Business / Corporate

Convenience store chains issue action plans, softening stance on operating hours amid labor pinch

Kyodo

Convenience store operators released actions plans Thursday to address acute labor shortages, which suggest they are becoming more flexible about operating hours.

“We will let the owners of (franchise stores) make the final decision” on whether to reduce business hours, said Fumihiko Nagamatsu, president of Seven-Eleven Japan Co., at a news conference in Tokyo. The move is a shift from the industry leader’s longtime policy of keeping stores open around-the-clock.

FamilyMart Co. and Lawson Inc., which have conducted trials of shorter opening hours at some stores as well as Seven-Eleven, said they are also prepared to leave the decision to their franchise store owners.

The industry ministry took the rare step of urging convenience store operators to formulate the action plans on April 5, after finding an increasing number of franchisees were struggling with staff recruitment and rising labor costs.

Nagamatsu also said Seven-Eleven will double investment to around ¥120 billion ($1.07 billion) in the business year through February 2020 to introduce self-checkout machines and other measures to assist existing outlets across the country.

In order to secure more funds to support franchisees, FamilyMart President Takashi Sawada said it will cut the number of people it plans to hire under its regular recruitment program in fiscal 2020 to 100, down 200 from the current year.

“With strong determination, we will cut expenses at our headquarters and use what we save for franchise stores,” he said.

Pressure for a review of the industry’s long-held business practices intensified following a dispute between Seven-Eleven and one of its franchisees.

The franchisee cut the opening hours of his store in Higashiosaka, Osaka Prefecture, in February without approval from Seven-Eleven, and was accused of violating his contract.

Convenience stores have been increasingly relying on foreign part-time workers to cover shifts with many owners struggling to secure staff as the country’s population grays.

The nation’s antitrust watchdog is also considering new regulations to prevent convenience store operators from forcing franchise owners to open outlets 24 hours a day, sources close to the matter said Wednesday.