Marukai serves
up some bargains
The membership-only
By Peter Wagner
market, with two stores on
Oahu, has found its niche
in Oriental foods
Star-BulletinIt's just inside the door, the big 35-cent Coke machine that tells shoppers they're in for a bargain at Marukai Wholesale Mart.
"We don't make any money on that," said Richard Matsu, executive vice president of the specialty grocery store on Dillingham Boulevard.
But Matsu says they don't make money on lots of things at Marukai, where American goods are just a convenience for customers drawn by a huge selection of Oriental foods. They do things differently here, and somewhere among the miso and mushrooms they seem to be doing it right.
Osaka-based Marukai Corp. last year grossed $60 million, about half of it at the Dillingham store.
The company has 350 employees at three stores -- in Los Angeles, Kalihi and newly opened at Farmer's Market on Auahi Street.
Sales were up 8 percent and profits even higher, despite the drag of Hawaii's weak economy.Not bad for a grocery store that charges a $10 membership fee for the privilege of wandering it's ever-changing aisles.
"We carry 12 kinds of fresh mushrooms," said Matsu, hovering over a display of matsutake, enoki and shimejis. He brushed past neat rows of white peaches, Japanese green peppers and other produce he's proud of.
The store is arranged around a sushi bar where a white-aproned chef prepares fresh bentos and other delicacies. A large fish counter dominates one corner of the store, where huge red slabs of ahi are displayed.
Rows of canned and bottled products -- arare, yokan, kuromame black beans and other oriental foods are the core of the stores 25,000-item inventory.
Wrapping all of this are sundries, liquors, and everything from T-shirts to vacuum cleaners.
Unlike most supermarkets which deal in high volume and convenience, Marukai likes to mix up its merchandise to keep customers on their toes.
"We want people to stay longer in our store," said Matsu. "When they stay longer they spend more money."
A major draw are low prices -- sometimes 50 percent to 70 percent below competitors.
"The prices are much more reasonable here, and the selection is good," said a customer last week who had driven across town from Manoa.
A random check last week showed a 10-ounce bag of Lion Coffee at $3.99, Romaine lettuce at 89 cents a pound, and Diamond soda crackers at $1.75. The same products at Safeway were priced at $6.99, $1.49, and $2.99 respectively.
The company keeps its prices, and its margin, low by buying directly from suppliers, eliminating the cost of wholesalers.
Marukai itself started out in Hawaii as a wholesaler of food products from Japan in 1965. The company shifted to retailing 11 years ago after a rising yen cut profits.
"We thought, if we sell at the same price to consumers, guarantee we can sell cheaper than grocery stores," said Matsu.
Another key to the company's success has been its fee-membership policy.
First in Hawaii with a membership store, Marukai now has more than 130,000 members -- 80,000 of them in Hawaii. The $10 annual fee adds $1.3 million to revenues and helps trim prices.
But memberships also allow Marukai to keep tabs on its customers and fine-tune its inventory.
"That's the No. 1 reason for the fee," said Matsu. "We want to know how people spend their money."
