Seven-Eleven Japan Allows Stores to Halt Late-Night Operations

October 22, 2019

Tokyo- In a shift from its around-the-clock store operation policy, Seven-Eleven Japan Co. said Monday that it has decided to allow any of its some 20,000 franchise convenience stores to halt late-night and early-morning operations.

In related guidelines, the leading Japanese convenience store operator clarified procedures that stores should take for switching to shorter operating hours.

The move came after the owner of a franchise store in the western Japan prefecture of Osaka canceled its 24-hour operations in February due to a labor shortage, leading to a feud with the company. After the store owner's action drew much media and public attention, the unit of retail giant Seven & i Holdings Co. continued dialogue with franchise store owners on shorter operating hours.

The convenience store industry is now at a critical juncture after expanding earnings rapidly on the back of around-the-clock operations, with the decision by Seven-Eleven Japan expected to trigger similar moves among rivals.

Based on the guidelines, eight Seven-Eleven stores will be allowed from Nov. 1 to close between 11 p.m. and 7 a.m. Including the eight, more than 200 Seven-Eleven Japan franchise stores now operate for shorter hours on a trial basis.

To make it easier for franchise stores to cancel late-night and early-morning services, the guidelines stipulate how they should treat employees and a schedule for extending the trial period to up to six months. Partial contractual changes, including on reductions in the amount of monthly royalties franchise shops pay to the company, were also set out.

At a press conference in Tokyo on Monday, Seven-Eleven Japan President Fumihiko Nagamatsu said that the company "will act flexibly over operation times in line with changes in society," while noting that there is no change in the 24-hour operation principle.

In a survey conducted by Seven-Eleven Japan in July, about 2,200 stores, or more than 10 pct of its total franchise shops, said that they hoped to join or were considering joining the trial on shortened operating hours.

Suspensions of late-night and early-morning services could spread in the convenience store industry amid acute manpower shortages, industry watchers said. The industry ministry has been encouraging the sector to draw up guidelines on shortened service hours that reflect work conditions of franchise store owners.Jiji Press