Japan Convenience Store Challenges:

 https://the-japan-news.com/news/article/0006981330

Shorter business hours make little headway at convenience stores

Ideas:

The ideas of 24/7 operations in the convenience store industry maybe is a convenience for some customers, or many, but it had become a challenge and problem for many who have a franchise and are/were required to stay open even late a night when they had no extra workers to fill the gap from midnight to 6 AM for example and the husband or wife had to work the late shift.

Now with the virus situation, with those who have lost jobs, there seem to be more willing to work the late night shift.

Whenever I traveled to Yokohama and went to the conbini stores to buy something you either saw an older person and or an foreign college student working the registers. 

It's understandable if someone doesn't want to work the 12 to 6 late shift. If not then the older franchise owner has to cover because he/she has no one else to work the shift and the company requires the store to remain open 24 hours.

Stores should not have to stay open if there operating costs for the late night time period is more than the sales for that time period. If a store only has, for example, one customer per hour, how can they make a profit if the operating cost are more than sales/ revenue.

Its basic economics that a store should not operate during the hours, if possible, if sales are not more than the operating costs during that same time period. 

But some could say our sales during the rest of the day is far greater than the operating cost and if we look at the entire day we still have more profits than the operating costs even though we remained open during the slow or down periods.

That might be true for some stores but not all stores, as some convenience stores are probably operating on very thin profit margins meaning they can't afford to stay open during slow or down periods.

So 7-Eleven gives an incentive of more profits to those who maintain 24 hour operations. It might be good if a store franchise operator can still afford it.

But of course because of the pandemic, those who lost their jobs in other service type jobs are probably more than willing to work the late night shift.

In that case the conbini stores maybe can easily stay open, but the situation might still be the same if there are no or not a lot of customers during that time.

But if 7-Eleven and others cover some of the late night operating costs then it might be worth it to stay open.

Convenience store companies need to find a way to give more benefits or incentives to the operators instead of the operators deciding to close because they have no part-time workers during the slow periods and or listen to the operators and work with them in a partner relationship instead of a top-down relationship where only what the company wants is important.

There should be a shared partnership where both are considerate to the ideas of the other and not just what the company wants. 

The virus situation doesn't seem to be slowing down there might be, for the present time, more willing to work the late night shift in the convenience stores.

A 4.3 percent drop in sales might not be a lot for some businesses but if a store is already operating on a very tight profit margin, meaning the difference between revenue and costs is not much, any lost in sales can be a significant factor or many of the store operators. 

And if they have to remain open during the period when operating costs are more than sales/revenue, and the rest of the day sales are not what they were before the pandemic it can only create more problems for the operators of stores.

Of course during the pandemic there are many stories of sectors/industries that are finding ways to innovate in order to survive and stay in business.

Japan has always been a people or customer service friendly style of business, in that a person to person style business is/was how the main idea always.

But as businesses try to survive the ideas of less person to person customer service style businesses will become more prevalent in the years to come.

In Yokohama, for example, whenever I would visit an Uniqlo or GU store they had already transitioned to a self-checkout style system. But there were always store staff standing by to help any customer who had trouble with the self-checkout system. 

So the idea of person to person customer service was still available along the the self-checkout system.

The question might be if convenience stores do to a self-checkout system, what will be the challenges, for some groups such as older customers who are not used to self-checkout systems and or even, for example, trying to buy things online. 

And when foreign tourism, does return are there going to be direction/instructions in foreign languages such as Chinese, Korean and English, and will there be someone available to help those who have challenges with the self-checkout systems in the convenience stores. 

Those are some challenges that convenience stores need to think about as the consider moving more toward self-checkout systems.

Any ideas of innovation should be examined carefully for both the positives and the negatives of a new system to be implemented. 

As above there might be many challenges for some groups when for example self-check out systems, along with the ideas of some products can be sold at certain times and still need or require person to person interactions. 

For example if a customer uses a self-checkout during the 12 to 6 AM period and there is a problem with the self-checkout system, what are they do to if there are no workers in the store at the time.

This happened recently in South Korea, which also has been experimenting with self-checkout systems in some of its convenience stores.

So even if a convenience store or other stores or service type business begins to use a self-checkout system, there still will be the need for store workers/people in case of system challenges.

The shortage of workers in the restaurant industry is not a surprise. If the restaurants, before the pandemic were open 24 hours, it would seem logical that they would have challenges finding workers for the 12 midnight to 6 AM time period. 

While it might not have been a challenge during the peak 2009 period, the lifestyle changes or mindset of society has dramatically changed since then.

Some in society, globally, are not willing to work certain jobs or hours as before, so the idea that convenience store or restaurants there are open 24 hours are not attracting, for example the college age group who don't want to work the late night shift and or don't want to work for minimum wage, if that is what is being offered today.

Companies are always looking for ways to improve their profit position.

For example some or many in the restaurant industry were most likely having challenges with the late night shift, and like convenience stores, seeing their operating costs higher than their profits. And then add in the idea of being unable to find enough workers for that time period, the pandemic situation actually became an incentive to reduce hours and innovate their products and service.

The idea of sitting in a restaurant and eating a meal may still be an idea for some or many but some don't want to during the pandemic period, so its only natural that restaurants began to offer more takeout service.

Possibly some might have even considered the idea of delivery type services. For example, maybe already, but they might a contract with auto-bike delivery service. The customer order as takeout meal online and the restaurant then texts or sends a message to the delivery service company to pickup the takeout meal in 15 minutes and then take it to the customer who ordered the takeout meal.

In that way companies don't have to invest in auto-bike or workers to do that service.

so the restaurants can be a combination of customers coming to the restaurant and picking up the takeout meal and or have it delivered instead of going to the restaurant.

Of course what many pizza companies are already doing now.

And the there is McDonald's, which most likely started its home delivery services before many other fast-food industries. 

But it will be interesting to see what Mos Burger and KFC are doing right now related to home delivery type services. 

McDonald's maybe saw that is wasn't very profitable staying open for 24 hours if there are not enough customers during this time period.

For example, I visited two McDonald's in the Yokohama Kannai area and whenever I went there to order takeout breakfast after finishing my morning run, I noticed in both places, one across from Yamashita Park, koen, and the other place near Kannai station, eki, that all the workers were older workers or even retirement age. I didn't see anyone under the age of lets say 60 in both places.

Perhaps again college age students no longer want to work at McDonald's as maybe the hours don't fit their schedule and or lifestyle. 

And or the pay per hour is not what they like.

I've also visited the Mos Burger across from the Kannai McDonald's many times and I've seen the same situation related to the age of the workers in Mos Burger. 

Have a nice day and be safe!