This study examines and compares the employment strategy used by Japanese and British retail companies in Hong Kong. Hendry's structured employment systems model is adopted as the theoretical framework for this research. Three case companies - Morioka and Okadaya (Japanese-owned) and Supercom (British-owned) - are studied regarding what employment strategies they have adopted to expand in Hong Kong, and to adjust to the changing consumer market. The evidence shows that the Japanese companies adopt more structured employment systems, employing more employee groups than the British company. Both Japanese companies vary employment practices to different employee groups on the basis of national origins, hierarchy, employment status and gender. Furthermore, skills/profession is also used in Okadaya to differentiate employment practices. Supercom mainly varies employment practices on hierarchy and employment status. Therefore, five to six groups of employees are identified in the Japanese companies, while two to three employee groups are identified in Supercom.