With its strategy of rolling out megastores to drive sales while keeping supply costs low, Japanese discount store group Don Quijote Holdings expects operating profit to reach ¥60 billion (US$537 million) by 2020.

This is 20 per cent higher than its current target. It initially aimed for sales of ¥1 trillion and an operating margin of 5 per cent, but a quick succession of store openings has put Don Quijote on track to achieve its goal earlier.

Sales grew 9 per cent to ¥828.7 billion last fiscal year, while operating profit rose 7 per cent to ¥46.1 billion.

Meanwhile, Don Quijote intends to buy a 40 per cent stake in supermarket company Uny, a subsidiary of FamilyMart Uny Holdings. Some shuttered Uny supermarkets will be converted into Mega Don Quijote stores.