TOKYO REPORT: Seven-Eleven Japan Testing Shorter Operating Hours

Tokyo, April 1 (Jiji Press)--Seven-Eleven Japan Co., the nation's biggest convenience store chain operator, has started testing shorter operating hours at a number of outlets, in the wake of an Osaka franchisee's revolt against its policy of keeping stores open around the clock. The franchisee in Higashiosaka, Osaka Prefecture, closed his store late at night in February, despite Seven-Eleven's opposition, because all of his part-time night workers had quit and his wife had died. The owner of the store was exhausted after successive days of night work, but Seven-Eleven rejected his request for assistance. Seven-Eleven, a unit of Seven & I Holdings Co. <3382>, even suggested that it would terminate the contract with the franchisee and impose a penalty of 17 million yen. The case became widely known through media reports, arousing online criticisms of Seven-Eleven for its response. A similar case occurred in Fukui Prefecture in February last year, when the company turned down a franchisee's plea to approve a temporary shutdown of his store because of heavy snowfalls. After the store owner and his wife worked around the clock, she collapsed from overwork and was rushed to hospital. In late February this year, a group of franchisees asked Seven-Eleven for collective talks in a bid for shorter operating hours. But the request fell on deaf ears, as the company does not regard franchise store owners as "workers" who are parties to collective bargaining. Currently, more than 90 pct of convenience stores belonging to Seven-Eleven and other big chains operate 24 hours a day because the production of merchandise and logistics are based on round-the-clock operations. "If a store closes at the dead of night, customers tend to desert it," Sadanobu Takemasu, president of Lawson Inc. <2651>, said. "Sales also tend to drop during other operating hours." Shorter operating hours are permitted as exceptions only for stores inside office buildings and other facilities that close late at night. Meanwhile, convenience stores are struggling to hire late-night workers and hikes in minimum wages have sent labor costs rising sharply. Against this backdrop, calls from store operators for shorter operating hours are growing. Convenience store chains introduced round-the-clock operations in the 1970s. The sustainability of the business model is increasingly questioned amid changes over more than four decades since then, such as the dwindling and aging of the population and depopulation in rural areas. FamilyMart Uny Holdings Co. <8028>, therefore, has halted late-night operations on a trial basis at stores in certain locations, including Kyoto, while Lawson has permitted 40 stores to operate shorter hours for their own particular reasons. Smaller chains, including Secoma Co. in Sapporo, Hokkaido, and Poplar Co. in Hiroshima, allow stores to close late at night. Seven-Eleven started testing shorter operating hours, such as from 7 a.m. until 11 p.m., at 10 of its corporate-run stores on March 21 and plans to expand the experiment to franchise stores. Some 80 franchisees are willing to participate in the test, which will continue for several months, according to the company. "We'll maintain the principle of keeping stores open around the clock," a Seven-Eleven executive said. "But the conventional store-opening strategy, store locations and operating hours cannot be considered sustainable when the effects of depopulation and other developments are taken into account." "We cannot survive unless we change our business model in line with structural changes," the executive said. END