Ginza, Shibuya and Tokyo’s other well-known commercial districts are coveted by retailers for their ever-present shopping crowds.
But the nation’s largest drugstore chain has found its biggest success story not in Tokyo and not even in a shopping district.
Chiba Prefecture-based Matsumoto Kiyoshi Co.’s busiest outlet is inside Osaka’s main train station. It was the 600-store chain’s first shop in Osaka.
Matsumoto Kiyoshi has expanded by attracting young urban women with cosmetics and suburban housewives with grocery items.
But with 400 million yen a month in sales, it’s the outlet in the JR Osaka Station building that attracts all the attention.
“Because of high passenger volumes, outlets in stations have the potential to generate more sales than stores in Tokyo’s commercial districts,” Matsumoto Kiyoshi President Namio Matsumoto said.
Matsumoto Kiyoshi opened the JR Osaka Station outlet in March 2000. Thanks to the large number of people passing through the station, that store’s sales have surpassed even the company’s strong outlets in Tokyo.
The firm used TV commercials to pitch its brand image to people in Osaka.
“Before opening the outlet in Osaka, we sponsored popular TV programs targeting young women — our primary customers,” he said.
The firm has been sponsoring television shows since 1996 with commercials geared to boosting its image with young women.
The strategy has apparently paid off. Matsumoto Kiyoshi’s 600-some outlets boasted combined sales of 262 billion yen for the business year that ended in March.
The company plans to open 90 more outlets this business year, including more than 15 inside train stations, following the success of the Osaka shop.
“We have set a target of 500 billion yen in sales with 1,000 outlets across the nation by March 2008,” Matsumoto said.
However, many drugstore chains, including Matsumoto Kiyoshi, are having a hard time meeting Health, Labor and Welfare Ministry regulations requiring them to have a pharmacist at each of their drug counters.
Matsumoto Kiyoshi is considering offering 24-hour service, but it has to attract pharmacists willing to work at night, or get the government nod for less-qualified staff.
“We are calling on the government to allow us to station health-care advisers instead of pharmacists,” Matsumoto said.
Health-care advisers, who do not have to know how to fill prescriptions, would be trained by drugstore chains. They are required to pass an examination approved by the Japan Association of Chain Drug Stores, which Matsumoto chairs, about providing over-the-counter drugs for the general public.
If Matsumoto Kiyoshi starts 24-hour service using health-care advisers, the chain could survive competition with convenience stores and discount store chains that are preparing to sell drugs even late at night, Matsumoto said.
Tokyo-based discount giant Don Quijote, for example, began in August giving away medicines after midnight at 10 outlets in Tokyo, with sales staff communicating with pharmacists via videophones to handle emergency cases.
However, the ministry has warned the company that any sales by this method may be in violation of the pharmaceutical law.
“We can win the growing competition with newcomers from other business sectors, because consumers would be more trustful of products and services offered by drugstores than those offered by convenience stores and discount shops,” Matsumoto said.
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