Eyeing U.S. Up

Tokyo-based FamilyMart Co. is looking to expand its upscale convenience stores after last year’s opening of its first locations in West Hollywood and Westwood, Calif.,The Los Angeles Times reported.

The chain hopes to have as many as 30 of its upscale, Asian-inspired “Famima” shops in the Los Angeles area by the end of this year and 250 in the U.S. by 2009.

The Los Angeles Times report continued:

The company is wagering it can carve out a profitable niche by going upscale, plucking liberally from the Asian pantry and serving customers in bright, sleek settings.

“They’re offering something no one else does in a convenience-store format,” said Adam Sindler, an analyst at Morgan Keegan & Co. “They’re really going beyond convenience stores’ core offerings: cigarettes, beer, hot dogs, coffee.”

FamilyMart stresses hospitality with its one-on-one “smile training” for its employees in Japan and the two exclamation points in the Famima logo. (The name is a contraction of the corporate moniker.)

FamilyMart faces other challenges. Some customers have wrinkled their noses at the prices, pointing to such items as $25 canisters of tea bags. Analysts say the company also must overcome obstacles that typically accompany entering a new market, such as a lack of name recognition and nuances in customer preference.

That’s particularly significant for convenience stores, where limited inventory leaves little room for error. FamilyMart’s formula appears to be winning converts. On a recent Friday afternoon, the Westwood Famima was humming with activity.

“It’s fabulous,” said Cassie English, 22, a legal assistant who had wandered into the store for the first time. Toting a basket filled with Kettle brand chips and Annie’s organic pasta shells, she said, “7-Eleven is convenient but, you know, this sort of combines convenience with gourmet food.”

Another twist on the traditional convenience-store model: modern design. Dark wood floors offset stainless-steel counters, and lime-colored walls and mango-hued signs add pop. Hand rolls are displayed on bamboo trays, and signs identify unfamiliar items.

“You never see American people saying they would like to go out to a convenience store to buy things, but people in Japan do all the time,” said Hidenari Sato, chief operating officer of Famima Corp., the Torrance-based FamilyMart subsidiary responsible for U.S. expansion. “We thought this kind of concept could come to the U.S.”

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