FamilyMart, Circle K in merger talks

Japan’s third and fourth largest convenience store chains are to enter merger talks this week.

A merger of FamilyMart, Circle K would create the second largest c-store business in the nation, second only to Seven & I Holdings’ 7-Eleven network, and overtaking Lawson.

The combined sales of FamilyMart, Circle K would equal ¥2.62 trillion, according to The Japan Times. That’s more than the ¥1.76 trillion of Lawson, currently second in the market, yet still trails the massive lead of Seven-Eleven Japan’s ¥3.78 trillion.

FamilyMart and Circle K parent Uny Group, operated 17,599 stores across Japan as at the end of January – almost the same number as Seven-Eleven, which had 17,491 as of February 28.

 

Sources have told the Japan Times that merger talks will start today, March 9.

“FamilyMart and Uny Group will spend up to one year discussing how they could reduce costs and improve competitiveness through merging,” the newspaper reported.

Analysts say a merger would mark another step in the restructuring of Japan’s retail industry which is struggling to overcome a shrinking population, stagnant economy and falling retail sales. Merging the two companies’ behind-the-scenes operations, such as logistics and warehousing, would reduce overheads and potentially rival the supply chain operations of Seven & I and grocery giant Aeon.


FamilyMart’s largest shareholder is Itochu Corporation, which also has a three per cent stake in Uny Group.

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