Japan's convenience stores scramble for growth opportunities

7-Eleven is expanding its space for liquor, whilst FamilyMart has installed freezers.

Japan’s convenience stores are looking to explore new ways to return to growth, as stores such as 7-Eleven, Lawson, and Ministop recorded a decline in sales for the fiscal year ending February 2021, data from IGD revealed.

During the period, 7-Eleven saw a 2.8% decline, Lawson recorded an 8% fall, and Ministop posted a 7.4% drop. As such, driving differentiation and defining the role of the convenience store have become important for all c-store retailers in the country.

In particular, 7-Eleven is expanding sales space for liquor, whilst FamilyMart has installed freezers at all of its stores nationally to cater for food-for-later missions.

Some retailers are also starting to test more top-up style product ranges similar to Aeon's minimart concept My Basket. The banner has expanded to 921 stores, opening more than 50 over the last year, and has been particularly popular since the pandemic.

At the same time, customer footfall fell 10% and 14% for 7-Eleven and Lawson, respectively. There has been some seasonal variability month-on-month, but overall footfall has shown no signs of recovery compared to pre-pandemic levels, the report stated.

“Should customer footfall stay at these levels, Japan’s convenience sector will continue to shrink. Average spending per customer would need to rise significantly because organic store expansion has also slowed down,” IGD’s senior retail analyst Charles Chan said.