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Japanese consumers tighten spending

Once a hallmark of Japanese consumer culture, convenience stores are the latest casualty of the worldwide recession.

A Japanese customer buys a few snacks at Lawson, one of Japan's popular convenience store chains with about 10,000 shops nationwide. (Sonia Narang/GlobalPost)

OSAKA, Japan — As rush-hour travelers spill out of the busy Japan Railways train station, some walk into the bright, fluorescent-lit convenience store just outside the exit gates.

The clean, organized store is a world unto itself: rows of spotless shelves stocked with everything from milk cartons to packaged underwear to freshly baked goods. Clerks greet customers with a loud “Irrashimase,” or “welcome.”

Located on almost every corner of every street, these 24/7 convenience stores, called “combinis," are a mainstay in Japanese society. Similar to the American 7-Eleven store concept, the convenience store caters to every kind of Japanese person. Businessmen grab a pint of beer on their way home from work, kids browse through comic books and college students pick up a cheap lunch in a to-go box.

But Japan’s convenience stores are in trouble — and that means Japan could be, too.

japan convenience store
This Family Mart in Osaka, Japan, is one of more than 15,000 stores in the chain.
(Monica Narang/GlobalPost)

Despite the popularity of these one-stop shops, overall sales at convenience stores are down 6.3 percent from one year ago, and declined for the sixth month in a row, according to the Japanese Franchise Association. The report also stated average spending per customer dropped 3 percent for the 12th consecutive month.

As Japan’s economy tries to pull itself out of a nationwide recession, many Japanese consumers such as Rieko Emoto, 70, have opted to shop at discount food supermarkets instead of convenience stores.

“I usually visit the nearest supermarket because prices are reasonable,” Emoto said.

On average, supermarket food prices are about 20 percent cheaper than convenience store prices.

Japanese spending declined when the economy worsened last year, said Osaka University economics professor Takeshi Abe. “Japanese people are now saving money for daily commodities,” he said.

Once known for their tendency to buy expensive goods, the Japanese have started cutting costs, a trend that could continue well into the country’s future economic recovery.

With more customers heading to large discount markets, Japanese convenience store chains have struggled to maintain the strong sales of years past. The Circle K Sunkus chain reported “lackluster sales,” in its latest financial statements. Sales fell 5 percent during the first three quarters of last year.

“Consumer spending was generally weak,” Circle K Sunkus stated in its financial report. “With no upturn in employment conditions or income levels, consumers have further tightened their belts and have shown increasingly stronger preferences for low prices,” the report said.

One of Japan’s most popular convenience store chains, Lawson, opened its first store in Osaka 35 years ago and now operates about 10,000 stores across the country. Lawson reported that sales last month dropped about 5 percent compared to one year ago. Sales began to decline last July, when the number of customers decreased, along with the amount of spending at stores.

At Family Mart, a mega-chain that operates stores in a number of Asian nations including Japan, daily sales declined 7 percent in July and continued to decline through the end of the year.

Emoto said a convenience store near her home closed down last year after several failed attempts by various franchises, including a Family Mart. She thinks the overabundance of convenience stores may have led to a decline in sales.

http://www.globalpost.com/dispatch/japan/100201/economy-convenience-stores