Japan Convenience Stores:

 Article Source:  https://mainichi.jp/english/articles/20230507/p2g/00m/0bu/012000c

Article:

TOKYO (Kyodo) -- In the nearly half century since Japan got its first convenience store near Tokyo Bay, such outlets have become ubiquitous, with customers dropping by not only for groceries but also for financial services, package delivery, and much more.

But in recent years, the domestic convenience store market has become saturated and competition has heated up, prompting operators to seek more attractive products. A labor 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.

Ideas:

Whenever I go to Japan I am amazed at the quality and variety of products and services available at conbinis. 

What is impressive is they re-stock the fresh food are many times and not just a one time in the morning routine and once that product is bought they don't re-supply.

But in Japan it seems Toyota model, or other company's ideas of keeping the supply chain close at hand means they can re-supply the convenience stores easily and quickly.

Also I've noticed too, as this article mentions, I see a real-labor shortage at convenience stores in Japan, as most of the stores only have foreign students working at the stores.

Where is Lawson, Ministop, or 7/11, Family Mart, or any other store most of them have either foreign students or older staff.

It seems the younger generation of Japan don't want to work at convience stores these days. 

I see the same thing at Mos Burger, MacDonald's too as they are all staffed by older workers.

Of course Uniqlo, in Japan was the first store I went to that had un-manned check out areas but there were staff there to assist anyone who had challenges with un-manned check outs. 

Article:

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 U.S.-based operator of the brand.

"Seven-Eleven, which was born in the United States and evolved in Japan, has become a product of Japanese culture recognized 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.

Ideas:

Seven-Eleven and other convenience stores are unique and no other country can match the quality and variety or who Japanese does business. 

In South Korea the convenience stores are never near the quality of Japanese stores. The South Korean stores might be 10 behind the Japanese stores but they are improving rapidly.

Even in the US the stores are not at the same level of quality and definitely not the same level of service and Japanese stores. 

Article:

Other chains such as Lawson Inc. and FamilyMart Co. started franchise operations shortly after Seven-Eleven's establishment. The industry saw rapid expansion, meeting demand from customers who wanted to buy groceries outside of traditional stores' opening times.

The first 24-hour outlet was born 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.

Ideas:

Franchise stores, convience stores, have been challenged recently with many kinds of not-so-good activities that are making those who want or need to open a convience store very challenging.

For example if a husband and wife want to open or have opened a store, and they can't keep part-time staff and they can't stay open 24 hours like the company wants then it becomes as major challenge for the husband and wife. 

And then there are market power examples where companies place not-so good examples on the husband and wife to buy certain products and certain products which they really can't afford. 

Overall the franchise ownership model in Japan needs to improve to where the husband and wife, as a retiree type job, and actually make a living and have a normal decent life. 

Article:

In 1987, convenience stores enabled customers to pay utility bills at the cash register utilizing bar code scanning and installed ATMs 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 saturation of the industry, according to data from the Japan Franchise Association.

Ideas:

All markets or sectors such as the convience stores market sector go through periods of growth and periods of not-so-good growth. 

Maybe the market is now saturated or maybe there are now too many stores for the number of customers.

Overtime the market might achieve some kind of equilibrium where the number of stores and the number of customers are somewhat equal.

Most likely, maybe many older people in Japan, as they were forced to retire from their company job, wanted and or needed to keep working and opening a convience stores seems like and easy to enter market situation. 

But maybe overtime some of the husband and wife franchise operators might now be suffering because of saturation in the market and or too much market power related to the main company. 

Article:

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.

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

Ideas:

I think the main quality in Japan has always been customer service. It's understandable if a company needs to have un-manned cash registers in stores to save money and because of the labor shortage situation in Japan but it takes a way from the customer experience somewhat.

A husband and wife team should not have to work 24 hours as a company should help them as much as possible, even paying a worker to work nights if a husband and wife needs help.

But if a husband and wife needs to have shorter working hours they shouldn't be penalized or fined but the main company as what has happened in the past. 

Article:

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

Tsuyoshi Yoshikawa, an analyst at SMBC Nikko Securities Inc., points out that customers have still not yet returned to the pre-pandemic level.

"Convenience stores must now compete on developing products that can win customers and raise average customer spend," he said.

Ideas:

There are always going to be creative ways to enhance the customer experience in a store, whatever that is. 

The reason that customers might not have returned to the pre-pandemic levels is maybe because of inflation and customers have reduced the number or trips they take to a conbini each day or each week because of price increases since the pandemic started. 

Stores and brands always have to keep innovating to keep the customer interested in what they have.

If a Lawson had the same kind of product offerings as they did in 1990 as they do in 2023 they would not stay in business. They would have been out of business a long time ago.

So convenience stores need to keep moving forward with better service and better products to meet the needs of today's customers. Customers service is still king in Japan and hopefully convenience stores will not forget it. 

Have a nice day and be safe!