Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The realities of 'owning' a Japanese convenience store

japantimes.co.jp

Post reply on HN
Print view View original

11–20 of 233 posts

Re: The realities of 'owning' a Japanese convenience store

#11

Post by bane »

Klonoar wrote: post #5
bane wrote: post #3

Just came back from Japan and man are there too many convenience stores. Within any given area there is probably 6 to 7 stores within eyeshot and an easy walk. It's weird thinking that they are too convenient, but honestly they start to become pointless. More than once we simply walked by a few knowing that there would be another one just a minute or two more down the street. It's great that we could find something t…

I mean, I lived there for 5 years of my life and go back often... the alternatives open at 2AM only really exist in the tourist areas or the uber dense areas (Shinjuku, etc). Past 2, you're pretty much only eating conbini food or a "family restaurant" like Denny's, Johnathans or Royal Host if you're lucky enough to be near a 24 hour one.

Okay, to be fair, I'm definitely talking about big downtown areas exactly like Shinjuku or Shibuya. But I'm also talking about places like すき家 and 松屋 which are pretty good late night drunk eats and we never failed to find a late night pub with crazy hours no matter where we were.

Re: The realities of 'owning' a Japanese convenience store

#12

Post by patio11 »

baroffoos wrote: post #6

The problem seems so obvious. There is far more supply than demand. Why do people keep opening these stores when it is clear no one wants them?

It’s not clear no one wants them, since there is little data available to an ex-salaryman looking to open one in a particular neighborhood and if you do an unsophisticated “just watch a store all day” competitive analysis both a thriving store and a struggling store appear busy at all hours of day and night.

The franchisor is basically uniformly in favor of more locations since the franchisee bears most startup costs and the franchisor gets an effective call option on their cash flow.

(It’s also not clear to me that convenience stores are oversupplied relative to demand; there are probably some geographic mismatches but in e.g. this neighborhood in Tokyo you can find 3 in a Us city block and they’re self-evidently very viable. Which you might ask “How is that self-evident?” and I’m left to say “Trust me.”)

Re: The realities of 'owning' a Japanese convenience store

#13

Post by microcolonel »

vkou wrote: post #10
microcolonel wrote: post #4

Earlier quoted context omitted.

I think what they're getting at is that if you want to operate a 7-Eleven, you ought to be absolutely reliably open at the expected hours. The intended alternative is to shut down the store. This man made a terrible business decision and is now stuck between a sunk cost and probably not a lot of alternatives for work.

I have a feeling that 'expected hours' would suddenly and magically stop including 1am-6am, if the parent company were on the hook for the operating losses the franchises are suffering. But as long as they can make other people pay for their business decisions, that will, of course, not happen.

That would entirely defeat the purpose of franchising agreements.

The point is to diffuse risk, standardize the brand, and allow local owners to decide the things which don't affect the brand, in the service of their own interests (including whether or not to continue operating the location).

A franchise where the owner bears a small minority of the risk might as well just be centrally owned.

Re: The realities of 'owning' a Japanese convenience store

#14

Post by patio11 »

jorblumesea wrote: post #7

I don't understand the demand from the parent company to stay open late, given the lack of customers they clearly have and the oversupply of combini. I was at a 7-11 in Osaka by the dotonbori and it was basically vacant. Like many things in Japanese society it seems to be because "this is the way it's done".

You live in a country with franchises, right? What would you articulate as the brand promise of a McDonalds? McDonalds has a very clear internal understanding of that brand promise: it includes clean bathrooms, a smile, extremely low prices available, and very consistent food.

7/11 also has a brand promise. It includes, prominently, “If you need it, 7/11 is open.”

The LTV of a conbini regular is very, very, very high and the brand does not want you to sour on it for reasons specific to Store 6548 in May 2019.

Re: The realities of 'owning' a Japanese convenience store

#15

Post by Klonoar »

bane wrote: post #11
Klonoar wrote: post #5

Earlier quoted context omitted.

I mean, I lived there for 5 years of my life and go back often... the alternatives open at 2AM only really exist in the tourist areas or the uber dense areas (Shinjuku, etc). Past 2, you're pretty much only eating conbini food or a "family restaurant" like Denny's, Johnathans or Royal Host if you're lucky enough to be near a 24 hour one.

Okay, to be fair, I'm definitely talking about big downtown areas exactly like Shinjuku or Shibuya. But I'm also talking about places like すき家 and 松屋 which are pretty good late night drunk eats and we never failed to find a late night pub with crazy hours no matter where we were.

I understand if those places seem amenable to you, but I (and pretty much everyone I know who lived there long term) wouldn't set foot in one of those past their college years. They're horrible for your body. I'd sooner eat conbini food and pass out.

The late night pubs do exist, sure, but a lot of them stay open to capture any foot traffic from people missing their last train around midnight. Most don't serve full menus at that hour and it's usually a skeleton staff (short of, say, a HUB or something... but those aren't going to be open past 2, short of Roppongi & co generally).

Japan (really Tokyo, I guess) stopped being truly 24-hours post 2011 earthquake. After the power issues around the country, I noticed a lot of places never returned to their same livelihood. It's a shame, was fun while it lasted.

I'm mostly commenting at this point because the misconception of Japan being this constantly-on always-good-food crazy ass heaven is really tiring to see these days.

Re: The realities of 'owning' a Japanese convenience store

#16

Post by CydeWeys »

I was just in Japan two weeks ago, and convenience stores were omnipresent. I'll admit, it was incredibly convenient, as I never went for lack of food or water, and I got into habit of grabbing a beer and a snack every night to take back to my hotel room before bed. I was relying on them (and vending machines) pretty heavily for coffee and green tea throughout the day as well.

There were way too many convenience stores that were open in the middle of the night, though (and apparently this is a requirement on the franchisees). There was a 24/7 convenience store on the first floor of my hotel, and then another one down the block, and then several more within a two block radius. There's no reason they couldn't all coordinate better so that each individual store is only open through the night a couple times per week. That would make a lot more sense. Most customers would still be able to reach an open convenience store, even in the middle of the night, within a few blocks walk. It'd be nice if stores had posted the hours of nearby stores so you'd know where else to go if the one you wanted was closed, but that's probably unnecessary now in the age of apps (I had no problem finding opening times for places on Google Maps).

Re: The realities of 'owning' a Japanese convenience store

#17

Post by mgkimsal »

microcolonel wrote: post #13
vkou wrote: post #10

Earlier quoted context omitted.

I have a feeling that 'expected hours' would suddenly and magically stop including 1am-6am, if the parent company were on the hook for the operating losses the franchises are suffering. But as long as they can make other people pay for their business decisions, that will, of course, not happen.

That would entirely defeat the purpose of franchising agreements. The point is to diffuse risk, standardize the brand, and allow local owners to decide the things which don't affect the brand, in the service of their own interests (including whether or not to continue operating the location). A franchise where the owner bears a small minority of the risk might as well just be centrally owned.

and where the franchise parent bears basically no risk at all is a pretty crappy deal for franchisees, who basically take what seems to be most of the risk (described in the article) for... 30% of the gross profit? maybe?

eventually, 7-11 will be known as a place where you're likely to encounter sick children lying on chairs at 10pm because the franchisee's family is living in the store. eventually that might actually damage the brand enough that they'd remove some of the stipulations.

Re: The realities of 'owning' a Japanese convenience store

#18

Post by CydeWeys »

Klonoar wrote: post #15
bane wrote: post #11

Earlier quoted context omitted.

Okay, to be fair, I'm definitely talking about big downtown areas exactly like Shinjuku or Shibuya. But I'm also talking about places like すき家 and 松屋 which are pretty good late night drunk eats and we never failed to find a late night pub with crazy hours no matter where we were.

I understand if those places seem amenable to you, but I (and pretty much everyone I know who lived there long term) wouldn't set foot in one of those past their college years. They're horrible for your body. I'd sooner eat conbini food and pass out. The late night pubs do exist, sure, but a lot of them stay open to capture any foot traffic from people missing their last train around midnight. Most don't serve full m…

"Japan (really Tokyo, I guess) stopped being truly 24-hours post 2011 earthquake."

Really? This surprises me, given that the population of Tokyo has only continued to rise since then, and Tokyo wasn't nearly as badly affected as many other parts of Japan. How long did the power issues last following the earthquake, and why would they still continue to have effects so many years later?

Re: The realities of 'owning' a Japanese convenience store

#19

Post by CydeWeys »

patio11 wrote: post #14
jorblumesea wrote: post #7

I don't understand the demand from the parent company to stay open late, given the lack of customers they clearly have and the oversupply of combini. I was at a 7-11 in Osaka by the dotonbori and it was basically vacant. Like many things in Japanese society it seems to be because "this is the way it's done".

You live in a country with franchises, right? What would you articulate as the brand promise of a McDonalds? McDonalds has a very clear internal understanding of that brand promise: it includes clean bathrooms, a smile, extremely low prices available, and very consistent food. 7/11 also has a brand promise. It includes, prominently, “If you need it, 7/11 is open.” The LTV of a conbini regular is very, very, very high…

I wonder if this matters less in the age of smartphone apps. I tend to check opening hours on Google Maps first before heading to a place when it's outside of obvious business hours (like the middle of the night).

Re: The realities of 'owning' a Japanese convenience store

#20

Post by rangibaby »

CydeWeys wrote: post #18
Klonoar wrote: post #15

Earlier quoted context omitted.

I understand if those places seem amenable to you, but I (and pretty much everyone I know who lived there long term) wouldn't set foot in one of those past their college years. They're horrible for your body. I'd sooner eat conbini food and pass out. The late night pubs do exist, sure, but a lot of them stay open to capture any foot traffic from people missing their last train around midnight. Most don't serve full m…

"Japan (really Tokyo, I guess) stopped being truly 24-hours post 2011 earthquake." Really? This surprises me, given that the population of Tokyo has only continued to rise since then, and Tokyo wasn't nearly as badly affected as many other parts of Japan. How long did the power issues last following the earthquake, and why would they still continue to have effects so many years later?

The effects of the Lehman shock and 3/11 disaster hit the middle class hard, the blame is pointed at millennials for being thrifty (Why aren't young people buying luxury cars? Why do young people buy everything second hand?), but the reality is that middle class Japanese have less disposable income than 10,20, and especially 30 years ago
Post reply on HN