
The realities of 'owning' a Japanese convenience store - Ultramanoid
https://www.japantimes.co.jp/news/2019/05/27/national/behind-scenes-24-7-service-realities-owning-japanese-convenience-store/
======
CydeWeys
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
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
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.

~~~
bkor
Are you sure about that fact? Pharmacists went on strike in Netherlands this
year. Another reply mentioned Poland. It seems there's no EU rule, or maybe
it's more that some still need to be open.

The majority of what a pharmacy provides is repeat customers anyway. Despite
regular customers planning badly pretty much all the time, the majority gets
their medicine for a minimum of various weeks.

The participation of the strike in Netherlands wasn't high. It was pretty last
minute idea by one frustrated worker. The reason was the increase in the
aggression towards the people working in a pharmacy.

Source: I know someone working in a pharmacy.

~~~
mariuolo
> The reason was the increase in the aggression towards the people working in
> a pharmacy.

What kind of aggression?

~~~
Wohlf
Aggression towards pharmacists is usually from addicts who want drugs.

------
ferros
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.

------
RyJones
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.

~~~
CydeWeys
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).

~~~
Freak_NL
> 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.

~~~
masklinn
> Once you know those nothing beats pulling a warm can of black coffee from
> the machine.

I'd say pulling a bottle of warm lemon / lime tea was even better, especially
with travel-sore-throat.

> low prices

Aside from providing warm drinks, that's the big ticket right there: IME,
european vending machines are basically predatory, they're way overpriced for
what they provide and rely on necessity or impulse rather than just doing good
business.

Japanese vending machines are omnipresent, well-stocked, with good selection
of useful stuff, but more importantly you don't feel like you're throwing
money down the drain when you're buying from one. The prices are obviously
higher than in a 'mart, but they're not "$5 for a bottle of coke" overpriced.

~~~
Kurtz79
"Aside from providing warm drinks, that's the big ticket right there: IME,
european vending machines are basically predatory, they're way overpriced for
what they provide and rely on necessity or impulse rather than just doing good
business."

Absolutely agree: I don't remember the last time I bought something from a
public vending machine (or even seeing someone else doing so) here in Spain.

Prices are anywhere between 2/3 times the price you would buy at a
supermarket, an Airport shop kind of markup: whatever you get tastes bad as
you feel swindled.

When I was in Japan it was rare if I didn't get something from a machine any
given day.

~~~
irq11
Believe it or not, but even in Japan, vending machine prices are 2-3x what
you’ll pay in a supermarket. You just don’t notice it as much because prices
are low in general.

A supermarket can coffee will cost maybe 60-100円 for what you pay 120-200円 in
a vending machine.

~~~
CydeWeys
I didn't find that to be true to such a degree.

I was tracking the prices of vending machines pretty closely in Japan, and if
you didn't jump at the first one you saw and waited until a more out of the
way one, you could typically find almost anything in the 100-120 yen range. My
favorites were the "100 yen special" machines where most or all items were 100
yen. The prices were in large red lettering to emphasize the deal. Prices
could go up to 160 yen or higher in the vending machines in tourist areas,
especially the ones inside ticketed attractions.

100-120 yen was around the price you'd pay for those same drinks in a
convenience or grocery store, with the only exception being bottled water. You
can find bottled water much more cheaply in the grocery stores than anywhere
else, well under half the price by volume. This is a pretty universal rule of
travel that I've found holds true everywhere.

~~~
irq11
Those 100 yen machines are rare. I lived in Kyoto, and can recall seeing only
one in the city. People would go out of their way to use it. More typically,
you will see machines that have 120円 prices by reducing sizes. Buy the same
drink in the conbini next door, and you’d get twice the volume.

Regardless, if you’re in a place where vending machine prices are lower than
usual, it only means that the store prices are lower still. There’s no magic
here; the vending machine operators are making a healthy profit.

~~~
CydeWeys
For what it's worth I saw more of them in Kyoto than in Tokyo. I was staying
around here:
[https://www.google.com/maps/@35.0086507,135.7541648,17.51z](https://www.google.com/maps/@35.0086507,135.7541648,17.51z)

It did bother me that I could never tell what the actual size of the drink was
going to be. Is it in kanji, or is it just not listed at all? I definitely had
a situation where I was expecting a full normal sized bottle of green tea but
got a smaller one.

------
bane
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.

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

~~~
Kurtz79
I was in Kobe a few weeks ago and it was the same, all over the city center.

As a consumer honestly there is little to complain, they ARE very convenient.

But grandparent is correct: a lot of items are expensive for what they are
(some of the "fresh" meals cost as much as a eating in a normal ramen/noodle
place on the street), so you pay for the convenience.

~~~
ekianjo
> I was in Kobe a few weeks ago and it was the same, all over the city center.

That's only in Sannomiya. Go in Suma, Nada, Rokko, you won't find that many
combinis within a very short walking distance. The city center is appropriate
for this kind of density because there's 3 different train lines (and 4 if you
consider the metro) stopping right at the same place transporting hundreds of
thousands of people every day.

------
frequentnapper
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.

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

------
wiggler00m
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.

~~~
pyrale
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.

~~~
TulliusCicero
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.

~~~
pyrale
The "Some people like to work odd hours" is pretty tired in my opinion. Most
people who work these hours are doing it out of necessity.

If execs were forced to work whenever some of their employees work, their
imagination about who likes what would change dramatically.

------
hrktb
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.

------
baroffoos
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?

~~~
patio11
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
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.

------
jen729w
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...](https://www.theguardian.com/commentisfree/2016/may/12/7-eleven-
is-the-tip-of-the-iceberg-in-worker-exploitation-so-whos-turning-a-blind-eye)

[1]: In the major metropolitan areas.

~~~
baroffoos
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
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.

------
jorblumesea
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".

~~~
patio11
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.

~~~
jorblumesea
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.

~~~
aidenn0
Talk to any McD's franchisee about all-day breakfast if you want a comparably
"unpopular with franchisees" brand requirement.

~~~
TulliusCicero
I like the all day breakfast because it can be nice if I stayed up really late
the night before and I'm getting "breakfast" at noon. I don't see the point of
it past, like, 1 or 2 though.

~~~
asdff
The 24h mcd by me stops serving dinner at 2am, right when the drunks flood the
lines and there are two people working the entire store. Possible reason right
there.

------
raverbashing
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
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?

~~~
AmVess
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.

~~~
WarDores
Every CFA owner/operator (you technically don't franchise) I know (n=3) says
those are basically money-printing machines.

------
coldtea
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
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.

------
Causality1
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
If you have confidence in your skill, can stay in the field you like and get
double the average, why not?

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

~~~
kibibyte
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.

------
tokyoHacker
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.

------
SenHeng
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.

------
fnord77
> 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.

~~~
hudibras
It's not; he's lying.

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

------
vkou
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.

~~~
microcolonel
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
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.

~~~
Scoundreller
Depending on the tax system, being able to structure yourself as a « business
owner » can mean more money in your pocket than being a salaried manager.

------
ilaksh
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.

~~~
bkor
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.

~~~
SapporoChris
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.

------
delhanty
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.

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

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

~~~
adventured
> Overwork is better than no work.

No work is rarely the trade-off issue in Japan. They operate for quite
different margins and labor practices than eg the US.

They haven't had an unemployment rate over 5.5% in 40 years. The typical rate
has been 3% to 3.5% for the last 30 years - a time in which they've suffered
from perpetual economic stagnation and zero net growth. It's around 2.5% right
now.

Japan is losing population while simultaneously having an extraordinarily low
unemployment rate. Automation is the only path forward, they should be
pursuing it with as much vigor as possible. If you're Japan, as your
population contracts, the ideal is to wipe out all convenience store jobs and
push the labor force higher up the ladder whenever possible.

~~~
seanmcdirmid
> Automation is the only path forward, they should be pursuing it with as much
> vigor as possible.

Well, they could always do more immigration. Its not like they don't do some
already, and I think the Japanese will become much more open to it in the
future.

~~~
m_mueller
As far as I understand Japan is already opening. Their new Visa score system
is quite broad.

~~~
MarkSweep
Wow, they made the point based thing quite a bit easier: [http://www.immi-
moj.go.jp/newimmiact_3/en/pdf/171110_leaflet...](http://www.immi-
moj.go.jp/newimmiact_3/en/pdf/171110_leaflet.pdf)

For example, you get points for JLPT N2 (previously only N1) and for patents
you only need one (previously three, if IIRC).

~~~
Scoundreller
The Ministry of Justice operates their immigration system???

------
blazespin
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.

~~~
ako
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.

~~~
icebraining
> 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?

~~~
Moru
It was for the unemployed farmers help that is no longer needed and is now
stuck with a house in a town where the prices have dropped way below the
mortage on the house and 60 km to the closest store/gas station.

~~~
Camas
That some people might be worse off says nothing about the net effect.

------
ixtli
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.

