C-Stores May Have Reached Saturation Point in Japan

Store count is shrinking as operators grapple with labor shortage.

May 08, 2023

ALEXANDRIA, Va.—Almost 50 years after 7-Eleven landed in the country in May 1974, Japan boasts a very high c-store concentration.

Convenience stores have become ubiquitous in Japan, reports The Japan Times, “with customers dropping by not only for drinks and snacks but also for financial services, package deliveries and much more.”

The market appears to have hit the point of saturation, though. The number of convenience stores in Japan jumped from 6,308 in fiscal 1983 to 58,340 in fiscal 2018. But the number fell to 57,544 in fiscal 2021, according to data from the Japan Franchise Association. Japan’s population is about 125 million, meaning it has one c-store for about every 2,170 people.

In addition to saturation, operators are dealing with a labor shortage, causing some owners to work long hours and some stores to give up 24-hour operations or move faster towards unmanned options.

  • According to The Japan Times, major milestones for the industry include: The first 24-hour store opened its doors in 1975.
  • Plastic-wrapped rice balls were launched in 1978, “becoming a smash hit at a time when they were widely considered to be a type of food only made at home.”
  • In 1987, convenience stores began offering a service that enabled customers to pay utility bills at the cash register utilizing bar code scanning.

Tsuyoshi Yoshikawa, an analyst at SMBC Nikko Securities, said that the number of customers has not yet returned to pre-pandemic levels. "Convenience stores must now compete on developing products that can win customers and raise average customer spending," he said.

Last year, Japanese c-store chain FamilyMart announced it would use robots to replenish drinks taken from its refrigerated cases. It estimates that the robots will save about 10 hours of labor per store, per day.

NACS offers a global c-store industry report published each quarter in association with NIQ.