7-Elevens in Japan
August 23, 2024
With a promised selection of steamed buns, instant ramen, refreshing juices, and all sorts of sweet treats with every visit, konbinis (Japanese convenience stores) have securely embedded themselves into the lively culture of Japan. Of these stores, 7-Eleven is undoubtedly the dominating attraction to both locals and tourists from all around, and their success has received a significant amount of attraction over the past few weeks. This week, Alimentation Couche-Tard, a convenience store company based in Canada, offered a takeover proposal to the Japanese company that owns 7-Eleven. The Japanese company is reluctant to transfer the popular, Japanese-cultured store into foreign hands. This concern is best put by Hirotaka Watanabe, an independent retail analyst, who said, “Selling 7-Eleven to Couche-Tard would be equivalent to Toyota becoming a foreign company.”
Interestingly, 7-Eleven did not originate from Japan; in fact, it was first established by Southland Corporation in 1927 in the United States. This convenience store began as an ice house that sold ice blocks to keep refrigerators cool but quickly expanded to a widely-known store that sold everything from microwaveable foods to over-the-counter medicine. In 2005, after 100 successful 7-Elevens opened in Japan, the convenience store chain transferred its ownership to Japan through Seven & i (a holding company). From then on and till this day, Seven & i has over 21,000 7-Eleven stores operating 24 hours a day and 365 days a year.
Year after year of 7-Eleven’s dominating footprint in the convenience store world, Couche-Tarde has longed to acquire this successful chain to create one of the world’s largest retail groups. However, there were significant barriers that needed to be addressed, so Seven & i quickly set up a special committee to discuss the matter. Couche-Tard and Seven & i have different operating styles, which will greatly restrict the continued popularity of this successful chain store. This is because Seven & i prioritizes variety in their stores, resulting in 70 percent of their products being replaced annually. One of the biggest issues being brought to the table is whether Couche-Tarde will be able to present a satisfaction proposal that outruns the current profit that Seven & i makes from its convenience stores. Mr. Watanabe explains that Japanese 7-Elevens are quite different compared to those in the United States. Having visited a few American convenience stores himself, he concludes that Japanese convenience stores are unique in their own way, and can bring the Japanese people together.