Konbini Craze: A Fun and Fascinating Look at Japan's Convenience Store Revolution

Since Japan's first convenience store opened near Tokyo Bay almost 50 years ago, these stores have become a ubiquitous part of the country's culture. Customers visit them not only for groceries but also for a variety of other services, such as financial services and package delivery. However, in recent years, the domestic convenience store market has become saturated, and competition has increased. A labor shortage has also become a serious issue, causing some stores to give up 24-hour operations and introduce unmanned cash registers to adapt to changing times.

Established in November 1973, Seven-Eleven Japan Co. opened its first store in Tokyo's Toyosu district in May 1974, following a licensing agreement with Southland Corp., the U.S.-based operator of the brand. Today, Seven-Eleven Japan is a product of Japanese culture recognized worldwide. Other chains, such as Lawson Inc. and FamilyMart Co., started franchise operations shortly after Seven-Eleven's establishment. The industry experienced rapid expansion, meeting demand from customers who wanted to purchase groceries outside traditional store hours.

 

The first 24-hour convenience store opened in 1975, and plastic-wrapped rice balls were introduced in 1978, becoming a smash hit at a time when they were widely considered to be a type of food only made at home. In 1987, convenience stores enabled customers to pay utility bills at the cash register utilizing bar code scanning, and in 1999, ATMs were installed, allowing people to withdraw cash.

The number of convenience stores in Japan skyrocketed from 6,308 in fiscal 1983 to 58,340 in fiscal 2018. However, this number fell to 57,544 in fiscal 2021 due to industry saturation, according to data from the Japan Franchise Association. Meanwhile, a shrinking workforce has forced some convenience store owners to work long hours, leading franchise operators to introduce shorter opening hours to address the issue.

 

To stay competitive, chains like FamilyMart have begun introducing unmanned cash registers, with a goal of increasing the number of stores with such labor-saving measures to about 1,000 by fiscal 2026. Other chains are also ramping up their efforts by launching frozen foods supervised by famous restaurants and offering meals cooked in-store.

 

Despite these efforts, customers have not yet returned to pre-pandemic levels. According to Tsuyoshi Yoshikawa, an analyst at SMBC Nikko Securities Inc., convenience stores must now compete by developing products that can win customers and raise average customer spend.

 

As Japan's convenience store industry continues to adapt and evolve, it's clear that these stores have become an integral part of the country's culture and way of life. With new challenges and competition on the horizon, what innovative solutions will Japan's convenience store operators come up with next to keep customers coming back? Only time will tell, but one thing is for certain: the humble convenience store has come a long way since its inception, and it's not done surprising us yet.