Convenience stores

Convenience Stores in Japan Reforming Business Models for Growth

Three large convenience store operators in Japan are looking to reform their business models to continue growing, as the domestic market hits its ‘ceiling’ and consumer behavior dramatically changes during the coronavirus pandemic.

Seven-Eleven Japan Co., the country’s largest convenience store chain, has tried to move away from its “one-size-fits-all” business model, its president, Fumihiko Nagamatsu, said in a recent interview.

The chain has expanded its network of stores under the unified format, making some 20,000 7-Eleven stores appear to be identical, with a similar product line.

Nagamatsu, however, said it is increasingly important that every store caters to local customers, as supermarkets do.

To this end, the company is working hard on product development in different regions of the country, he said.

Nagamatsu said the chain’s sales were picking up after being hit by the coronavirus crisis, due to its efforts to rethink product lines to satisfy local customers.

“People are more and more health conscious, so we have been offering more health conscious products since fall 2021. We plan to expand the range of smoothies in 2022,” Nagamatsu said.

Seven-Eleven Japan plans to expand its home delivery service by making it available in some 1,200 stores during the fiscal year through February.

Nagamatsu said he hopes the service will allow customers to place an order while having a meal at home and have a can of cold beer delivered before they finish eating.

“We want to make the service available nationwide by the fiscal year through February 2026,” he said.

Meanwhile, FamilyMart Co. president Kensuke Hosomi said the chain has many successful products in 2021, despite having gone through a tough business environment amid the protracted pandemic.

“Material prices are expected to be high in 2022, and the course of the coronavirus crisis is unclear,” Hosomi said in an interview, noting he had no time to be complacent.

Hosomi explained the company’s digital advertising plan that its stores will be equipped with large-screen digital screens displaying advertisements.

“Watching and touching products in physical stores has become a more valuable experience” amid the surge in online shopping, Hosomi said.

In addition to selling products, FamilyMart stores will have an increased role in displaying items in a way that makes them more attractive, Hosomi said.

Referring to the digitization of stores, the president said he hoped to expand the network of small convenience stores with unmanned checkouts to around 1,000 by February 2025.

FamilyMart plans to work with local businesses that are also part of the country’s social infrastructure, he said.

Lawson Inc. has expanded its line of fresh foods, including tofu and milk in its stores to meet the demands of customers who increasingly prefer to shop at nearby convenience stores rather than going to supermarkets. distant amid the coronavirus crisis.

By February 2023, Lawson will introduce in-store kitchens to 10,000 stores, where customers can place orders via smartphones and receive freshly prepared bento boxed meals in stores.

“We cook after receiving an order, so there will be no loss of food,” Lawson president Sadanobu Takemasu said in an interview.

“The impression that people have of frozen food is changing for something delicious and with a long shelf life,” Takemasu said, adding that the company aims to increase its frozen food sales fivefold. in five years.

Takemasu said Lawson tries to offer items with a regional flavor to make people want to visit his stores every day. When the number of foreign visitors rebounds, the related expenses will help the business continue to grow, he said.

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