With the market now saturated, convenience stores in Japan increasingly need to upgrade products and services for the elderly amid the rapid aging of the country’s population.
The convenience store business has grown sharply since the first shop opened 40 years ago thanks to “social changes,” said Toshifumi Suzuki, chairman of Seven & i Holdings Co., which owns industry leader Seven-Eleven Japan Co.
In 1978, Seven-Eleven Japan, which opened the first convenience store in Japan in Tokyo in May 1974, released onigiri rice balls that allowed consumers to apply dried seaweed to them moments before eating, upsetting the social norm of making onigiri at home.
Seven-Eleven Japan has since continued to introduce convenient products and services, including utility bill payments and automated teller machines.
Along with Seven-Eleven, other major convenience store chain operators such as Lawson Inc. and FamilyMart Co. have also developed new products and services. An increasing number of consumers no longer see convenience stores merely as supplements to larger stores such as supermarkets.
While supermarkets have declined as a result of price-cutting competition for perishable food products and daily necessities, the top three convenience store chains have continued to boost sales by upgrading their product and service lineups and aggressively opening new outlets.
But the market has become saturated because the top three chains and other operators now have a total of more than 50,000 stores across Japan. In addition, convenience stores are exposed to growing competition with supermarket and fast-food chains as well as drug stores and other retailers selling foodstuffs along with their mainline merchandise.
Sales per convenience store have begun to decrease as a result.
Among specific problems, sales of canned coffee and other products bought by smokers when they drop by convenience stores to purchase cigarettes are declining as more people quit smoking.
Spending by main users of convenience stores — male company employees — is also forecast to fall when the last of baby-boomer generation has retired.
To address the toughening business environment for convenience stores, Lawson will make its stores into “local health stations” that are friendly to the aged and offer broad product lineups of healthy food and medicines, said Takeshi Niinami, chief executive officer of the company.
Seven-Eleven will promote high-quality products priced relatively higher than similar merchandise under its own brand Seven Gold, hoping to stimulate demand among young people who occasionally want to spend more on food than usual, as well as senior citizens with financial leeway, Suzuki said. Seven Gold is an addition to the chain’s conventional own brand Seven Premium.
Seven-Eleven is also set to begin a “roundsman” service that takes orders from elderly people who cannot readily leave their homes for shopping and delivers orders from nearby convenience stores, Suzuki added.