An Unlikely High-tech Incubator: Japanese Convenience Stores

Japan’s convenience stores are experimenting with labor-saving technologies. Will consumers buy in?

Takanori Sakai works the graveyard shift four nights a week at the FamilyMart he owns in Himeji, a city in central Japan. He hasn’t hired someone for the slot, he says, because he can’t afford the higher pay employees demand these days. With competitors just down the street, Sakai is wary of raising prices to cover higher wages. “More and more stores can’t secure a profit,” he says.

Convenience stores are ubiquitous in Japan, numbering 55,310 as of January, according to the Japan Franchise Association. In total, they account for almost 17 percent of retail food and beverage sales. Holding the line on prices is increasingly difficult for franchisees and owners such as Sakai. The national unemployment rate has dipped to a 25-year low of 2.4 percent; to staff their stores in this tight labor market, franchisees in Tokyo, Osaka, and other cities have resorted to hiring foreigners, housewives, and the elderly—three categories of workers that many Japanese employers ignore. Meanwhile, minimum wages in the prefectures, which serve as something of a benchmark for retailers, rose by about 11 percent on average between 2013 and 2017.