Shukan Toyo Keizai has an article on the state of convenience stores in Japan. Amazingly, all the major chains are planning to grow their number of stores (where can they even fit these days?). Anyway, here are some of the more interesting takeaways:
- There are 42,204 convenience stores in Japan, according to the industry association. And they are still growing!
- A major source of new store openings is the relocation or reconstruction of existing stores. In FY2008, 7-11 Japan opened 874 stores, of which 429 were relocations of existing stores. Many of the relocations are to make room for parking lots following road widening or other changes to the market. (I recall a local Sankus did this about a year ago, now they are about a block further away with a shiny new parking lot).
- Convenience stores earn most of their money off royalties from franchise owners. But with so many stores out there, it’s getting harder to find new people willing to make the investment. Now is a relatively good time to look for new franchise owners thanks to the recession. People tend to be more willing to start up a convenience store franchise when the economy is bad. To combat this difficulty, recently convenience store companies have been trying to get franchise owners to invest in multiple stores.
- 80% of people who sign up to be convenience store franchise owners are men in their 30s and 40s. To own a convenience store, you usually must work at one for a year as a trainee, but you can shorten this by taking an exam after 6 months.
- To own a Circle K usually requires a 3 million yen initial investment, but incentive programs can reduce this to 650,000 yen.
- As with many chains, convenience stores exercise tight control of their franchises. Apparently, they even hire the clerks. Many convenience store companies have their own placement services to do the hiring. This is no doubt a key source of the foreign workers we see on a regular basis.