Retailer Aeon wants to expand in Asia

Aeon is Japan's biggest retailer. Aeon's supermarkets and shops bring in a yearly revenue of 3.6 trillion yen (26 billion Euro). The sales decline, which came after the VAT-increase in April, has affected the company's profits more than expected, reports the German website japanmarkt.de. Profits fell in the last quarter by 35% to 22 billion yen. Bottom line profit decreased by 90% to a meagre 1.3 billion yen (9 million Euro). Aeon, which is more than 250 years old and originally from Chiba, has assets on hand however.

In the last few years Aeon was able to increase it's revenue and profit through expansion to other Asian countries. The slight deflation in Japan and the decreasing population reduce the prospects of profit in the domestic market. This is why Aeon is opening new branches in countries like China, Indonesia and Thailand. In Malaysia Aeon was able to climb to number two in the country through acquiring Carrefour-supermarkets.

Aeon has recently been investing strongly in the agricultural economy in Japan. At the moment Aeon runs 14 agricultural companies totalling 230 hectares. Aeon wants to double their land size by 2016. These companies mostly grow cabbage and spinach. In five years time Aeon became the largest vegetable producer of Japan. However, Aeon only produces 1% of their fresh products themselves, which leaves ample expansion opportunities. Considerable cost savings can occur through building a value chain from the fields and greenhouses to the supermarkets. That should support sales and profits.