Japan's Pain Is Wal-Mart's Gain

Keikichi Miyakawa says he earned about $50,000 a month selling pricey golf club memberships during Japan’s bubble economy in the 1980s. Now on a pension, the 65-year-old Tokyo resident shops at Seiyu, the discount chain owned by Wal-Mart Stores. He recently bought packs of bean sprouts for 29 yen (36¢), and croquettes for 49 yen (60¢) as part of the store’s Mainichi Kakaku Yasuku promotion. That’s the Japanese translation of Wal-Mart’s “every day low prices” slogan.

With Japan’s economy on the cusp of a third recession since 2008, and household incomes falling for the last three years, the country’s famously picky and brand-enamored shoppers are in a bargain-hunting mood. Discount stores are gaining and Wal-Mart, after years of mixed results and a 20.9 billion-yen loss for Seiyu in 2007, is expanding for the first time since November 2008. Wal-Mart’s Japan business saw net sales rise 2 percent during the second quarter. Its Seiyu unit, which it’s owned outright since 2008, will open seven new stores this year and three more in 2013. Wal-Mart’s head of international business, Doug McMillon, has said the company will even consider acquisitions to increase its presence in Japan.