JAPAN CHAIN'S STORE BRAND HITS 15% OF SALES

TSUKASA FURUKAWA

TOKYO (FNS) -- Private-brand business has grown to 15% of total sales at Daiei Inc., Japan's largest supermarket chain, compared with a Japanese average of 2%, Isao Nakauchi, chairman and president, said here.

Nakauchi, in a speech presented at the World of Private Label in Asia trade show here, said his firm's ongoing commitment to store brands is fueling the increases. The event was sponsored by the Private Label Manufacturers Association, based in New York.

Nakauchi stressed three elements that have been vital in the chain's private-label program: long-term planning and execution, a firm commitment by top management and continuous communication among retailer, customer and supplier.

Daiei now sells its Savings private-brand products in 12,000 stores under its control. Sales of private-brand merchandise accounted for only $50 million in 1980 at Daiei but they soared to $1 billion in 1995.

Ice cream from New Zealand or photo film from Germany are among many products that are imported directly by Daiei for sale under private labels. The company now has 16 liaison offices overseas.

Nearly 100 companies from the United States, Europe, Hong Kong, Singapore, South Korea, Taiwan and Japan showed private-label products in 140 exhibit stands at the trade event held in Makuhari Messe convention hall, east of Tokyo. The two-day show held Jan. 24 and 25 drew more than 3,000 visitors, many of them managers and buyers for Japanese supermarkets and mass merchandise stores.

On display were a wide range of products including food, beverages, vitamins, cosmetics, personal care, general merchandise, pet food, baby care and household cleaners.

Brian Sharoff, president of PLMA, stressed that Japanese interest in private brands is growing.

Daiei and other major supermarket chains are becoming "serious about making private brands a major strategy," Sharoff said.