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For many modern urban residents, the typical harbinger of winter is the smell of “oden” steaming on the convenience store counter.

Traditional oden — vegetables, fish dumplings and other types of food simmered slowly in a soup — has not only become the top showcase item for convenience stores during the winter season but also a bellwether of the chains’ marketing strength.

FamilyMart Co. fired the opening shot in this year’s “Oden War” by having an in-house project team start work on an entirely revamped menu way back in the spring.

“Honestly, we weren’t serious about oden at all in the past and we had to start almost from scratch,” said Masaaki Kosaka, general manager of the merchandise planning division at Japan’s fourth-largest chain store.

Since September, its new oden product lineup has featured a specially concocted soup as its main attraction.

To ensure the quality of oden at its outlets, the firm conducted numerous seminars for store clerks and field officers, and started the program only at its 4,000 stores with newly installed cooking equipment.

FamilyMart, which had 5,931 domestic outlets as of the end of August, hopes the new oden promotion will help boost profitability after major restructuring measures over the last year, when the parent firm closed a record 503 outlets.

For the full business year through February, FamilyMart hopes sales from stores that have been operating for at least one year will grow 0.5 percent, the first year-on-year increase in five years.

For FamilyMart and its rivals, foodstuffs — particularly fast food, such as oden and “onigiri” rice balls — have strategic importance given their large profit margin. It is also one area in which chains can differentiate from their competitors in product development, they say.

Although the nation’s major convenience store chains will not disclose specific sales figures for oden, Kazunori Tsuda, a senior analyst at Daiwa Institute of Research Ltd., estimates that average daily sales of oden per store for last winter came to around 20,000 yen for Seven-Eleven and 10,000 yen for Lawson.

The figure for FamilyMart was virtually nil for the same period.

After acknowledging the importance of regional marketing, the nation’s No. 2 chain operator, Lawson Inc., which has outlets in every prefecture, began offering a few years ago four different oden soups in different parts of the country.

For example, the soup was relatively sweeter in Kyushu, while the thick soy sauce taste is more characteristic of the Kanto menu. For the oden ingredients, the chain has incorporated local produce to better meet local preferences, adding 15 products that are only provided locally to 27 that are available nationwide.

For example, Lawson has added pig’s trotters to its menu at stores in Okinawa.

“It’s true that adopting a common product lineup nationwide was the principle of the chain store management theory during the expansion period, but it’s no longer like that since the industry has matured,” said Takashi Fujii, a Lawson spokesman.

“In a sense, we are back to the basics of retail merchandising as convenience stores are facing greater demand to respond to local customers’ needs.”

However, critics say Lawson’s aggressive opening policy means it has spread itself too thin; it is losing loyal customers to rivals in its traditional Kansai stronghold, including its birthplace Osaka, where Seven-Eleven Japan Co. has been expanding operations.

Seven-Eleven, despite having 9,314 outlets as of the end of August, making it the largest in the field, is geographically limited. For example, the company only opened in Osaka seven years ago and still has no stores in Shikoku.

Officials of the operator attribute this to its “dominant store opening policy,” which concentrates on opening new outlets in narrowly focused areas, saying this strategy greatly enhances distribution efficiency and customer loyalty.

Seven-Eleven now has its sights on Aichi Prefecture — where Circle K enjoys the overwhelming home advantage. After opening two stores in July, Seven-Eleven plans to open more than 80 outlets, mainly in Nagoya, through February.

One tried and trusted measure to attract customers in Nagoya has been to make the taste of oden more in tune with local preferences, which is to put miso bean paste in the soup, said Seven-Eleven spokesman Tetsuhiro Kaneko.

The firm has taken pains to ensure the quality of oden served at its outlets, with cooking manuals being revised every season and field officers visiting and checking the taste of the soup every day, Kaneko said.

Daiwa Institute’s Tsuda said, “Sales at convenience stores peak in July and August, and oden, with its large profit margin, is an important item for the industry as one of the main revenue-earners during the winter.”

Oden is also a gauge of the chains’ marketing strength as sales depend on how well store clerks at each outlet present the dish as an appealing proposition to customers, according to Tsuda.

“In the convenience store industry, I think Seven-Eleven’s lead will continue for a while, as it aggressively releases original products with large profit margins,” he said. “The challenge for its rivals is how to keep up with the leader.”

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