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UK supermarket giant Tesco clinches Japan exit deal with Aeon

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I have only seen a few Tesco goods in Tokyo. I thought that they were trying to make in-roads into the market. I am a little surprised that they started back in 2003.

0 ( +0 / -0 )

Japanese business infrastructure makes it difficult for all but the most determined of foreign companies to 'make it' in Japan. This really isn'tvery welcoming country in this respect, regardless of what they may say...

10 ( +11 / -1 )

Geoff Gillespie; absolutely spot on. You would not believe the crazy barriers I, and my team have come up against since attempting to form some kind of system here. They do literally everything they can to maintain this long-term damaging system of protectionism. With the yen so high, and the people becoming way more savvy about online shopping from abroad, I gloat when I see the local shops we attempted to deal with going down the drain.

6 ( +8 / -2 )

Spot on Geoff and supersixevo. And until that changes (which it wont because it seems they would rather see the entire country go down the pan than "lose face") nothing else will. Sometimes I feel like Japan is its own worst enemy.

6 ( +8 / -2 )

Overall uniqueness of the retail market (where it is not just about the price) works both ways. Makes it difficult for Walmart and other globally streamlined major retail operations to succeed in Japan while Japanese retailers with products and expertise catered to the local market may struggle overseas. Raising the consumption tax may change the situation. Wonder how Aeon is doing in China.

-1 ( +1 / -2 )

alliswellinjapanJun. 19, 2012 - 08:29AM JST

Overall uniqueness of the retail market (where it is not just about the price) works both ways.

There's nothing unique about the Japanese retail model, Korea ,among others, used to preactice the neo-mercantilist model of using non-tariff barriers through the distribution system and high tariffs on imported foodstuffs to stifle foreign competition.

Korea, although only in the initial stages is dismantling the ancien retail system because it correctly sees that in a developed economy the system stifles development and efficiency.

The Japanese retail market is caught in some sort of 1970's time trap with the consumer's choice limited to either/or (either Nippon Ham or Ham Nippon meat products) overpriced bad quality food products. The system isn't going anywhere fast and with each passing year Japan retreats into the sakoku world of old. Carrefour discovered this and Tescos discovered this last year

If you go into a Japanese supermarket, apart from a few limes and mangoes, you'd be pushed to believe that Japan actually has FTAs with the Phillipines and Mexico.

2 ( +8 / -6 )

Dog: That is indeed part of what I meant. You are saying Japan is not unique yet explaning that it is. It obviously has to do with the distribution system, regulatory protection, consumer mindset, presentation (packaging etc) requirements and numerous other factors. The relatively large size of the market that it has grown into despite its traditional complexities also signifies its uniqueness and the unique challenges seen at both sides of the border (global retailers in Japan and Japanese retailers overseas).

1 ( +2 / -1 )

alliswellinjapanJun. 19, 2012 - 09:06AM JST

Dog: That is indeed part of what I meant. You are saying Japan is not unique yet explaning that it is

Again, there is nothing unique about the Japanese retail model. The Europeans in the 16th Century, through the guild system, were using the same mercantilist model to stifle outside competition.

-2 ( +2 / -4 )

How come costco succeeds here then with all this so called barriers in place?

Any busienss can succedd here if you have the right mind set and determination being flexible also helps.

1 ( +3 / -2 )

ExportExpertJun. 19, 2012 - 09:23AM JST

How come costco succeeds here then with all this so called barriers in place?

Does it?

Some say that Costco is the next one out of the door.

-1 ( +4 / -5 )

Dog: I think I now somewhat understand your argument and suggest we end it through my clarifying that I am only saying the Japan retail market as it stand today is "unique" as compared to the outside world in terms of its overall differences in spite of the relatively large size that it has grown into, and that I am in no way suggesting that it is "original" in that there have never been any similar examples elsewhere or centuries ago with respect to the traditional retail business model at work, while I continue to suggest (and hope you agree) there are numerous other factors involved in creating its overall "uniqueness".

1 ( +1 / -0 )

Agree with all the subsequent comments here. In all my dealings with the Japanese, which have been long and extensive, there seems to be this system of kinky strangle holds and trade barriers wherever you go, which leads to the retail situations you have here.

The rest of the world really is moving on, and leaving these guys behind.

2 ( +4 / -2 )

Yep! It sure didn't take them long to get rid of Carrefour...

-1 ( +1 / -2 )

supersixevoJun. 19, 2012 - 09:59AM JST

The rest of the world really is moving on, and leaving these guys behind

That's the sad part, but what is even sadder is that many in Kamagaseki and Keidanren will be notching this up as another victory for Japan Inc and keeping the foreign devils at bay.

3 ( +8 / -5 )

Tesco have been trying to make it in Japan for years and years - a disappointing albeit expected end to their efforts here. With the talk of opting out of the TPP, looks like the retail market in Japan will plunge even further into the dark ages.

4 ( +5 / -1 )

I would say Costco has a bit more sense than some other retailers, though i can't really say for sure in terms of the Japanese market. Tesco on the other hand is backpedaling with its another venture, Fresh and Easy here in the US, closing some stores. I guess a British company is best suited for its home market. I personally am a big fan of Costco, so i wish them well.

1 ( +3 / -2 )

I have never even seen a Tesco's? Maybe they are not in Kansai, or maybe only in Osaka?

3 ( +4 / -1 )

I have never even seen a Tesco's.

Me neither.

-3 ( +2 / -5 )

the reason Tesco is failing is because it blows

-3 ( +5 / -8 )

Dog costco pulling out?

Rubbish they are opening new stores and siging 40 year leases where is the proof of your claim?

Failure to succeed here is the fault of the retailer trader or what ever, things often are not easy but its a matter of adapting and over coming the percieved barriers, if you cannot adapt then blame the system i guess its the easy way to explain your failure.

Lots of foreign compaines and foreigners come here and succeed.............................................

-2 ( +2 / -4 )

@ExportExpert: Lots of foreign compaines and foreigners come here and succeed.............................................

Which represents a miniscule fraction when compared to the number that come here and fail (mainly due to anal bureaucracy, illogical rules and procedures, xenophobia, excessive cost, and 'unwritten' trade barriers for gaijin)..

OK Costco - An exception to the rule!!!! Remember, even a broken clock shows the right time twice a day...

4 ( +7 / -3 )

dog

have you been to a costco in japan? it's usually chock-a-block. and your comment about "bad quality food products" is the stuff of fantasy. quality control is higher than in most industrialized countries and the allowable limits of radiation is much lower than practically anywhere else in the world. you never hear of salmonella poisoning or food contamination when buyiing food at a supermarket.

-3 ( +2 / -5 )

Readers, please stay on topic, which is Tesco, not Costco.

0 ( +0 / -0 )

I have only seen a few Tesco goods in Tokyo. I thought that they were trying to make in-roads into the market.

They have a japanese supermarket chain, you'll never notice they sell tesco stuff unless you got in.

0 ( +1 / -1 )

Japans new slogan shud be:

JAPAN! Its likely NOT worth the bother!

The slide continues unabated, these "unique" markets are killing itself!

0 ( +2 / -2 )

Failure to do well here is not the fault of others it's the fault of those who fail.

-5 ( +2 / -7 )

smart move. better to go to other asian countries. japan is difficult to make $$ with 50% corporate tax its ridiculous why anyone would want to do business there

0 ( +2 / -2 )

There was a Tesco in Koenji in Tokyo. I heard there was one somewhere else in central Tokyo, can't remember where though. The Koenji place was pretty much all 'Japanese stuff', but just with Tesco price labels on them. There was one shelf that was dedicated to sort-of-UK food - there were some biscuits, etc. Disappointing on the whole though, I was hoping to at least find some Jaffa Cakes.

0 ( +0 / -0 )

As usual, a foreign companies comes in and Japan pulls out all the stops to get rid of it. Heaven forbid the consumers get lower prices and more option. Nope. Protect, protect, protect.

And it isn't a matter of thinking Japan is its own worst enemy, it clearly is!

1 ( +2 / -1 )

We had a Tesco nearby and I honestly couldn't see the point.

It was the same as almost any other small Japanese grocery shop, with a tiny shelf of seemingly random Tesco items.

If a Japanese person went there to experience 'shopping in England's Tesco' they would be sorely disappointed.

It was almost a bad joke... I think Tesco allowed their Japanese partners to call the shots too much and they just ended up with a Japanese style shop of which there are millions already.

Costco on the otherhand offers a very authentic American shopping experience with a good mix of American goods and local goods. That's why it is so successful I think.

3 ( +3 / -0 )

I have a few shares in Tesco and am quite happy they will pull the plug on it's Japanese venture under Tsurakame

0 ( +0 / -0 )

I prefer ASDA to Tesco.

-2 ( +0 / -2 )

ExportExpertJun. 19, 2012 - 11:53AM JST

Dog costco pulling out? Rubbish they are opening new stores and siging 40 year leases where is the proof of your claim?

Look, it doesn't do much for you to do your own research on Costco and their financial well being. Nearly all reports agree that Japan and Taiwan are the weak links for Costco's foreign retail markets and we all know -Carrefour, Boots Tescos - what happens to the weak links that threaten the strength of a retail chain, don't we?

However here is one source http://seekingalpha.com/article/643401-i-m-still-bullish-on-costco

-4 ( +0 / -4 )

Thunderbird2Jun. 19, 2012 - 09:43PM JST

I prefer ASDA to Tesco.

Have you noticed how the ASDA / Seiyu link has recently been broken and all those good ASDA wines have been replaced by Suntory stock, and the ASDA chocolates and crisps have also gone?

Another example of Japan retail retreating in on itself.

-4 ( +1 / -5 )

Japan for the Japanese only.

0 ( +0 / -0 )

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