---
title: "Chasing 7-Eleven and Aeon: What Drives This Famous Discount Store?"
description: "As department stores lose their appeal and convenience stores and general merchandise supermarkets hit bottlenecks, the next protagonist in Japan's retail market may be surprising: Don Quijote. Its parent company, PPIH, has achieved 36 consecutive years of sales growth during Japan's 'lost three decades,' closing in on 7-Eleven, Aeon, and Uniqlo. In 2024, over 20% of the 36.86 million foreign visitors to Japan shopped at Don Quijote, and its tax-free sales reached 84.6 billion yuan, surpassing department store giant Isetan Mitsukoshi."
author: "联商网编辑部"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-08-27"
categories: "Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/ZsSJ9Eezi5ei1pnr_CVhwQ"
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citation: "联商网编辑部. “Chasing 7-Eleven and Aeon: What Drives This Famous Discount Store?.” New Distribution, 2025-08-27. https://xinjignxiao.com/en/articles/chasing-7-eleven-and-aeon-what-drives-this-famous-discount-store-ffad9c52/"
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---

# Chasing 7-Eleven and Aeon: What Drives This Famous Discount Store?

> As department stores lose their appeal and convenience stores and general merchandise supermarkets hit bottlenecks, the next protagonist in Japan's retail market may be surprising: Don Quijote. Its parent company, PPIH, has achieved 36 consecutive years of sales growth during Japan's 'lost three decades,' closing in on 7-Eleven, Aeon, and Uniqlo. In 2024, over 20% of the 36.86 million foreign visitors to Japan shopped at Don Quijote, and its tax-free sales reached 84.6 billion yuan, surpassing department store giant Isetan Mitsukoshi.

### **Source** | New Retail
Department stores are no longer attractive, and convenience stores and general merchandise supermarkets are hitting bottlenecks. So, who is the next protagonist in Japan's retail market?
The answer may be surprising: Don Quijote.
During Japan's "lost three decades," Don Quijote's parent company, PPIH, achieved 36 consecutive years of sales growth, closing in on 7-Eleven, Aeon, and Uniqlo, becoming a "miracle" among listed Japanese companies.
Data shows that in 2024, foreign visitors to Japan reached 36.86 million, with over 20% visiting Don Quijote. This means that one in five tourists walked into this discount store. Its tax-free sales in the latest fiscal year reached 8.46 billion yuan, even surpassing department store leader Isetan Mitsukoshi.
Recently, PPIH announced its "2035 Doubling Plan," setting a quantitative target of exceeding 4 trillion yen (approximately 200 billion yuan) in sales by fiscal 2035, and planning to "dominate the Japanese market" over the next decade. How will this retailer, known for discounts, achieve this grand vision?
**Early Positioning for the "Next Decade" Retail Market**
Currently, PPIH's business consists of four segments: discount store operations (62.1%); general merchandise supermarket operations (19%); overseas operations (15.5%); and other operations (3.4%). Clearly, Don Quijote is the group's mainstay.
As of the fiscal year ending June 2025, PPIH's sales reached 2.2468 trillion yen (approximately 109.2 billion yuan), up 7.2% year-on-year, achieving 36 consecutive periods of revenue growth. Among these, combined sales from discount stores and general merchandise supermarkets reached 1.9155 trillion yen (approximately 93.2 billion yuan), with an operating profit margin of 7.3%.
According to PPIH's assessment, Japan's retail market is expected to expand to 130 trillion yen (approximately 6.33 trillion yuan) by 2035. Within this large pie, the discount format is projected to account for about 16% of the share.
In recent years, inflation and declining real wages in Japan have increased the low-income population, making consumers more focused on "saving money" and "convenience." Meanwhile, the rise in dual-income households has driven strong demand for ready-to-eat and time-saving products. At the same time, the aging population with fewer children and regional population decline are accelerating retail industry consolidation, with succession challenges and cost pressures making M&A possible.
On the other hand, the increasing number of foreign residents brings new demand, and inbound tourists are highly anticipated. More importantly, the narrowing information gap makes consumers more focused on "true prices," shifting from branded goods to high-cost-performance alternatives, and from dining out to home dining. These trends naturally align with discount retail.
In response, PPIH has planned a grand goal of "dominating Japan" over the next decade. The company requires existing stores to continuously drive sales and achieve stable same-store growth. PPIH has also elevated its tax-free business to a strategic level, aiming to build a retail system specifically for tourists.
**Intensifying "Food Battle" Among Chain Supermarkets**
As of June 2025, PPIH operates 779 stores globally, including 655 in Japan, 76 in North America, and 48 in Asia (excluding Japan). In the Japanese market, its stores mainly consist of two brands: 525 Don Quijote main stores and 130 UNY general merchandise supermarkets.
Undoubtedly, PPIH's years of experience in the discount retail battlefield have formed unique business advantages: Don Quijote's product planning capabilities, UNY's fresh food procurement strengths, and operational expertise. Currently, the group's operating profit margin remains relatively high, providing a solid foundation for further expansion in the food business.
Currently, Japan's food industry has several trends:
First, according to the Japan Supermarket Association, although supermarket sales in Japan grew for three consecutive years in 2024, the essence was "price over volume"—customer numbers decreased, purchase items declined, but unit prices rose. The real driver of growth was food: general food and fresh agricultural products grew by 4.5% and 4.4%, respectively, becoming pillars offsetting industry weakness.
Second, the boundaries between retail formats are becoming increasingly blurred. For example, drugstore chain Cosmos has food sales accounting for nearly half, and GENKY even reaches 70%. At the same time, the three major convenience store chains (7-Eleven, FamilyMart, Lawson) are also strengthening fresh food elements and continuing to focus on frozen foods and prepared meals.
Third, chain supermarkets are showing an "oligopoly" trend. In core commercial areas, chains like Aeon, LIFE, and OK are steadily advancing store opening plans and gradually expanding their market share. This trend is squeezing the survival space of local small and medium-sized supermarkets and food stores in shopping streets.
In short, whoever can go deeper and stronger in "food" will grasp consumers' daily needs and firmly hold the initiative.
UBS Securities Japan analyst Takahiro Kazahaya said that profit gaps among retail companies are widening, and companies like PPIH and OK Supermarket have already built mature profit models, making survival of the fittest and strategic integration inevitable trends. PPIH's plan is precisely a forward-looking layout for Japan's retail market over the next decade.
**Creating a "Food-Oriented" Don Quijote**
As mentioned earlier, PPIH plans to "dominate Japan." This is not empty talk.
To date, Don Quijote has opened stores in all 47 prefectures of Japan. PPIH's goal this time is clear: to fill gaps and cover blank areas in regional markets. The company will focus on three types of stores: roadside stores, urban railway line stores, and tourist-specific stores. By then, the group's total store count is expected to exceed 1,000.
Among these, the new format store "Food-Oriented Don Quijote" is undoubtedly the highlight.
Strictly speaking, Don Quijote has previously attempted a composite format of "food supermarket + discount store," but these were more format integrations rather than establishing an independent, standardized brand. In existing stores, food category sales account for only about 30%, far below typical food supermarkets.
According to PPIH's plan, the new format will completely overturn Don Quijote's original model, increasing the food share to 60% and reducing non-food share from about 65% to 25%. Its fiscal 2035 target is to open 250-300 stores, with net sales of 600 billion yen (approximately 29.17 billion yuan), operating profit of 36 billion yen (approximately 1.75 billion yuan), and an operating profit margin maintained at around 6.0%.
It is reported that the "No. 1 store" will be converted from the group's "PIAGO Supermarket." The store will mainly be one to two stories, with an area of about 1,650 square meters, similar to the scale of ordinary food supermarkets. The new store is expected to open in early 2026, and the brand name has not yet been finalized.
The new store will have a kitchen providing freshly prepared meals and will be positioned as "discount fresh food." However, its biggest highlight is not only offering highly price-competitive daily food but also retaining Don Quijote's "treasure hunt" shopping DNA. The store will also display its private brand products, beauty, and household items, a "treasure hunt" experience that ordinary food supermarkets cannot match.
Although food is discount-priced, maintaining a relatively high non-food sales share can effectively curb the decline in gross margin. Higher sales also help spread fixed costs and reduce selling, general, and administrative expenses. Therefore, the company expects the new format stores to increase both sales and operating profit by 1.5 times, reaching about twice the profitability of ordinary supermarkets.
**Final Thoughts**
From the external environment, rigid consumer demand is gradually shifting toward food, and the potential of discount retail will become more prominent over the next decade. Internally, Don Quijote's success in general merchandise and non-food categories has proven its unique advantages in product planning and operations, and entering the food market is a natural choice for expanding its territory.
It is foreseeable that the core competition in the retail market is shifting from "who can create more surprises" to "who can better meet daily needs." Food is a representative of high-frequency, rigid demand. Once Don Quijote's new format succeeds, it may not only reshape the supermarket industry landscape but also potentially change the ranking of Japan's retail giants.


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## Citation metadata

- Publisher: New Distribution
- Author: 联商网编辑部
- Published: 2025-08-27
- Canonical: https://xinjignxiao.com/en/articles/chasing-7-eleven-and-aeon-what-drives-this-famous-discount-store-ffad9c52/
- Original source: https://mp.weixin.qq.com/s/ZsSJ9Eezi5ei1pnr_CVhwQ

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