Fewer Outlets, Higher Quality
The number of convenience stores, or "konbini," in Japan continues to decline, with the latest figures showing a year-on-year drop of 119 stores to 55,620 in March 2023. This marks the 22nd consecutive month of decline since June 2022.
Despite the shrinking number of stores, the industry's combined annual domestic sales reached a record high of over 11 trillion yen ($72.66 billion) in 2023. This suggests that while the number of stores is decreasing, the remaining stores are becoming more profitable.
Several factors contribute to this trend. Firstly, the konbini market is becoming increasingly saturated, with fewer locations offering profit potential. Secondly, franchisees are hesitant to open new stores due to rising personnel costs, utility expenses, and labor shortages.
In response to these challenges, major konbini chains are focusing on improving the quality of their stores rather than simply opening more outlets. This includes introducing compact, unstaffed stores with self-checkout counters and smartphone payment options. These stores are often located in office buildings, rest areas, and other convenient locations.
Additionally, konbini chains are exploring partnerships with other businesses to expand their reach and offer new services. For example, Lawson is considering selling its products at mobile carrier KDDI's 2,200 cellphone shops.
Overall, the konbini industry in Japan is undergoing a significant transformation. While the number of stores is declining, the remaining stores are becoming more profitable and offering a wider range of services. This trend is likely to continue in the coming years as konbini chains adapt to changing consumer needs and market conditions.