What This Lesson Is About
The surprising answer to the question ‘What sells most at a Japanese drugstore?’ is often food, not medicine. Yet groceries usually carry lower gross margins than over-the-counter medicine, cosmetics, and many personal-care products. Food also creates extra work: shelf replenishment, temperature control, expiration-date checks, storage, and waste management.
Why, then, are Japanese drugstore chains expanding their food departments? The goal is not simply to earn a large profit on milk, eggs, bread, frozen foods, or natto. Everyday groceries give shoppers a reason to visit more frequently. Once customers are in the store, they may also buy medicine, cosmetics, shampoo, detergent, and other higher-margin items. The retailer combines ‘traffic-driving products’ with ‘profit-generating products’ and manages profitability across the entire basket and the entire store.
Not every chain follows the same formula. MatsukiyoCocokara emphasizes beauty products and high-traffic urban locations. Genky and Yakuodo standardize stores and logistics so that smaller rural markets can still be profitable. This lesson connects product mix, visit frequency, average transaction value, location, logistics, inventory, customer data, and operating costs. It concludes by applying the same logic to fashion retail.
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