Food retail in Japan - statistics & facts
Food and beverage retailing is the largest industry within the Japanese retail sector and, along with food wholesale, makes up one-third of the food industry. As an intermediary between consumers and food producers, retailers supply even the smallest neighborhoods with fresh produce and processed foods. However, despite stable food sales in recent years, economic stagnation and food price inflation are slowing the growth of the industry.
Nonetheless, the food and beverage retail landscape is one of the most diverse in Japan. Apart from grocery stores, food is also stocked in convenience stores, department stores, drugstores, specialty retailers, and with a limited selection in 100-yen shops and DIY retailers. Convenience stores, which commonly blend into neighborhoods, are popular for quick shopping trips. Department stores, on the other hand, play a significant role around Christmas and New Year, when family households order Christmas cakes and traditional New Year food (o-sechi). Outside the holiday seasons, department stores mainly stock gourmet and convenience foods.
The weakening yen has been driving up production costs in the agricultural sector, which is reliant on imported feed and fertilizers. Similarly, the reliance on imported energy and raw materials is a cause for rising costs in the food manufacturing industry. As businesses pass on price hikes to consumers, Japanese household spending on food reached a decade-high in 2023. While private labels and store brands benefit from the focus on the price tag in shopping decisions, declining consumer confidence affects higher-priced segments like agricultural produce from organic production.
Where to buy food in Japan?
Grocery stores are at the center of food retailing in Japan. They combine a large assortment of fresh and processed products with other non-food daily necessities, which gives them an edge in the competition with other food sales channels. Even though producers and manufacturers have been exploring online sales to reduce the dependence on supermarkets, the low e-commerce penetration rate is an indication of the challenge online retailing is facing to consolidate its position.Nonetheless, the food and beverage retail landscape is one of the most diverse in Japan. Apart from grocery stores, food is also stocked in convenience stores, department stores, drugstores, specialty retailers, and with a limited selection in 100-yen shops and DIY retailers. Convenience stores, which commonly blend into neighborhoods, are popular for quick shopping trips. Department stores, on the other hand, play a significant role around Christmas and New Year, when family households order Christmas cakes and traditional New Year food (o-sechi). Outside the holiday seasons, department stores mainly stock gourmet and convenience foods.
Food price inflation
Consumer prices in Japan have been rising rapidly at a level the country has not experienced in decades. Declining self-sufficiency and a shrinking agricultural sector amid population decline has been putting pressure on the domestic food industry. Recent global crises and exchange rate fluctuations have further exacerbated the situation, as food prices, especially for fresh goods, have increased rapidly.The weakening yen has been driving up production costs in the agricultural sector, which is reliant on imported feed and fertilizers. Similarly, the reliance on imported energy and raw materials is a cause for rising costs in the food manufacturing industry. As businesses pass on price hikes to consumers, Japanese household spending on food reached a decade-high in 2023. While private labels and store brands benefit from the focus on the price tag in shopping decisions, declining consumer confidence affects higher-priced segments like agricultural produce from organic production.
