Business

Japan anti-trust watchdog may stop convenience chains from imposing 24-hour opening on franchises

Kyodo

The Fair Trade Commission is considering preventing convenience store operators from forcing franchise owners to run their outlets 24 hours a day, sources close to the matter said Wednesday.

Operators unilaterally rejecting franchise holders’ requests to review their business hours to cope with severe labor shortages would be an example of a case subject to the new regulations, the sources said.

The antitrust watchdog is exploring the possibility of applying the antitrust law, which prohibits companies from abusing their positions of power, to such cases, to protect vulnerable business partners.

This month, the Ministry of Economy, Trade and Industry urged the operators of the eight major convenience store chains to formulate plans to address the acute labor shortages that have been putting a burden on franchise owners.

Industry leader Seven-Eleven Japan Co. has said it will review its longtime 24-hour operating policy in light of a dispute with a shop owner who cut business hours at his outlet in Higashiosaka in February without the franchise operator’s approval.

The owner of the outlet was initially accused by Seven-Eleven Japan of violating his contract. But the dispute grabbed national headlines, leading the retailer and its rivals to review their round-the-clock business hours.

Convenience stores have been increasingly relying on foreign part-time workers amid a labor crunch stemming from the country’s graying population.

About 80 percent of convenience store owners who responded to a recent survey by METI said they are worried about rising labor costs.

Japan’s graying population and low birthrate is leading to acute labor shortages in many industries. Convenience stores, which have become an important part of the social infrastructure, have also been affected.

Seven-Eleven in March began testing shorter hours at 10 stores in Tokyo to gauge the impact on sales and traffic.

Lawson Inc. said last month it will experiment with leaving stores unmanned late at night amid growing calls to modify the industry’s round-the-clock operations to cope with the national labor shortage.