Japan’s convenience stores catering more to elderly as demographics shift

by

Staff Writer

The nation’s convenience stores are changing with the times, shedding their image as places for young shoppers keen on fast food, concert tickets and comic books, and increasingly catering to older clientele.

As the population grays and people live longer, the small, near-ubiquitous stores are revising their offerings to suit the tastes and needs of seniors by introducing home delivery, healthy bento boxed meals and a one-stop shop where pharmacies share floor space.

Some are setting up elderly care support counters, and in a stab at becoming social meeting spots, are offering seating and even karaoke boxes.

In a move symbolizing the change, second-ranking Lawson Inc. on April 3 opened its first outlet with a nursing care consultation desk in Kawaguchi, Saitama Prefecture. The outlet will have managers and advisers available for consultation all day, every day of the week. The company plans to launch another one in the prefecture by summer.

In fiscal 1989, people aged 29 and younger at 7-Eleven convenience stores accounted for 63 percent of daily customers. That declined to about 29 percent in fiscal 2013, according to recent statistics from Seven & i Holdings Co.

Customers 50 or older, who previously represented only 9 percent of all customers, rose to 30 percent in the same period, representing the age bracket with the largest share, according to the statistics.

FamilyMart Co. says people 50 and older account for about 30 percent of its customers, too.

Convenience stores specifically targeting the elderly are changing the image of the sector as a testing ground for marketing to teenagers. And while the Lawson outlet may be an extreme example and experimental in nature, others in the industry, while not going that far, have quietly shifted their marketing tack in recent years to focus further on seniors.

Operators are increasingly changing their food lineups to appeal to older shoppers. They seek, for example, quality, known-to-be-safe products, including higher-end foodstuffs, rather than the cheap, filling bento meals preferred by young shoppers.

A notable change is their bento and other ready-to eat foods offered under their respective house brands, where the companies are competing with each other to offer healthy ingredients and those that are either locally sourced or from a renowned region.

Leading the way in this area is Seven-Eleven Japan Co., the top industry player with more than 17,000 outlets and sales totaling ¥4.82 trillion for the year ended in February. The Seven & i Holdings subsidiary’s Seven Premium product lineup generated ¥800 billion in revenue that year, featuring foods consumed at home.

While its self-service coffee and doughnuts, fried chicken and other fast food offerings remain a key sales driver, the shift is slowly underway. The company aims to boost sales of the products to ¥1 trillion this year.

Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute, said the main focus of convenience stores is not the elderly per se, but the overall shift from young to older shoppers, which is reflected in the food on offer.

“Until maybe a decade ago, the image of convenience stores was of a place where young people away from home could pick up food of their preference, like fast food restaurants,” said Kubota.

“At that point, strategies targeting males in their 20s was important. . . . But now female customers in their 40s and 50s are increasing.”

More conspicuous changes toward a higher customer age range, too, are underway. The top three players — including third-ranking FamilyMart and Lawson — all have introduced home delivery services, stocking meals and cooking ingredients aimed at meeting the demands of health- and quality-conscious seniors who prefer to eat at home.

The services also target orders for daily necessities ranging from toilet paper and detergent to light bulbs.

FamilyMart acquired Senior Life Create Co. and launched a home delivery service in December 2012, taking advantage of the latter’s Takuhai Cook 123 bento meal delivery for aged residents. The service is offered in seven districts, including two in Tokyo.

“A key area that convenience store operators like us need to address is how to close the so-called ‘last mile,’ ” to reach out to residents at home, said Shinsuke Otsuki, manager of FamilyMart’s corporate planning division.

A Seven-Eleven Japan spokesman said the company’s Seven Meal delivery service is the result of “trying to offer a broad range of services to meet the needs of an aging society.” Of the service, which is offered at some 13,200 outlets nationwide, about 60 percent of the users are over 60, he said.

Because of the nature of the shift, taking place slowly as customer profiles change to higher age ranges, the changes in marketing remain inconspicuous, at least for now.

But examples abound. FamilyMart’s Otsuki said the increase in larger bathrooms with grab rails at its outlets are targeted at older customers in general, not only the disabled.

The company has also set eat-in areas as a standard feature for new outlets — floor space permitting — providing a place for the elderly to gather to chat, especially in rural areas where there are few such facilities.

FamilyMart is experimenting with over 30 combination outlets that share space with drug stores through a tie-up with Saitama Prefecture-based Drug Ace and Osaka’s Higuchi Yakkyoku drug store chains.

“We’ve even opened a combination store with a karaoke box in the Kamata district” of Tokyo, said Otsuki. “This may prove a senior-targeting outlet because many senior customers come here in the daytime to practice singing.”

“I think convenience stores will continue to change as the nation’s demography changes, rather than under management initiatives,” said Rakuten’s Kubota.

“Currently, food is the main merchandise, but the customer profile is changing to a higher age group, and so I would think demand for food will decline and they may begin to sell more products other than food.”

He added, convenience stores’ main offerings may shift from goods to services, “because in an economic structural change, there’s the tendency for services to increase. Convenience stores in the future could be centered on services rather than goods.”