Can Shopping Refugees Be A New Business Chance?

Osaka – Sunday, May 23, 2010

A recent popular morning TV news programme in Japan reported on a new social issue of “Shopping Refugee”. This is as a result of aging society, nuclear family and strategy/M&A of retailers (supermarkets). Possible new products and services could help shopping refugees if they can afford such new products and services.

1. What are “shopping refugees”?

Shopping refugees are those people who are forced to do shopping at large supermarkets that are far to go on foot instead of local shopping areas which are only a few minutes walk. Most shopping refugees are elders living alone (i.e. not with their children) in not scarcely-populated regions but in comparatively large cities of local region.

2. What is the traditional shopping style vs. new shopping styles of younger generation in Japan?

1) Traditional shopping style of today’s elders

Japanese people used to shop almost daily at nearby shops of groceries, greengrocers, fish and meat shop etc. and/or local small supermarket in local shopping areas on foot. Typical housewives used to do all her housework in the day and decide what to cook for dinner (evening meal) and go shopping on foot then cook. Elders today are used to this shopping style.

2) New shopping styles of younger generation

There are varieties of styles, with diverse lifestyle of younger generation. Some people shop in traditional style, similarly to how their mother and grand mothers used to. Some others position shopping as their leisure and shop during day time. Some others, especially people who work, shop at late evening. And some others mostly shop at weekends, buying foods for an entire upcoming week.

Depending on where they shop, some people walk to the supermarket, some go by bus and some drive to shop.

3. What are the factors for then change in shopping styles and emergence of shopping refugees?

1) Large retailers/supermarkets and their M&A

In line with economic growth of Japan, large supermarkets such as Daiei, Aeon, Jusco and Saty emerged and expanded their business aggressively nationwide. This completely changed the retailing industry map in Japan and also the places where majority of the population do shopping.

Such large supermarkets first opened their shops in city centre such as shopping mall in the front of the stations then to shopping area of residential area which housewives still could go on foot. A few such supermarkets now are open until late at night (e.g. 22:00 and even 24:00 for some) to meet their customer needs of today. Then, many large ones opened in suburbs which the transportation would be car.

Together with low birthrate meaning decrease in total population, retailing industry became saturated, leading to restructuring and M&A of the industry and each retailers. This has resulted in closing of supermarkets in shopping area in cities higher proportion of large ones in suburbs.

2) Nuclear family

In line with economic growth, more people stopped living with their parents (elders) after marriage and nuclear family became pervasive. There are many reasons and backgrounds to this, such as less jobs are available local regions, more people working companies that operates nationwide and/or worldwide meaning more people are re-located, change in values and attitudes in majority of Japanese people to name just a few.

3) Aging society

Attributing to low birth rate, Japan has become one of the countries suffering from severe aging society. And together with pervasive nuclear family mentioned above, this resulted in many elders living alone, forced to look after themselves, including daily shopping.

4) Car society

In line with economic growth, car became popular, and going shopping by car became popular for some families, both in large cities where there are good public transportation and local regions where car is the only transportation for families.

5) Working women and mothers

With economic growth then recession of the last 2 decades, and introduction of “Equal Opportunities for Both Men and Women” started in 1985, females started to continue working after marriage and even after having children, although proportion still remains low compared to western countries. Many such working mothers were forced to do shopping at weekends for successful time management, and even full time housewives became more flexible in their shopping style.

4. What is the case of Takaoka City in Toyama Prefecture introduced in the TV programme?

1) Shopping refugees

Examples of shopping refugees introduced in the TV programme were all elders living alone or with her husband but not living with their children. They used to enjoy shopping everyday to nearby shopping area within five minutes walk from their house.

However, with recent closing of the shops they used to go for shopping everyday, they now need to go shopping by bus to supermarkets which are 1.5km to 2.0km from their house. This is a burden for them, in terms of both physically (catching bus and getting on and off the bus) and financially (bus fee).

This was not mentioned in the TV programme but the author assume that the shopping refugees would also miss the communication they had everyday with the local shop owners and staff members during shopping. The local shopping area had been one of the important local community and shopping refugees would no longer benefit of such community and daily warm interaction.

2) Change in Takaoka shopping environment

First, large retailer of Daiei opened in the front of the station, then Saty, another larger retailer opened its supermarket in more residential area, attracting big pie of the shopping population.

Then, Aeon opened a huge supermarket with large car parks in suburb, which attracted shoppers that used to go to Daiei and Saty, so Daiei closed its supermarket. Saty was acquired by Aeon. Opening of Aeon’s huge supermarket led to closing the traditional shops in the shopping area of that shopping refugees used to go as well.

5. What are possible solutions to save shopping refugees?

1) New delivery service

Delivering supermarket products for shopping refugees can be a possible solution. According to the TV programme, a NPO started to help shopping refugees by delivering what they bought from Aeon.

From this, the author sees a great business opportunity for Aeon. They could start a new delivery service for their customers including shopping refugees and other customer segments who need such services.

Also, the author thinks that similar service can be provided by others such as gasoline stations that are having difficulties for survival, convenience stores, and delivery service companies including JP Service as their new business.

Another possibility of provider of this kind of service is a versatile service provider. A self-employed business owner near the author’s house provide varieties of services requested by his customers as long as he can provide (such as repairing things, doing housework, taking dog for a walk, MC of wedding and other ceremonies to name just a few) and he also will do shopping on behalf of his customer per request.

2) New product

New product meeting shopping refugees is another possible solution. For example, ingredients for breakfast, lunch and evening meal can be a new product as a substitute and delivered everyday to the shopping refugees and other households per request. This new business has actually been proposed and started, first targeting busy working mothers, which can be targeted to shopping refugees.

6. What are the author’s thoughts to conclude?

Changes in shopping environment are unavoidable, and together with many other factors, shopping refugees are unavoidable but can be a great business opportunity for many companies and business owners, by creating new businesses (products and services). However, whether such new businesses truly solve problems of the shopping refugees depends on their financial affordability and whether they can continue to enjoy interaction with the local community.