[Company analysis] Don Quijote Co., Ltd. (ドン・キホーテ)

「Don Quijote Co., Ltd.  (ドン・キホーテ)」operates a comprehensive discount store and supermarket business in major cities and regional cities in Japan, mainly in the Kanto region. It is famous for its unique display methods and sales floors, and it has approximately 280 stores nationwide centering on the Tokyo metropolitan area. This company has the largest sales in Japanese discount store industry. The number of consolidated employees is approximately 13,546.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Don Quijote Co., Ltd.
Company name (Japanese)	ドン・キホーテ
Date of establishment	1978
Headquarters location	〒153-0042 東京都目黒区青葉台二丁目19番10号
Capital	100
Consolidated number of employees	13,546

 

 

 

2. Summary and Features

 
At the time of its founding,「Don Quixote」was a small warehouse-type store that stocked out-of-sales and out-of-season items at a low price and sold them at a high price.「Don Quixote」still keep such a business model even now and it accounts for 30~40% of total sales. Unsurprisingly, this purchase yields higher profits than regular procurement.

Since its first development as a comprehensive discount store,「Don Quixote」has started to handle not only party goods and miscellaneous goods, but also groceries, alcoholic beverages, cosmetics, daily necessities, leisure goods, interior goods, and home appliances. Generally, there are about 40,000 to 60,000 types of products handled per store, and in the case of large stores can handle up to 100,000 types. In addition, the products handled are different depending on the store.

For example, in the case of「Don Quixote」, which is located near the station, the display ratio of groceries, sundries, and daily necessities is high. On the other hand, stores located in the suburbs tend to have a high display ratio of large-sized products for private car visitors. The reason why the lineup of products handled is different is that the management gives discretionary power to display to the field manager. Moreover, even if the stores are located in the same area, the prices may differ from store to store. This is because「Don Quixote」gives the store manager and regional managers the discretion to decide the price.

The biggest feature of「Don Quixote」is that it is very open to empowering employees as described above. In particular, the on-site authority is big, and even the procurement of products is left to the part-time workers who have some experience. By doing so, even part-time work come to think about what they can sell. And if the product they procure sells, it will directly connect to the motivation of the employee. In other words, they work with a game feeling to some extent, and this kind of nature makes「Don Quixote」a more interesting store.

Another feature is the "Compressed display". At the store of「Don Quixote」, products are displayed in a stack so that it is hard to see where they are and what products they have. This is in direct conflict concept with the common sense of the distribution industry that display products in an easy-to-understand manner. However, because of this "chaotic" display method, customers can feel like a treasure hunt, so quite a lot of customers visit「Don Quixote」to kill their time. But the thing is, it's not completely chaotic. 「Don Quixote」has a smart way to create stores by considering the age of customer and adjusting the height of the shelves. In addition, they display their own brand products with high profit margins just next to famous products.

 

 

 

3. Major Business

 

■ Comprehensive discount store business

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		828,798	941,508	1,328,874
Consolidated operating profit		46,185	51,568	63,110
Consolidated total assets		642,868	807,057	1,278,567
Consolidated net assets		279,930	312,495	353,487
Breakdown of sales	Retail business	801,802	0	0
	Discount Store business	0	923,042	1,015,924
	General Supermarket business	0	0	266,058
	Rental business	20,559	17,420	39,132
	Others	6,437	1,046	7,760