Japan Co-ops Endure Recession, Innovate

Editor's note: Information below is taken from the English-language newsletter of the Japanese Consumers' Co-operative Union (JCCU); their website is located at http://www.coop (click "English"). --D.G.

Years of recession have led to shrinking sales for most of the grocery industry in Japan. Consumer food co-ops, the largest such sector in the world, reflected this pattern but not as markedly; total sales for FY 2000 and 2001 were 98.3 and 99.2 percent of the previous year, respectively. However, tighter management has enabled Japanese consumer co-ops to increase membership number and share capital, and a higher percent of the co-ops showed a profit in the past year.

Recession aside, Japan's amazing co-op numbers continue to make the U.S. look underdeveloped. Membership nationally totals over 21,000,000; members of retail co-ops account for 90 percent of that total. Of the retail members, more than one-third are in Han groups, three or more neighbors who order together. Like U.S. buying clubs only more urban and smaller, Han (joint purchase) groups number over 1,500,000 and have some 7,000,000 members. There also are 2.4 million members of medical co-ops and over 800,000 members of housing and insurance co-ops.

JCCU Member Results for FY 2001
(4/2001 - 3/2002)

  Unit 2001 01/00
(Divide by 125 for approx. dollar equivalent)
Number of member co-ops 578 98.5
   Retail co-ops 450 98.9
   Medical co-ops 118 99.2
   Housing & insurance co-ops 10 76.9
Membership thousand 21,350 101.5
   Retail co-ops thousand 18,123 102.4
   Medical co-ops thousand 2,389 105.7
   Housing & insurance co-ops thousand 838 77.6
Han groups (*1999 figures) thousand   *1,634
Han members thousand   *7,184
Han members ÷ total membership %   *36.7%
Total turnover billion yen 3,257 99.2
   Retail sales billion yen 2,905 99.1
   Service and other sales billion yen 352 100.4
Total turnover of retail co-ops billion yen 2,987 99.0
   (Purchase/month/member) yen 13,896 97.8
   Retail sales, all retail co-ops billion yen 2,905 99.2
   (Retail outlets sales) billion yen 1,317 96.5
   (Joint buying sales) billion yen 1,510 102.0
   Service and other sales billion yen 82 92.4
Total turnover, medical co-ops billion yen 262 102.6
Total turnover: housing, insur. billion yen 8.7 76.9
Share capital billion yen 533 104.9
   Retail co-ops billion yen 480 105.0
   Medical co-ops billion yen 51 107.1
   Housing & insur. co-ops billion yen 3 76.9
Share capital/member yen 24,986 103.4
   Retail co-ops yen 26,470 102.5
   Medical co-ops yen 21,227 101.3
   Housing & insur. co-ops yen 3,620 99.1
Co-op bonds billion yen 104 96.0
Number of retail outlets 2,364 96.7
Sales area square m. 1,549,883 98.8
Number of full-time employees 54,323 98.1
JCCU wholesale amount billion yen 283 101.5

Total turnover (revenue) by these co-ops was 3,257 billion yen or over 25 billion dollars. There are about 450 retail co-ops with 2,364 outlets.

Mostly located in dense, urban settings, Japanese food co-ops have seen strong growth in the relatively new fields of home delivery services and Internet ordering. Sales through Han groups, the traditional non-store sales outlet, actually are decreasing and are at their lowest in more than ten years. Home deliveries are growing and account for a total of 300 billion yen (over 2 billion dollars) annually. Delivery fees have been reduced over time; in Tokyo the fee is only 180 yen. A minimum of 60 deliveries per day is said to be the break-even point.

Internet operations work for the co-ops because members are able to procure through established home delivery and joint purchasing systems. An Internet platform offered by JCCU to co-op members in 2000 now has 55,000 registered members in 13 co-ops. Kyoto Co-op in its first year of joint purchase orders via the Internet had 350 million yen in sales through the system. Ordering, product information, member comments, co-op news and activities -- all are transmitted to or from home or work or mobile phone.

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