Seven-Eleven Japan Co. informed the Fair Trade Commission on Wednesday of its decision to accept an FTC order to stop barring franchise stores from selling boxed lunches and other food products close to expiration at discount prices.
The nation's largest convenience store chain said it made the decision at its board meeting Monday because the FTC had endorsed the firm's guidelines for permitting discount sales by franchise stores, company officials said.
The guidelines include allowing the stores to begin lowering the price of a product from an hour before the time by which it should be sold. If the products are sold below cost, franchise stores will have to shoulder the loss, according to the guidelines.
Seven-Eleven Japan decided to accept the order by the fair trade watchdog because the guidelines have been generally accepted by franchise stores, the officials said.
Under their contracts, Seven-Eleven Japan franchise stores can freely determine the prices of products. But owners say the chain effectively demands that stores sell products at its "recommended prices" and capitalizes on its dominant position — a claim Seven-Eleven Japan has denied.
The FTC said June 22 that Seven-Eleven Japan has prevented the stores from selling food products close to expiration at bargain prices and that the restriction constitutes a legal violation that capitalizes on its dominant position. It ordered the company to end the practice.
The decision by Seven-Eleven Japan to effectively allow price cuts by franchise stores may trigger similar moves by other convenience store chains, industry analysts said.