As a well-established part of Japan's social infrastructure, convenience stores are now facing management issues, including the need to review their 24-hour operations. Toshifumi Suzuki, 87, an honorary adviser of Seven & i Holdings Co., introduced the convenience store concept in Japan nearly half a century ago. The Yomiuri Shimbun recently asked him about changes surrounding convenience stores and the future of the industry.
The Yomiuri Shimbun: Why did you decide to open a small convenience store in the 1970s, when large supermarkets were seeing growth?
Suzuki: While the number of large supermarkets was increasing, shopping streets were losing vitality, making it difficult for small stores to operate. I thought that introducing convenience stores under such circumstances would help large and small stores coexist and prosper.
Q: So, you introduced convenience stores in Japan after signing a licensing agreement with the U.S. operator of Seven-Eleven stores, but it didn't work at first.
A: American methods [of running convenience stores] weren't a good fit in Japan, and were of no use. But actually, in the beginning, I faced fierce opposition to the idea of opening a convenience store in Japan from inside and outside the company. So my only choice was to think of items that would sell well.
A: At first, pots and rice cookers were among items on sale, but I came up with the idea of selling things like bento meals, onigiri rice balls and oden [a hot dish containing various ingredients simmered in a soy-sauce-flavored broth]. The company completely opposed my idea, saying, "There is no way that things people can make at home will sell well." Only a few sold in the beginning, but now they are the main items sold at convenience stores.
Q: Back then the stores were open from 7 a.m. to 11 p.m. But that was changed to around-the-clock operation.
A: In 1975, I tested around-the-clock operation at a store in the suburbs of Koriyama, Fukushima Prefecture. The company was against it, but one night, a mother came in with her child to buy stationery at about 2 a.m. That made me realize that even in the middle of the night there was a need for a convenience store. Opening at night also increased daytime sales because customers feel assured by shops that operate around the clock.
Q: A panel of experts at the Economy, Trade and Industry Ministry recently compiled a report calling for improvements to around-the-clock operations of convenience stores amid the current labor shortage.
To solve the serious shortage, the panel called on convenience store chain operators to strengthen support for their franchisees; uniformly review services nationwide, including 24-hour operations; and take measures to reduce food losses, among other requests.
A: The government shouldn't interfere in how companies run their businesses; they should let them do so more freely. The 24-hour service offers advantages such as goods being delivered to stores during the night when roads aren't busy. Shorter business hours also means less convenience for customers.
Convenience store operators and franchisees may think they can manage their stores by following what we know as the convenience store system. Convenience stores themselves should endeavor to keep up with the times. If they have manpower shortages, they should develop attractive products and increase productivity, so they can create store management conditions where pay increases becomes possible.
A: Some are saying there has been a saturation of convenience stores following a surge in numbers.
A: They may be trying to eliminate competition by bringing up such discussions. Innovative products and services are created because of competition and improvement through friendly rivalry. This competitive environment is also good for customers. Just because there are 50,000 convenience stores within the industry doesn't mean it's fair to argue there are too many.
Q: How can information technology be used to run convenience stores?
A: I think the use of big data lacks innovation because it's based on past performance. But convenience stores also have to change. They can create services to meet regional needs by combining their services with online mail-order business.
Q: The 7pay smartphone-based payment service was terminated due to a spate of unauthorized access cases.
A: We already had the nanaco e-money system, so I don't believe there was a need to follow current trends with the introduction of a new payment system. I've always faced opposition when doing new things. Things everyone can agree on are nonsense. Things where you face opposition are truly worthwhile trying. This is what I want to tell young people.
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