Seven-Eleven Japan Co. said Tuesday it will introduce a new system July 1 in which it will shoulder 15 percent of the commodity cost of unsold products such as boxed lunches that are disposed of after their expiration dates at its franchise stores.
The nation’s biggest convenience store chain operator claimed the measure is aimed at helping franchise stores overcome the recession.
However, it could be seen as a ploy to keep the franchises from selling discounted food.
Currently, franchises have to cover the losses themselves when they throw out the unsold products, a practice that industry analysts say has burdened the stores. According to some analysts, selling expiring food items at a discount is reasonable for both franchised outlets and consumers amid the recession.
The move by Seven-Eleven comes a day after it was slapped with an order from the Fair Trade Commission to stop the practice of unfairly banning its franchise stores from selling food products at discount prices.
Industry watchers say the FTC move could amount to a landmark in the Japanese convenience store industry, where products are usually sold at fixed prices.
Seven-Eleven, which runs nearly 12,000 stores nationwide, will be the first convenience store chain operator to shoulder part of the losses incurred by franchise stores in disposing of expired food products.
The cost-sharing for throwing out old food did not go over well with some franchise managers meeting in Tokyo.
At the inauguration of a newly organized union of the chain’s franchised store managers in eastern Japan, they called for a more secure status in their relationship with the chain.
The cost-sharing “isn’t worth an evaluation as it only dodges the real issue,” the union said in a statement.
They claim that franchises are exploited by the head office, with some managers saying they have no choice but to do as they are told or their contracts would be terminated.
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