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Japanese mega-retailer proves 'grocery-ification' of eating out goes beyond US

July 5, 2017

Call it the grocery-ification of the restaurant business, and it is happening and not just in the U.S.

According to Reuters, in fact, the largest Japanese retailer by sales, supermarket operator, Aeon Retail, last week reported a "better-than-expected quarterly profit," and a nice chunk of that success is attributed to its renovated Aeon Style stores, where shoppers can chow down on their purchases in special new eat-in areas. 

This positive news — even when Japan continues to suffer from 20 years of lagging consumption due to nationwide deflation — is a sign that much like U.S. shoppers, those in Japan will also let go of their cash even in an uncertain market, if it means they can save and dine a la supermarket aisle. In other words, yes, restaurants have a whole new source of competition and its spreading around the world. 

Financial analysts keep a close eye on major Japanese retailer earnings as they have served in the past as a good gauge of changes in shoppers' buying habits. As in the U.S. and many other more developed areas of the world, convenience store eat-in areas that let shoppers nosh on lower-than-restaurant-priced prepared foods, have been booming. 

At Aeon, that new service — along with price cuts and some company restructuring — is being held up as a successful new strategy in even the funkiest markets. For instance, in the quarter that ended in May 31, Aeon Retail posted a 36.6 billion yen ($323 million) operating profit, up 11.4 percent from the same period last year and well over the  average estimate of 35.2 billion yen from Thomson Reuters' three analysts.