Staff writer Thomas S. Haggai believes his Japanese counterparts should be more optimistic. Although officials of International Grocer’s Alliance Japan predict its membership will grow by another 75 stores to 300 by next year, Haggai, president and CEO of IGA, believes they can add at least another 100 on top of that. “For years they’ve been saying family businesses will go under. Well, they’re not. Family businesses are still the backbone of the whole world,” Haggai said during a recent visit to Tokyo, adding that he thought this is particularly true in Japan. IGA is the world’s largest not-for-profit supermarket network committed to improving retailing systems of family grocers worldwide. The network, which supports itself through licensing fees, offers training, consulting and bulk-buying services that draw on the knowledge and experience of more than 3,600 grocers in 37 countries to help family-run stores compete with supermarket chains. Yet while the alliance has cut its membership over the past few years, largely by imposing more stringent operating standards on its licensees, membership in Japan continues to grow apace. “Our goal is 300 stores by 2000,” Haggai said. “But I’m a hard task master. I say … there will be 400 stores in Japan by the end of 2000, and 500 by 2001.” Haggai, who was visiting Japan to attend the annual IGA Japan General Meeting last month, believes the IGA philosophy of moving away from supermarkets and toward what he calls “community centers” will be a key to further development in Japan, where IGA-affiliated stores — like most others in the organization — are largely located in rural areas. “The reason we’re upping our program here is, as Japan’s economy has changed, its people are getting nervous,” Haggai said. “They had lifetime employment. They won’t in the future. … it’ll be different. There’s going to be a loneliness in Japan,” he said. “We’re saying ‘We don’t need any more supermarkets, we need community centers … and people in the stores who care (about customers),'” he said, adding “There’s a worldwide rebellion against the ‘big block’ (supermarkets).” To this end, Haggai said IGA leads with training, educating staff to be service-minded and gain customer loyalty. After all, Haggai said, not all shoppers want the kind of convenience shopping offered by the likes of the Internet. “The easier it is to connect, the more difficult it is for us to communicate,” Haggai said. “You often hear ‘The survey shows people hate to shop.’ The people who say that aren’t in the stores as much as I am.” Haggai also believes Japan’s aging society will be a key to further growth for IGA. In the United States, where the voluntary organization was founded in 1926, IGA this year launched its “Kidfest” program at its 1,800 U.S. stores. The program, which Haggai said will be introduced in Japan in the near future, features face-painting, clowns and magic shows “to show we’re committed to the community,” Haggai said. “If you appeal to the kids, you get the parents and the grandparents,” Haggai said. “The grandparents have all the money … and have more influence than anyone (on the kids).” Haggai said he does not see another trend — the increasing convenience store culture in Japan — as a threat to small grocers. He says convenience stores should be viewed as allies rather than competitors. “In Singapore, we control 60 percent of the food business, yet there’s a big Seven-Eleven culture there, too,” he said. “Everyone knows we’re a family business. … If we’re not doing it right, why do we open a store every 36 hours?”
By subscribing, you can help us get the story right.