to implement DC-based comprehensive
inspections on all major produce items. The inspection results will
be shared with suppliers to pursue continuous improvement both in
quality and productivity. This QC system will expand to meat and
fish categories in the future.
■ Portfolio optimization:
In order to further drive EDLC and improve profitability of its
entire business, Seiyu will close approximately 30 existing
nonperforming stores. The company will focus resources on driving
continued strong performance in locations that are convenient for
customers and allow for an improved shopping experience.
■ Continue to expand the capacity of SEIYU.com:
In the Greater Tokyo area, where demand for online grocery home
delivery is growing, Seiyu will increase its fulfillment and
service capacities in the next three years. With a goal to expand
the service coverage to the entire metropolitan area, the company
will accelerate steps to improve productivity of its online grocery
operations in order to serve rapidly growing customer needs more
efficiently and cost-effectively.
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