Japan Seeks Sustainable Path for C-Store Industry

Panel urges industry to make operational changes amid rising labor costs.

February 10, 2020

TOKYO—A panel under Japan’s Ministry of Economy, Trade and Industry recommended that convenience store owners consider shortening business hours and that franchise owners help cover rising labor costs, reports The Japan Times, as c-store owners are struggling to keep their stores open 24 hours a day. The government is thus stepping in to help the industry become more sustainable.

The expert panel warns that the c-store industry’s current business model is “facing a crisis.” They advised that stores offer greater flexibility in their approach to business hours and agreed with Ministop Co.’s decision to “shoulder part of the cost of paying workers.” The panel called out other chains to do the same.

In the midst of the operational crises, the panel called for more flexibility regarding royalty fees that were paid by franchise owners along with a suggested revamp of the practice of collecting amounts based on gross profits. Long-term contracts that span 10 to 15 years tend to favor c-store chains—making it harder for franchise owners to adapt to changing business conditions.

Additional suggestions include improved communication with franchise owners, investment in technology such as artificial intelligence and automation and greater efforts to reduce food waste such as discounts for products nearing the end of their shelf life.