The realities of 'owning' a Japanese convenience store

https://www.japantimes.co.jp/news/2019/05/27/national/behind-scenes-24-7-service-realities-owning-japanese-convenience-store/

by Ultramanoid • 7 years ago

233 225 7 years ago

japantimes.co.jp

vkou2• 7 years ago

The irony is, of course, that the chain is named "Seven-Eleven" because it was originally open from 7 am to 11 pm.

One Monday night in late March, only 10 customers came to the man’s store in the three hours before dawn, and the sales during that time were a little more than ¥6,000. The store will be in the red if he hired someone for night shifts.

Smart management would close the store during those hours. Of course, the franchise doesn't care for smart management - when the operator eats the loss.

microcolonel2• 7 years ago

I think what they're getting at is that if you want to operate a 7-Eleven, you ought to be absolutely reliably open at the expected hours. The intended alternative is to shut down the store. This man made a terrible business decision and is now stuck between a sunk cost and probably not a lot of alternatives for work.

ranrotx• 7 years ago

That’s the problem with a lot of franchise agreements. So many things are set and specified for you that you have no room to optimize your business as an operator.

In a way, you’re almost just like an employee of the franchisor, but without any of the benefits and a lot more liability. But it’s a great relationship for the person selling the franchise.

vkou2• 7 years ago

I have a feeling that 'expected hours' would suddenly and magically stop including 1am-6am, if the parent company were on the hook for the operating losses the franchises are suffering.

But as long as they can make other people pay for their business decisions, that will, of course, not happen.

yskchu• 7 years ago

Smart management would close the store during those hours.

It's mentioned in the article actually, in the later section on Mitoshi Matsumoto; he closed early and made more $$$.

hudibras4• 7 years ago

So he said.

bane2• 7 years ago

Just came back from Japan and man are there too many convenience stores. Within any given area there is probably 6 to 7 stores within eyeshot and an easy walk. It's weird thinking that they are too convenient, but honestly they start to become pointless. More than once we simply walked by a few knowing that there would be another one just a minute or two more down the street.

It's great that we could find something to eat at 2am when jet lag messed with our eating schedule and nothing else was open except the four 24-hour chain restaurants, 6 full-service Izakayas and a late night curry shop within a 5 minute walk. What would we have ever done without a choice of 6! different convenience stores within the same area?!

Oh and on the way there's vending machines literally jammed into every available urban crack that can fit one where I can service most of my beverage and a few food needs.

I couldn't figure out how these places earn enough money to keep the lights on given the competition, now I guess I know.

Klonoar4• 7 years ago

I mean, I lived there for 5 years of my life and go back often... the alternatives open at 2AM only really exist in the tourist areas or the uber dense areas (Shinjuku, etc). Past 2, you're pretty much only eating conbini food or a "family restaurant" like Denny's, Johnathans or Royal Host if you're lucky enough to be near a 24 hour one.

bane2• 7 years ago

Okay, to be fair, I'm definitely talking about big downtown areas exactly like Shinjuku or Shibuya. But I'm also talking about places like すき家 and 松屋 which are pretty good late night drunk eats and we never failed to find a late night pub with crazy hours no matter where we were.

asutekku2• 7 years ago

As the other person said, outside of major areas Konbinis are pretty much the only option to get anything at late. Other 247 stores are relatively rare.

ekianjo4• 7 years ago

Within any given area there is probably 6 to 7 stores within eyeshot and an easy walk.

That's just Tokyo and it's a very biased impression. Most places in Japan don't have that kind of density of combinis. I there there are about 55 000 combini in Japan, and there's probably 20% of that in Tokyo alone so you were in an area that's not representative of japan as a whole. In most other other cities there's rarely more than one combini at the same place, and you would not see 5-6 of them just by walking 5 minutes.

I couldn't figure out how these places earn enough money to keep the lights on given the competition, now I guess I know.

Of course they earn money. They sell products with a high markup (like 30% more than everything you find in a supermarket), they have their own lines of products with even higher profit margins, and there's usually a density of population that guarantees a minimum of business viability anyway. Never seen a combini owner that was poor or having a hard time to make ends meet.

karaokeyoga• 7 years ago

From my place in suburban Kyoto, there are five 7-11s within a ten-minute walk. Ten years ago, there was one.

kalleboo3• 7 years ago

In most other other cities there's rarely more than one combini at the same place, and you would not see 5-6 of them just by walking 5 minutes.

I live in a prefectural capitol in Southern Kyushu and yeah you're right - we only have 3 convenience stores in 5 minute walking distance. That's in a residential area and not in the central district where there are more.

I lived in a similarly sized city in Sweden and there was literally one single 24/7 convenience store in the whole city. And I think it closed.

Never seen a combini owner that was poor or having a hard time to make ends meet.

Well obviously, they quickly become ex-owners. We have 3 convenience stores near our apartment that have shut down in the past couple years. They wouldn't shut down if they were profitable.

hudibras4• 7 years ago

Never seen a combini owner that was poor or having a hard time to make ends meet.

Agree 100%. I never believe anything that a business owner says in the news.

seanmcdirmid6• 7 years ago

They probably have the density and business to support it. Like how the USA having so many gas stations everywhere might seem bizarre to someone from another country (e.g. gas stations in China are definitely nowhere near as numerous).

zrobotics4• 7 years ago

To be fair though, most of those gas stations would be very happy to no longer deal with selling gas and would be more profitable as just convenience stores. There's nearly no profit from selling fuel, it's almost entirely used to increase traffic to the convenience store.

csomar• 7 years ago

I was there a couple weeks ago and it is not as dense as Hong Kong or Bangkok. And thank god they had that many, otherwise the lines will be unbearable.

frutiger4• 7 years ago

Wait til you visit Manhattan and see how many CVSes and Duane Reades there are!

psychomugs2• 7 years ago

It's still nothing compared to the density of conibinis in Tokyo, sometimes there's 2 of the same chain within eyeshot.

ken• 7 years ago

Compared to what? Here in the USA there are several places within walking distance from my home that have a Starbucks across the street from another Starbucks. One of them is an intersection where 3 of the 4 corners have a Starbucks. There's at least one building here with 2 Starbucks in it, in case taking the elevator is too much hassle. Japan doesn't sound all that much different in this respect.

danmaz742• 7 years ago

Are Starbucks [in the US] open 24/7?

Edit: added [in the US].

learc83• 7 years ago

In my smallish hometown there is a Waffle House (24 hour diner) across a small interstate bridge from another Waffle House. And then there are 2 more within a very short drive.

magduf10• 7 years ago

To be fair, a Japanese convenience store is far more useful than a Starbucks. You can buy all kinds of things there, including healthy foods. Starbucks mostly just has overpriced coffee drinks and confections. At a conbini, you can get a healthy meal, and you can even microwave it there, you can get cash from the ATM, you can get a SIM card for your phone, etc. The two just aren't comparable.

SapporoChris2• 7 years ago

Keep in mind the population density of Tokyo is around 6,224.66/km2 (16,121.8/sq mi). Not going to do the detailed math, but let's say each store has a customer base of a .5 square miles. That's over 4k population. That seems to be plenty of customers to justify the store placement.

baroffoos2• 7 years ago

The problem seems so obvious. There is far more supply than demand. Why do people keep opening these stores when it is clear no one wants them?

patio112• 7 years ago

It’s not clear no one wants them, since there is little data available to an ex-salaryman looking to open one in a particular neighborhood and if you do an unsophisticated “just watch a store all day” competitive analysis both a thriving store and a struggling store appear busy at all hours of day and night.

The franchisor is basically uniformly in favor of more locations since the franchisee bears most startup costs and the franchisor gets an effective call option on their cash flow.

(It’s also not clear to me that convenience stores are oversupplied relative to demand; there are probably some geographic mismatches but in e.g. this neighborhood in Tokyo you can find 3 in a Us city block and they’re self-evidently very viable. Which you might ask “How is that self-evident?” and I’m left to say “Trust me.”)

michaelt• 7 years ago

I guess it depends on how much data you'd expect someone to gather before opening a store.

I was under the impression opening a convenience store cost $50,000 or more, not an investment to make lightly IMHO. A few visits will tell you if the owner is working 16 hours a day 7 days a week, and you can estimate markups by looking at prices on the store shelves. And that's without looking for franchisees complaining online, or asking them in person.

psychomugs2• 7 years ago

There might be more supply than demand, but that doesn't mean that the demand is low.

jorblumesea2• 7 years ago

I don't understand the demand from the parent company to stay open late, given the lack of customers they clearly have and the oversupply of combini. I was at a 7-11 in Osaka by the dotonbori and it was basically vacant.

Like many things in Japanese society it seems to be because "this is the way it's done".

patio112• 7 years ago

You live in a country with franchises, right? What would you articulate as the brand promise of a McDonalds? McDonalds has a very clear internal understanding of that brand promise: it includes clean bathrooms, a smile, extremely low prices available, and very consistent food.

7/11 also has a brand promise. It includes, prominently, “If you need it, 7/11 is open.”

The LTV of a conbini regular is very, very, very high and the brand does not want you to sour on it for reasons specific to Store 6548 in May 2019.

CydeWeys12• 7 years ago

I wonder if this matters less in the age of smartphone apps. I tend to check opening hours on Google Maps first before heading to a place when it's outside of obvious business hours (like the middle of the night).

jorblumesea2• 7 years ago

I understand what a franchise is. McDonald's regularly changes its menu, removing items that do not perform. McDonald's franchise owners can run menu items in areas that make sense for them. Hours for McDonald's are set based on demand and largely up to the franchise owner.

There are many examples of franchises allowing flexibility within the brand while still adhering to the brand ideals.

It sounds like 7-11 corporate for JP is uncompromising to a fault and unwilling to meet owners halfway.

Tharkun3• 7 years ago

McDonalds has clean bathrooms? That's news to me.

Source: went for a wee in a McDo in Belgium last week, place was predictably disgusting.

CydeWeys12• 7 years ago

I was just in Japan two weeks ago, and convenience stores were omnipresent. I'll admit, it was incredibly convenient, as I never went for lack of food or water, and I got into habit of grabbing a beer and a snack every night to take back to my hotel room before bed. I was relying on them (and vending machines) pretty heavily for coffee and green tea throughout the day as well.

There were way too many convenience stores that were open in the middle of the night, though (and apparently this is a requirement on the franchisees). There was a 24/7 convenience store on the first floor of my hotel, and then another one down the block, and then several more within a two block radius. There's no reason they couldn't all coordinate better so that each individual store is only open through the night a couple times per week. That would make a lot more sense. Most customers would still be able to reach an open convenience store, even in the middle of the night, within a few blocks walk. It'd be nice if stores had posted the hours of nearby stores so you'd know where else to go if the one you wanted was closed, but that's probably unnecessary now in the age of apps (I had no problem finding opening times for places on Google Maps).

gambiting• 7 years ago

Pharmacies in Poland all operate on this rotating schedule, where at least one pharmacy in town is open 24h(they always post a sign saying where the nearest 24h pharmacy is). I have no idea if it's by law or just a thing that everyone does.

ovi256• 7 years ago

Yes, this is by law and it's a requirement for having a pharmacy operating license.

Fun fact: in most of the world, medical personal like pharmacists can't go on strike.

barking• 7 years ago

Being a pharmacy contracted to dispense public health service prescriptions is probably contingent on either providing out-of-hours service or being part of a rota that does that. It's that way in lots of countries.

redact207• 7 years ago

I studied this as part of my degree. It's mostly the ice cream vendors problem, where apparently the franchises would prefer to saturate a smaller area with competitors than a larger area with no competition.

It's probably an oversimplification but it is painfully evident when walking around metro areas of Japan.

majos• 7 years ago

Why would ice cream vendors want to all compete in the same place? It seems economically counter-intuitive.

brazzy4• 7 years ago

There's no reason they couldn't all coordinate better so that each individual store is only open through the night a couple times per week. That would make a lot more sense.

You incorrectly assume their primary goal is to provide service to customers.

Their primary goal is to maximize profits, and in a saturated market the only way to do that is by trying to take market share from the competition.

protonfish• 7 years ago

Profit = income - expense. The other way to maximize profit is reduce wasteful operating expenses.

mbreese• 7 years ago

And in a market where the parent company doesn’t protect area rights, your competition can be other stores of the same franchise. Something about that seems wrong.

la_barba• 7 years ago

I was there about a year back and I too remember thinking why they had so mayn vending machines, and also at seemingly odd/random spots. It felt a bit shady buying alcohol from a vending machine without showing ID, but maybe thats just cultural conditioning..

RyJones2• 7 years ago

I also just came back from Tokyo and Osaka; I was blown away by how many 7/11s there were and how close they were.

The vending machines are amazing. One other thing I would like to import: the widely available, clean bathrooms all over the place. That was super nice.

CydeWeys12• 7 years ago

Free public bathrooms everywhere was nice, but there was still a dearth of free public water fountains -- which, admittedly, most cities don't have enough of. Rome is kind of the gold standard in this regard.

I loved how some of the vending machines and convenience stores sold hot canned drinks. I've never seen that anywhere in the US. Now the hot canned coffee wasn't actually good (I had to try it), but it was interesting to have that as an option. There were also plenty of vending machines that would make coffee for you (which I didn't use because I opted for free coffee in the hotel in the morning and cold green tea thereafter, which I must say was delicious).

RyJones2• 7 years ago

I had the same experience. I had to try the hot canned coffee; I didn't try it again.

Also: canned mixed drinks! Japan is truly living in the future.

asutekku2• 7 years ago

To be fair a lot of people use the hot coffee to just as a hand warmer, coffee is just a nice extra on top of that.

seanmcdirmid6• 7 years ago

Public water fountains aren't really an Asian thing. I am hard pressed to think of an Asian country where I remember using one.

Freak_NL3• 7 years ago

Now the hot canned coffee wasn't actually good (I had to try it)

You just have to find the one type of can that doesn't have added sugar or milk. Once you know those nothing beats pulling a warm can of black coffee from the machine.

Really, the first company to introduce these on stations here in the Netherlands (or anywhere these don't exist) will turn a handsome profit if they stick to the Japanese formula for 自動販売機: small cans, low prices, decent selection, warm coffee, and located on train platforms. The novelty factor of the warm cans will take care of initial promotion.

But leave out that one warm corn drink.

rangibaby2• 7 years ago

It depends on the municipality. Even tiny parks in Nagoya will have a water fountain and faucet

fiblye• 7 years ago

I’ve noticed that the number of usable combini toilets is on a steep decline in major cities and tourist areas.

A few years ago they were all public and free to use at any time. Then English signs saying “Close the door. Don’t make a mess. Don’t stand on the toilets. Don’t do (xyz common sense thing)” started popping up. Then I saw a few saying “please alert staff if you’d like to use the toilets and we will give you a key”. Now most conbini in Tokyo suspiciously have two separate offices and zero toilets. If it’s an area with mostly foreigners, your chances of finding a toilet really fall off a cliff.

It was nice while it lasted, I suppose.

chasontherobot• 7 years ago

I've only found a lack of public toilets in conbini in notorious party areas/tourist locations (Shinjuku, Ikebukuro, Shibuya, etc). Any conbini outside of those, or even just on the outskirts have usable toilets.

thoughtfunction• 7 years ago

I've heard the combini's are typically cheaper and better than vending machines although.

innocenat3• 7 years ago

No, it usually around the same price. There are also many 100yen vending machine that are way cheaper than conbini.

akg_67• 7 years ago

Yes, it is correct. Vending machines are generally 20% more expensive than conbini. A bottle of water is 98¥ to 120¥ at conbini while 120¥ to 140¥ in vending machines.

odiroot• 7 years ago

Not sure if it's available in Japan but my favourite thing in 7/11 in China/Singapore is getting a hot pork bao at any time of the day.

magduf10• 7 years ago

One other thing I would like to import: the widely available, clean bathrooms all over the place. That was super nice.

Don't forget how almost every public restroom even has a washlet.

But we can't have these things in the US. Americans can't even be bothered to flush the toilet, and like to scrawl graffiti on bathroom walls. The only way we'd have the super-clean public bathrooms of Japan is to keep them locked, or have a pay-per-use scheme with cameras monitoring them to see who pees on the toilet seat without cleaning it.

zrobotics4• 7 years ago

Even pay-per-use won't solve that problem though. Have you ever been unfortunate enough to use a truck-stop shower? Not an experience I would recommend; after several weeks of motorcycle camping I started to think I would be better-served renting a cheap motel room.

Although I'll pass on the camera monitoring.

asdff5• 7 years ago

Americans can't be bothered to pay for a janitor. Airports are a near constant flow of people using the bathroom, and they are fine because it's someones job to regularly come in and clean the resulting mess.

delhanty2• 7 years ago

Even for HN, these are some of the most empathy-deficient comments that I've ever read.

Yes, it's true that there is a huge problem with overwork for the franchisees.

But those stores aren't there (just) for you.

Imagine this scenario: you're over 80, living on your own and not very mobile.

The fact that there's a 7-eleven within 100 metres that sells a large variety of foodstuffs and essential items in single portion sizes allows one to maintain one's independence, which is a godsend. Try that in LA!

Japan values social-cohesion. Many of us who live here long term do too.

Edit: admit there's a problem for the franchisees.

delhanty2• 7 years ago

Oh - update! I'm living in a farming & fishing village about 800 metres from the nearest combi.

After the local village shop shut down, the railway station 7-eleven started sending a van into the village once a week on a Wednesday afternoon so that the old people in the village could get their groceries.

blazespin2• 7 years ago

Right, but the solution is probably automation and not overworked to death franchise owners.

rangersanger• 7 years ago

Overwork is better than no work. Automation may be part of the solution, but on its own it fails.

ariwilson• 7 years ago

LA's a bad example; while there may not be a 7-Eleven every hundred meters, there's certainly one within a mile radius of most people in the city.

esyir• 7 years ago

A mile is a somewhat long distance to walk though. A hundred meters takes less than a minute, enough that I'll just pop out and get something random. the 10min++ to walk a mile is an exponential increase in friction.

dang• 7 years ago

Even for HN, these are some of the most empathy-deficient comments that I've ever read.

That seems badly exaggerated, unless I'm missing some horrible comments. As for "Even for HN": this is the kind of putdown of the community that I feel compelled to respond to, since no one else will. Yes, people post unpleasant things to Hacker News, often without realizing it. But the overwhelming majority of users here are far from empathy-deficient, and relative to the rest of the public internet, particularly not. You might be running afoul of the paradox of HN being a non-siloed community, which I wrote about here: https://news.ycombinator.com/item?id=19931510.

Putting down or dissing the community that you're participating in is actually a subtle form of vandalism: why should we bother taking care of it if it sucks so much anyhow? It's also a way of keeping one's distance from others: I'm not really part of this icky group—I'm here, but I'm better. Actually anyone here is as much a part of it as anyone else, and while many things happen that make one cringe, so do many things that bring out good in people. We should focus on the latter, because what we focus on grows, and the community's image of itself is pretty shaky. On HN, we also value social cohesion, and that involves bridging a great many wide divides. Only so much of that is possible, but it's precious and deserves taking care of.

Edit: sorry if it feels like I'm picking on you personally. That's not my intent at all. Your comment was otherwise excellent and the information you shared made this thread much better. I'm sorry to distract from that by responding to the least relevant bit. I hate doing that actually. But it's sort of a death by a thousand cuts thing, so we have to respond somewhere.

TulliusCicero3• 7 years ago

Thank you for articulating this. I've noticed these kinds of comments are common on reddit, and since becoming a mod of a reasonably popular subreddit they've irked me, but I allowed them in the interest of free-ish speech/not wanting to be authoritarian, and also because I couldn't articulate exactly what the problem was. After all, I didn't think criticism of a given subreddit was categorically bad.

This:

It's also a way of keeping one's distance from others: I'm not really part of this icky group—I'm here, but I'm better.

is a brilliant way of putting it. Completely nails the impression. It's a passive-aggressive, condescending way of pushing yourself up by putting others down.

bkor3• 7 years ago

How does your example explain how it would benefit an 80+ person that a franchise is open 24/7 or maybe 07:00-23:00? Especially as the owners themselves seem to be pretty old and in poor health because of the opening times.

crimsonalucard2• 7 years ago

Well LA you typically have a car. Though not as convenient as japan there are definitely 24/7 convenience stores or supermarket spots within short driving distance to where I use to live.

frequentnapper• 7 years ago

I currently stay in japan. The competition here is intense when it comes to food and drink. Every alley, even in residential areas in the back of the houses, has some mom & pop operated hole in the wall eatery. I never see more than two customers at many of these places at a time, but they stay open ungodly hours. I can't imagine they would be making more than $2-3 an hour on the average after all the costs.

SenHeng2• 7 years ago

A lot of family run retail shops all over the world/Asia seem to have this misconception that family labour is free, thus their employees/children/siblings are effectively working for below minimum wage.

granshaw• 7 years ago

It’s an arrangement. Low paid labor now for ownership of the business in the future

raverbashing• 7 years ago

7-11 is not friendly to Franchisees in the US either. There have been some lawsuits even

Owning a convenience store is a hard proposition

PhantomGremlin• 7 years ago

It's not just 7-Eleven. I wouldn't want to be a franchisee of any sort in the US. The power dynamic is horrible.

McDonald's is probably one of the better ones. But you're still beholden to them. They often own the land under the building, if not the building itself. They tell you exactly what you must do. They tell you when to remodel. They make you buy from their suppliers. They can decide to open another store a mile away from yours.

But longer term I think the worst franchise to be in will be car dealerships. Once EVs become mainstream, the service revenue will fall by about 80%. There's just so much less to go wrong. How will dealers be able to pay for the overhead of their giant buildings?

Scoundreller4• 7 years ago

Probably through higher margins on sales? But we’ll have less of those too with increased realiability.

I think the real threat to the incumbents is the risk of having only the 3rd best or worse electric drivetrain.

We might be in a winner-takes-all-ish market, like cell phones.

Moru2• 7 years ago

That's interesting with the EV's, a local cab company just went bust and they claimed it was the large repair costs that did them in. That and the closest workshop that could service them was 600 km away. I'm not sure how they would even get the thought of starting a cab service 600 km from the closest garage that could service the cars but that's another question...

The local 7-Eleven also went bust yesterday, together with their other store just a few blocks away. That corner of the city has plenty of other stores so it can't be easy to keep afloat. Town only has about 100 k people. (North Sweden)

AmVess• 7 years ago

Chick-fil-A and McDonald's are two of the better ones. They don't give them to just anyone, and are careful about locations, too. To become a franchisee with them ,you have to have a proven record of success and have plenty of money in the bank.

Rule of thumb: the easier it is to obtain a franchise, the less it is worth.

snaky• 7 years ago

Or maybe there's just so much more to go wrong.

But quantity can’t obscure what one Chinese energy journal last month referred to as the industry’s “Quality-Gate” scandal. The numbers are damning. In 2018, Chinese manufacturers recalled 135,700 NEVs for a crushing 10.8 percent industrywide recall rate. Already this year, another 23,458 electric vehicles have been recalled.
Batteries are the most common source of problems. Some don’t perform as advertised. Others drain unusually fast. Still others run dangerously hot. More than 40 NEVs spontaneously combusted in China in 2018.
Other issues include faulty motors, faulty transmissions, faulty odometers and bad odors (a problem to which Chinese consumers are particularly sensitive). Most notably, according to market research firm J.D. Power, problems are far more common in Chinese NEVs than in traditional Chinese-made cars.

https://www.bloomberg.com/opinion/articles/2019-03-20/qualit...

blazespin2• 7 years ago

The problem is capitalism and not really 7-11. If 7-11 didn't do this, family mart would and the guy would probably lose his store altogether.

Capitalism doesn't care about people or the distress they feel during transitions. It's very effective at generally raising up the living standards of all people, but can be pretty inhumane at times when dealing with certain groups of people who's skills and services are becoming obsolete.

The only choice really is retraining and switching careers and having social safety nets. The other alternative, socialism, just spreads the pain across the entire world.

Our only realistic chance at reducing global poverty anytime soon is via capitalism. Sucks for this 7-11 owner, but that's how it goes.

ako2• 7 years ago

Are you really sure that capitalism will reduce global poverty?

The core of capitalism is competition. This may result in higher quality and larger choice, but if these are sufficient enough it will in the end result in lower prices. This has to be done through efficiency but will also result in lower wages.

I think unconstrained, uncontrolled capitalism will result in 90% of the global population working very low income, replaceable jobs, or being completely replaced by automation.

ixtli2• 7 years ago

Yeah. The social uplift only happens to people connected in some way to where the capital is accumulating. If you live where the capital is flowing from you're gonna have a bad time.

icebraining• 7 years ago

I think unconstrained, uncontrolled capitalism will result in 90% of the global population working very low income, replaceable jobs, or being completely replaced by automation.

I think that's likely; after all, capitalism already replaced the jobs of 90% of the developed world population with automation and other efficiencies: that's why most of us no longer work in agriculture.

Now, was that a net negative development?

Causality1• 7 years ago

I admire the courage of people who run their own business but I don't think that life would ever be for me. I love working 40-48 hours a week and leaving my work at work when I go home.

h1d• 7 years ago

If you have confidence in your skill, can stay in the field you like and get double the average, why not?

ixtli2• 7 years ago

The problem isn't convenience stores (I lived in japan for 1.5 years and lemme tell you, they're wonderful and everyone loves them.) It's capitalisms completely unregulated growth in situations where no one could possibly benefit. They call it competition, but that's not what this is in practice.

jen729w• 7 years ago

See also: Australia. 7-Elevens are everywhere [1] and the stories of underpaid workers are commonplace [0].

[0] https://www.theguardian.com/commentisfree/2016/may/12/7-elev...

[1]: In the major metropolitan areas.

baroffoos2• 7 years ago

I'm in Adelaide and convenience stores are not super common. There is usually one on each major street but nowhere near as much as the other states. When I was in Sydney it was a massive shock to see 711 everywhere. It was quite often to have 2-3 of them within my field of vision.

avinium• 7 years ago

The first time I went to Sydney (late 90s) I remember thinking the same - 7-11's everywhere.

There was definitely an explosion of convenience stores across Adelaide - perhaps 2010 until 2015? But they then all shuttered in quick succession.

wiggler00m• 7 years ago

One advantage of the prolific Japanese convenience store (or "konbini") is that any improvement in the underlying franchise system can be rapidly deployed to all franchisees (like nodes in a network). This is true of many franchises, but the konbini are exceptionally prolific, so this effect is magnified.

For example, if there is an opportunity to increase efficiency, or reduce costs or environmental impact, it would be relatively easy to deploy this throughout an entire franchise, as compared with heterogenous stores.

As for the issue of opening hours, labour shortages and demographic trends (the population is aging and decreasing) are significant. I am only aware of two likely solutions which are not mutually exclusive: (1) immigration; and (2) automation, ie. robots. Increasing the fertility rate might also address this issue, but seems less likely to happen.

pyrale2• 7 years ago

I guess smaller opening times would also solve the issue. I have yet to understand why societies tolerate such things as stores open at 3am, given the productivity it has, and the implications for workers.

TulliusCicero3• 7 years ago

There's nothing inherently wrong with stores open odd hours. Some people like to keep odd hours, some have to because of the nature of their job (a lot of maintenance/repair/cleaning stuff is done at night), so some stores being open works with that. And of course there are places like clubs where night hours make more sense.

This situation in Japan seems unusual, usually a business would only stay open late if there was actually a reasonable amount of demand at that time.

ilaksh• 7 years ago

It seems like 7 Eleven could help coordinate hours so that one owner could rest but a nearby store would be open at that time.

bkor3• 7 years ago

The article specifically states that 7/11 is preventing various stores from not being open 24/7. E.g. small store, wife is utterly ill, 7/11 doesn't care; store needs to stay open.

It seems they like the owner exhausted so they cannot do the things which makes sense. E.g. to sell the food which is close to the expiry date instead of throwing it out. Yet another example from the article.

SapporoChris2• 7 years ago

The article specifically states that 7/11 was preventing various stores from not being open.

“We will let the owners (of franchise stores) make the final decision (on whether to shorten operating hours),” said Seven-Eleven Japan President Fumihiko Nagamatsu.

There is a 7/11 near the Sapporo Zoo that is closed early in the evening.

coldtea• 7 years ago

How close another franchise would allowed to be should have been part of the contract when opening a store.

E.g. "no second franchize store in 1 mile radius" (of course this could differ from place to place based on market and population density).

esrauch• 7 years ago

When I was in Japan there were some cases of four 7/11s visible at once without turning my head, so I think you can set your sights a lot lower than a one mile radius.

mft_3• 7 years ago

It would seem that this is ripe for automation, no?

In fact, I've been surprised for some time that there hasn't been a greater development/proliferation in this area. It would seem that a large (room-sized) refrigerated vending machine offering a range equivalent to a small convenience store is already highly technologically feasible, and would probably be far more cost efficient (smaller footprint, much lower staffing requirements) than running a convenience store.

typeliftr• 7 years ago

I feel like vandalism and theft would be a big problem in this scenario.

kibibyte• 7 years ago

Outside of Japan maybe, but it's something that would work in that culture. From my last trip to Japan a couple of years ago, I saw vending machines everywhere. In urban areas, there would be one every couple of city blocks in urban areas; I even encountered a few in the middle of park trails in relatively more secluded areas (e.g. more or less the middle of a forest). All these vending machines appeared unattended, but they always had inventory.

asdff5• 7 years ago

It always comes down to that, but what's stopping a company from hiring someone located anywhere in the world with a big monitor to stare at 20 feeds and just hit an alarm and call the cops when people get disgraceful? Have the cams only flip on with motion even. Could probably do it for dollars a day in some countries.

SenHeng2• 7 years ago

Has anyone noticed how FamilyMart seems to be in a war of attrition with 7-11. There's always one nearby another.

Lawson seems pretty fine being on their own.

ferros• 7 years ago

Don't underestimate the safety factor. Walking around late at night past scores of open stores presents a significantly different backdrop to other cities around the world where everything is closed and all the lights are off.

hrktb• 7 years ago

It’s a bit brushed over and sprinkled in the article but this part was brutal:

Last year, when Fukui Prefecture was hit by the heaviest snowfall in decades, it was discovered that a 7-Eleven franchise store was banned by the parent company from closing temporarily even after the store owner’s wife fell ill from overwork.
He lost his wife in May last year and he “was on the verge of falling ill or dying from karōshi (death from overwork),” he said.

It summarizes for me how extreme the relation is between franchise and the owners, how little escape they have from that abusive bind.

fnord77• 7 years ago

The owner, in his 40s, said he works 500 hours a month.

how is this even possible? That would be almost 17 hours a day, 7 days a week for a 30-day month.

zimpenfish2• 7 years ago

Given it's 24/7, there's only 10 employees, and "the store will be in the red if he hired someone for night shifts", 17 hours a day seems plausible for the owner/manager (if somewhat unhealthy.)

hudibras4• 7 years ago

It's not; he's lying.

zimpenfish2• 7 years ago

Do you have a source for that claim? The article doesn't give me enough information to judge but I might have missed something.

Mikeb85• 7 years ago

It's a pretty solid assumption in economics that in an industry with perfect competition, profit margins eventually converge with the benchmark interest rate.

tokyoHacker• 7 years ago

Inspite of having 7/11 at every nook and corner ( specially in Tokyo/Yokohama), it would be hard to get a sandwich, obento(お弁当) or onigiri if you go to a convenience store (コンビニ) just after peak lunch time.

The realities of 'owning' a Japanese convenience store

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