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One caveat about the Bento and other hot food items that I should explain. These are high margin on their own (particularly Oden, believe it or not, which have
by hkmurakami 10y ago
One caveat about the Bento and other hot food items that I should explain. These are high margin on their own (particularly Oden, believe it or not, which have a gross margin of 50% [1]), and were a boon to the industry in its expansion years.
But with increased competition from a higher density of convenience stores, as well as other competing sectors (super markets, fast food, etc.), the inventory turnover rate has dropped from its peak years, and since these food items are perishable, it's now a point of risk for convenience stores who are expected to carry the items but have uncertainty over how they'll be able to clear inventory.
(by the way you're also spot on about the soft drinks. Also, copies have 70% margin)
[1] fascinating article about the finances of Oden operations and how scale is the make or break factor. http://thutmose.blog.jp/archives/18955371.html http://thutmose.blog.jp/archives/18955371.html
- patio11 10y agoIf you are ever wondering "Hmm, this is in Japanese; I wonder if it is appropriate for HN" about links like that please err on the side of posting more of them. That is one of the most interesting things I've read about business in the last several months. (Summary: a deep dive by a convenience store operator on the microeconomics of offering a particular seasonal dish in Japan, in particular vis the logistical difficulties, cost structure of the offering, and knock-on effect it has on the conveniences store's other business.)
- hkmurakami 10y agoWill do :) Appreciate the encouragement.
- huskyr 10y agoI'd love to read that article, but it's in Japanese :(
- berntb 10y agoI wish the online Japanese translation was better. The convenience store chains selling Oden should realize where a sure growth area is -- Europe.