"We are shortening operating hours"
Mitoshi Matsumoto opened the franchise in western Japan's Osaka Prefecture seven years ago. It was initially operating 24 hours. Recently, he decided to shorten hours after his wife, who had been helping him run the store, died last year and he found it difficult to secure enough workers amid the tight labor market. Matsumoto says his store has been chronically understaffed for some two years and that he made the decision after a long struggle for a solution. His store now opens from 6:00 AM to 1:00 AM the next morning.
Matsumoto runs the store under a franchise contract with Seven-Eleven Japan. The company told him that the shortened operating hours violates the contract. He says the firm ordered him to resume 24-hour operations and pay a penalty of about US$152,000.
Seven-Eleven Japan's franchise contracts mandate daily 24-hour operations at all stores, except for those at train stations, office buildings, and other facilities. The firm's contract with Matsumoto also includes a penalty for suspending around-the-clock operations.
The company says it negotiates with store owners and others to decide what to do when there are individual requests such as a change in operating hours. It says proper communication had not taken place between the company and Matsumoto. It promised to have talks with him, saying its headquarters will help him continue daily 24-hour operations.
Reasons for 24-hour operation
Staff shortages are worsening in Japan's convenience store industry. However, the big three -- Seven-Eleven Japan, Family Mart, and Lawson -- are reluctant to change their daily 24-hour business models.
One of the major reasons for this is the enlarged role of convenience stores. Since they launched around-the-clock operations about four decades ago, the stores have fulfilled various functions ranging from late-night shopping to government and banking services, such as the issuance of residence certificates and ATMs.
Convenience stores are also expected to function as government-designated public facilities which will provide food and goods to survivors in the event of major earthquakes and other disasters. The stores are already part of the social infrastructure, making it necessary for them to operate around the clock.
Store owners demand shorter hours
On February 27, a union of franchise store owners asked for collective bargaining with Seven-Eleven Japan. They wanted talks to decide under what circumstances they could reduce operating hours and take other measures to cope with staff shortages. The owners argued that they now have no say in changing business hours and must get permission from the company to do so.
The union says that in February last year, the owner of a store in Fukui Prefecture, central Japan, repeatedly asked its headquarters to let it close temporarily as its staff could not report to work because of heavy snow. But the union says the headquarters rejected the requests, leaving the owner with no choice but to keep the store open alone for more than 48 hours on end without sleep. The union's leader, Takanori Sakai, says the company needs to allow owners to shorten operating hours if the stores do not have to be in operation around the clock.
Seven-Eleven Japan says it has no intention of holding talks with the union in the form of collective bargaining as the two sides are not in a relationship of management and labor.
Experimenting with shorter hours
Yahoo Japan conducted an online survey to ask people how they felt about the issue, collecting 6,105 responses. Its results show that 93 percent do not mind if convenience stores halt daily 24-hour operations.
Seven-Eleven Japan will begin an experimental program in mid-March to examine effects of shortened operating hours. The firm will cut operating hours at the stores in Tokyo as well as Aichi, Hyogo, and other prefectures. They will operate from 7:00 AM to 11:00 PM and will be closed late at night and early in the morning. The company will use the results of the project to study responses from customers and analyze the impact on sales as well as deliveries of products, cleaning, and other operations. This may lead to a review of the firm's around-the-clock policy.
Toray Corporate Business Research's Chief Analyst Tomomi Nagai is well-versed in the convenience store sector. She says operators want their franchises to remain open for as long as possible because the stores are required to pay a percentage of their sales to the headquarters, and there are almost no areas left in the country where new stores can be set up. She points out that intensifying competition, worsening staff shortages, and rising personnel costs have been prompting store owners to complain about the current system. She says the operator has to reduce the burden on owners through measures such as introducing unmanned cash registers and allowing flexible closing hours at stores that see few customers at night.