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50 years on, Japan’s convenience stores keep evolving

ANN/JAPAN TIMES – In the nearly half century since Japan got its first 7-11 near Tokyo Bay, such convenience stores have become ubiquitous, with customers dropping by not only for drinks and snacks but also for financial services, package deliveries and much more.

But in recent years, the domestic convenience store market has become saturated, with competition heating up, prompting operators to seek more attractive products.

A labour shortage has also become a serious problem, leading some stores to give up 24-hour operations and introduce unmanned cash registers to keep up with the changing times.

What is now Seven-Eleven Japan Co was established in November 1973, and its first store in the country opened in the capital’s Toyosu district in May 1974 following a licensing agreement with Southland Corp, the United States (US)-based operator of the brand.

“Seven-Eleven, which was born in the US and evolved in Japan, has become a product of Japanese culture recognised all over the world,” Seven-Eleven Japan President Fumihiko Nagamatsu said at a recent ceremony to commemorate the 50th anniversary of the company’s establishment.

A Seven-Eleven store in Japan. PHOTO: KYODO

Other chains such as Lawson and FamilyMart started franchise operations shortly after Seven-Eleven, and the industry expanded rapidly, meeting the demands of customers who wanted shopping opportunities outside of traditional stores’ opening hours.

The first 24-hour store opened its doors in 1975, and plastic-wrapped rice balls were launched in 1978, becoming a smash hit at a time when they were widely considered to be a type of food only made at home.

In 1987, convenience stores began offering a service that enabled customers to pay utility bills at the cash register utilising bar code scanning.

ATMs were installed in 1999, allowing people to withdraw cash.

The number of convenience stores in Japan jumped some nine-fold from 6,308 in fiscal 1983 to 58,340 in fiscal 2018. But the number fell to 57,544 in fiscal 2021, reflecting industry saturation, according to data from the Japan Franchise Association.

A shrinking workforce, meanwhile, has forced some convenience store owners to work long hours, prompting franchise operators to start to introduce shorter opening hours to address the issue.

FamilyMart has started to introduce unmanned cash registers, aiming to increase the number of stores with such labour-saving measures to about 1,000 by 2026.

Other chains are also ramping up efforts to stay competitive, such as launching frozen foods from famous restaurant chains and offering meals cooked in-store.

Analyst Tsuyoshi Yoshikawa at SMBC Nikko Securities points out that customers have still not yet returned to pre-pandemic levels.

“Convenience stores must now compete on developing products that can win customers and raise average customer spending.”

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