Why Convenience Store Chain 7-Eleven Is An Indispensable Part Of Life In Japan
By Kiuko Notoya and River Akira Davis
In Japan, convenience stores are celebrated. Clean and bright, they’re filled with fresh and affordable lunch boxes, steamed buns, and stews in the winter. Celebrity chef Anthony Bourdain once called them “the one vice” he couldn’t give up.
For many residents, the more than 55,000 cheerful, bell-filled shops known as konbini are an indispensable part of daily life. Millions of people flock to the stores daily to pick up groceries, send packages and pay bills. Japan’s largest konbini chain, 7-Eleven, is also its most famous. It’s understandable that a rival company would want to get in on the action.
This week, Seven & i Holdings, the Japanese company that operates 7-Eleven, reported that it had received an unsolicited takeover proposal from Alimentation Couche-Tard, a Canadian convenience store chain.
The status of 7-Eleven stores as a cornerstone of Japanese society also means that Japan is unlikely to be willing to divest them, despite growing pressure on Japanese companies to be open to foreign acquisitions.
7-Eleven is “one of the best brick-and-mortar stores in the world,” according to Hiroaki Watanabe, an independent retail analyst. Selling 7-Eleven to Couche-Tard would be “like Toyota becoming a foreign company” for Japan, he said. Today, there are more than 21,000 7-Eleven stores in Japan and they operate in 20 countries and territories. In the United States, Seven & i is exploring ways to recreate the coveted Japanese convenience store experience. One possibility: introducing ramen noodles.
Unlike Japanese konbini stores, North American convenience stores are often seen as outlets for packaged snacks, drinks, and in many cases, gasoline.
When we think of hot food in supermarkets, we often think of a lonely hot dog spinning in an induction oven for hours. Quebec-based Couche-Tard operates many of these supermarkets in the United States under the Circle K brand.
Japan has long been part of Couche-Tard’s global ambitions. If successful, Couche-Tard’s acquisition would not only be the largest overseas acquisition of a Japanese company, but would also create one of the world’s largest retail groups.
Following the news of Couche-Tard’s preliminary takeover bid, Seven & I announced that it had set up an independent, special committee to review the bid. Analysts point to significant obstacles that would likely make a takeover of Seven & I impossible.
The scope of the holding company means that the takeover will be subject to even stricter scrutiny by the Japanese government.
There are also major differences in the way Couche-Tard and Seven & I run convenience stores. The Apanese konbini operators are known for their rapid development of new products, such as themed products that are only available during the fleeting cherry blossom season.
Japanese konbini operators are known for their rapid development of new products, such as themed items that are only available during the fleeting cherry blossom season. A typical convenience store in Japan offers about 3,000 products, 70 percent of which are replaced annually, according to analyst Watanabe.
A large portion of Seven & i’s operating profit comes from its Japanese convenience stores and Couche-Tard would need to come up with a compelling proposal showing how the company could improve these core businesses, he said.
Mr. Watanabe once took a two-week drive across the United States, studying convenience stores along the way — and was not impressed. Any acquisition proposal for 7-Eleven would be a challenge because Japanese convenience stores are “completely different and unique,” he said.
The first 7-Eleven store in Japan opened in 1974 in a quiet bayside neighborhood in eastern Tokyo. On a Friday morning, it was bustling with office workers, students and parents with young children.
Sakura Kobayashi, 23, who works nearby, stopped by to buy a salad and an onigiri rice ball — a specialty at Japanese convenience stores. The dishes at 7-Eleven have a taste that feels “familiar” to her and her coworkers, she said.
Outside a 7-Eleven in central Tokyo, Yuta Matsumura, a 26-year-old office worker, ate a cream-filled pancake dessert he had just purchased. He said he typically stopped at a 7-Eleven at least three times a week, sometimes to buy lunch items such as beef rice bowls.
But it’s really the sweets that lure Mr. Matsumura. “They’re not too sweet, like we Japanese like,” he said. “7-Eleven desserts are the best.”
©2024 The New York Times News Service
First publication: Aug 25, 2024 | 11:18 PM IST