How Japanese CVS operators are tackling labour shortages 

Date : 25 April 2019

The three leading convenience store chains in Japan are facing increasing challenges to hiring staff for their stores. Labour shortages driven by the country's ageing population is deepening and retailers opening new stores require new workers.

Discounts and benefits for workers

The current approach for many convenience store operators is to incentivise workers with benefits and discounts. The average wage for convenience staff is around JPY1,000 an hour, but varies based on location in the country.

Seven & i Holdings, which operates over 20,600 7-Eleven stores in Japan, opened a day care centre for employees on the second floor of a store in the northern city of Sendai in July. In April 2017, it began offering workers discounts on hotels and travel services.

The second largest CVS chain in the country, FamilyMart, is partnering with Iris Ohyama to offer part-time workers nationwide discounts of up to 60% on rice cookers and other appliances. While Lawson, which operates more than 14,300 stores, offers its employees discounts on DVDs and books, serviced by the retailer's subsidiary companies.

Automation part of the solution

At an exhibition in October last year, Lawson launched an unstaffed store concept, featuring a robot that can prepare food as per customer preferences, e.g. cook gyoza dumplings. About two years ago, we covered how Japan's Ministry of Economy, Trade and Industry is backing the introduction of RFID technology in retail. Since then, we have seen Japanese retailers in different industries trial this technology. Retailers are now working harder to retain and attract new employees, but also promote automation to drive efficiencies in-store.

Lawson testing unstaffed stores during early hours

To reduce the burden on store employees and compensate for labour shortagess, Lawson has announced that it will test unstaffed operations at two outlets for several months from this summer. The concept was first announced back in December 2017.

Unstaffed service hours will be between midnight to 5 a.m each day. While a staff member will be available to support during the trial, Lawson hopes the outlets will be fully operational without personnel in the future. Certain categories, including cigarettes, alcohol, and postage stamps will be unavailable for purchase during unstaffed hours.

Smartphone-based self-payment is already available at Lawson stores in Shanghai. If self-checkout is rolled-out to other times of the day in Japan, customers will be able to avoid long lines at cash registers during busy hours. It will also help drive in-store efficiencies and boost productivity.

FamilyMart UNY partners Panasonic Corp

FamilyMart UNY has partnered Panasonic Corp to introduce technology in its stores to drive in-store efficiencies. The first FamilyMart store using Panasonic technology has opened in Kanagawa, southwest of Tokyo. The retailer will test advanced sensors and artificial intelligence to help stores restock more efficiently, as well as self-checkout, digital displays and price tags.

A shrinking workforce has seen retailers reduce and test shorter operating hours. FamilyMart in Japan plans to test reduced hours at up to 270 of its stores in Tokyo, Akita and Nagasaki prefectures beginning in June.

FamilyMart’s UNY’s Representative Director and Executive Vice President, Takashi Sawada, said, “We are faced with a labour shortage, and the issue of 24-hour operations. There is no time to waste."

The retailer plans to invest JPY25bn (US$223m) on labour-saving technologies and continues to work on simplifying operational procedures to support its franchisees.