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FamilyMart profit in China spurs expansion

JIJI

The Chinese operations of convenience store chain FamilyMart Co. turned a profit in the second half of 2013, President Isamu Nakayama said.

The company has been curbing new store openings and putting priority on improving profitability for fiscal 2013.

But Nakayama stressed in an interview that FamilyMart “is set to actively launch stores in China” now that its Chinese operations are turning a profit.

As part of the strategy, FamilyMart will consider opening outlets in Beijing for the first time, Nakayama said. At the end of November, FamilyMart had about 1,050 stores in China, mainly in Shanghai and Chengdu, the capital of Sichuan province.

Looking at the domestic market, Nakayama underscored that his company is determined to redouble efforts to catch up to industry leader Seven-Eleven Japan Co.

The unit of retail giant Seven & I Holdings Co. plans to open 1,600 new stores in Japan in fiscal 2014.

“We will try to launch 1,601 stores,” Nakayama said.

FamilyMart’s fiscal 2014 capital spending is expected to exceed the ¥100 billion estimated for fiscal 2013 by 10 to 20 percent, due to active store openings at home and abroad and the rising price of construction materials.

Nakayama noted that the consumption tax hike due April 1 “could lead to a decrease in per-customer spending, but may prompt people who currently buy at specialty shops to switch to convenience stores, which offer lower prices.”