For a Little Bit of the Real Japan, You Can Shop Yaohan : Grocery: The Japanese supermarket in Costa Mesa is getting high marks from Orientals and others after a year of operation.
A week doesn’t pass without Muneo Adachi of Mission Viejo making a trip to the Yaohan Supermarket in Costa Mesa.
Adachi, president of Canon Informations Systems Inc., doesn’t mind the long drive to his favorite grocery store. For the Japanese executive, Yaohan (pronounced yeow-hahn) is the closest thing to home.
There he can shop for groceries, rent Japanese-language video movies and select current books or magazines written in Japanese characters. He can even have an East Asian lunch at one of five restaurants.
American Gregory Triggs, another Yaohan regular, said he makes the drive from Long Beach because it is “about the only place that has a wide variety of Japanese ethnic products. And I like eating in a nice, clean place--the restaurants there are impeccable.”
Seventeen months after Yaohan opened for business in Costa Mesa, it has become a magnet for Japanese expatriates and Americans alike, according to Yoshinobu Koga, manager of Orange County’s largest Japanese supermarket. Besides giving Americans a taste of the Far East, customers can buy Japan’s latest rage in electronic toys and kitchen products along with such mundane U.S. staples as paper towels, detergents and canned tuna.
The 41,000-square-foot mega-market, complete with a bookshop, beauty salon and travel agency, is one of six supermarkets that Yaohan has opened in America since 1983. All the supermarkets are located in Japanese enclaves on both U.S. coasts, including Los Angeles’ Little Tokyo district, and in Torrance, Fresno, San Jose and Edgewood, N.J.
Customers like Arthur Nakazato, a Japanese-American attorney from Newport Beach, said the service he receives from Yaohan employees is far better than at rival U.S.-chain supermarkets.
Koga said that when he took over the Costa Mesa store, his company’s strategy was to target the rising number of Japanese expatriates and Japanese-Americans in Orange County. The customer base for a typical Yaohan market is more than 80% Japanese immigrants and Japanese-Americans, with the rest being Koreans and Chinese. But the makeup of the supermarket’s Costa Mesa customers has befuddled many Yaohan executives. Here, half the customers are Caucasians, Koreans and Chinese.
“We didn’t think Orange County would be any different, but we were wrong,” he said.
According to officials at Los Angeles-based Yaohan U.S.A. Corp., the Costa Mesa operation in its first year of operation has been among the best revenue-producing stores in its U.S. chain. Last year’s sales were $12.5 million, or $434.61 per square foot. In fact, the company is projecting that the Costa Mesa operation’s revenue will grow 20% this year, leading its five other U.S. stores.
Masayuki Nozue, director of Yaohan U.S.A., said the Orange County operation is successful, at least in part, because more people are now familiar with the company’s name than was the case eight years ago, when the company began doing business in Fresno.
“We’re not an ordinary supermarket. We’re a hyper-market. We have everything under one roof,” said Yoshiya Watanabe, research and development manager at Yaohan’s Little Tokyo office.
Yaohan’s parent, Yaohan Department Store Co. Ltd. of Numazu, Japan, is known as a maverick among Japanese retailers, Nozue said. Last summer, the company split off its international division, which accounts for 40% of corporate revenue, into a separate unit and moved its headquarters to Hong Kong to escape Japan’s steep corporate tax. The company, with most of its 115 markets in Japan, also wanted to tap the growing China market and wanted to use Hong Kong as a base to plan a rapid expansion.
Yaohan Department Store’s 1990 revenue was $2.2 billion, up 23% from 1989 sales.
Now that Yaohan officials believe its markets have gained some popularity among Americans, Nozue said, it will open two markets this year: a modest 9,500-square-foot grocery in San Gabriel in August and a 60,000-square-foot market in Chicago in November. “I think they’re ready for our kind of grocery,” he said.
Next year, Yaohan plans to open a second market in Torrance and its first European operation--in London--in time for the unification of the European Community. Its first Canadian supermarket is slated for Vancouver in 1993.
“I expect international sales will make up half of our yearly sales in the next two or three years,” said Shigeyuki Sato, an executive in the international division of Yaohan in Japan.
Despite the first year’s success, store manager Koga in Costa Mesa said that training his non-Japanese staff in Orange County was the toughest period of his career.
He taught six Latino butchers, who had experience at American meat counters, to master the art of slicing paper-thin beef and cutting fish fillets the Japanese way to minimize waste and to remove all bones. Koga’s cleanup crew, largely made up of Latino and Asian-Americans, were instructed to work efficiently in starched uniforms with minimal interaction.
The turnover rate among employees was high during the initial months, he said, because most workers were not familiar with the rigors of Japanese management--long working hours, few promotions and constant attention to details. But he learned to work with a multiethnic work force of about 80 full-time employees.
“The most difficult part of my job now is to take care of customer complaints,” he said. “Most complaints come from Americans not familiar with Japanese food.”
Some younger Chinese-Americans who purchased a Japanese delicacy called natto, a form of fermented soybeans with a distinctively strong smell and brownish color that is usually eaten with soy sauce and green onions, later returned it because they thought it was spoiled.
“I understand it takes time for foreigners to get used to the taste of some Japanese food,” Koga said. “That’s why I accept the foods returned by our customers even though there’s nothing wrong with them.”
YAOHAN SUPERMARKETS
Sales per square foot at three of six grocery stores opened by Yaohan U.S.A. in this country exceed the U.S. average by a wide margin. Results for the Costa Mesa store are for its first year in operation.
Space 1990 Sales Annual Sales Locations (sq. ft.) (millions) (per square foot *) Employees Torrance 19,809 $12.0 $767.54 70 San Jose 12,428 12.0 586.66 70 Los Angeles 79,893 24.5 582.78 120 Fresno 28,482 8.0 485.62 35 Edgewood, N.J. 92,751 32.0 459.51 130 Costa Mesa 40,910 12.5 434.61 80 U.S. Average **40,000 NA **491.40 NA
* Grocery space only
** 1989 figures
Sources: Yaohan U.S.A. Corp. and Food Marketing Institute
