Browsing through the array of goods -- from kitchenware to clothing -- at a new outlet in the Shinjuku branch of the Isetan department store in Tokyo, the price tags may surprise you: 900 yen for a nylon tote bag, 1,900 yen for a T-shirt, 550 yen for a ceramic mug.

Department stores such as Isetan usually play host to shops retailing expensive products, but prices at BPQC, which sells private-brand goods, are about 30 percent lower than the average at the store.

Retailers in Japan are having a tough time as the protracted recession dents sales. New vendors -- often discounters -- are taking huge bites out of their customer base, and archaic distribution arrangements are making real cost-cutting difficult for stores to achieve.