A focus on becoming globally competitive and consumer focused has paid off for Aeon Group, which today announced it has become Japan's most profitable retailer.

At a Tokyo press conference today, Aeon Group President Motoya Okada announced the company achieved a 16 per cent increase in sales and a 5 per cent increase in profitability over last year, well ahead of its closest competitor. The project is at the midpoint of a five-year programme.

The multi-million dollar project was steered by global retail consultant Kurt Salmon Associates (KSA), which said the successful approach required re-engineering many core processes and dramatically changing the company."

Elements crucial to the programme's success included the transformation of information technology and logistics, as well as many internal processes. The project began in 1997 with the development of a strategy that focused on best global practices, which had never been done in Japan. The key areas included supply chain management, merchandising, logistics and store operations. Software selection and implementation followed, with apparel merchandising systems and Aeon's first distribution centre becoming operational in 2001.

As a result, Aeon has combined global and local operations to improve central inventory management, with strong local and regional controls enhancing customer responses; it will partially replace its wholesaler-based supply chain with direct vendor sourcing; and new in-store systems have improved the retailer's ability to respond more efficiently to consumer demand and sales trends, and to modernize its image.

Aeon Co Ltd is part of the Aeon Group, which has 114 subsidiaries and 34 affiliated companies. The company is engaged in a variety of activities primarily related to the retail business, ranging from superstores, supermarkets to discount stores, department stores, specialty and convenience stores, as well as financial services, restaurants and shopping centre developments. Business activities cover a broad geographical area that includes 11 countries throughout the world, primarily through store operations.