TOKYO: Two of Japan's largest retailers are to join forces in an effort to beat the tough trading conditions.

A joint venture between top drugstore operator MatsumotoKiyoshi and Lawson; the country's second largest convenience stores group, will see a new chain of outlets selling both food and pharmaceutical products, officials have confirmed.

The first hybrid store is likely to be opened in the spring and will stock a brand new range of pharmaceuticals and cosmetics currently being developed by the two players.

Between them, the two big chains operate 10,000 stores and have pledged to begin stocking each other's products before the end of the year. Crucially, they will also share distribution systems.

Japanese convenience stores reported their worst sales for some time last month, while drugstores are struggling following new legislation freeing grocery stores and supermarkets to sell low-risk, over-the-counter drugs without pharmacist supervision.

Lawson reported net sales of ¥1.559 trillion ($16.6 billion; £10.2bn, €11.68bn) in 2008, while MatsumotoKiyoshi pulled in sales of ¥392.3 billion.

The new outlets are expected to have a floor space of between 200 and 300 square meters, which is about two to three times the size of a typical convenience store in Japan.

Data sourced from Asahi Shimbun; additional content by WARC staff