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Convenience chains scramble to follow Seven-Eleven overseas

With growth slowing domestically, Seven-Eleven Japan Co. is stepping up its overseas expansion with other convenience store chains following, taking trademark Japanese customer service to the rest of the world.

Toshifumi Suzuki, chairman and CEO of Seven-Eleven Japan, expressed confidence in expanding its overseas business built on “Japanese style services.”

“Anywhere in the world, customers are happy about polite and affable service,” Suzuki said. “We will raise the level by retraining staff in China, South Korea, Thailand and all the rest.”

The company operates more than 33,000 7-Eleven outlets outside Japan, leaving its rivals far behind. That push started in 1991 when the company bought a firm that had operated 7-Eleven stores in the United States, where outlets bearing the name started.

But in many cases, the Japanese company leaves the management of those overseas stores to local operators. Sales at many of such stores are less than half those at an average outlet in Japan.

The company, the runaway leader in earning capacity among Japanese chains, is attracting a high level of interest overseas, Suzuki said.

With its know-how in servicing of store staff, merchandising development and other areas, his company aims to increase group sales, Suzuki said.

In Japan, 15 groups, with 100 or more member stores for each, had a total of 50,371 convenience stores at the end of November, according to the Convenience Store News Flash, an industry journal published by Ryutsu Sangyo Shimbunsha Co.

Although major chains are still active in opening stores in Japan, some observers warn of excessive competition, with large sales gaps conspicuous between stores.

Amid the competitive domestic market, operators other than Seven-Eleven Japan are also increasing the numbers of their stores overseas.

Lawson Inc., which has lagged behind Seven-Eleven in an overseas presence, is opening outlets in China and Hawaii.

Takeshi Niinami, president and CEO of Lawson, said in an interview with The Asahi Shimbun on Dec. 26 that even after the protests in China over the Senkaku Islands dispute, the company will maintain its plan worked out in 2010 of opening 10,000 outlets in the country by 2020. It now has 374 stores in the country.

“We will increase the number of stores by purchasing establishments, but the progress could be slow,” Niinami said. “That’s because although many convenience stores run by state-run companies are drowning in red ink and apparently need help, privatization could be delayed, considering the lineup of the new party leadership.

“It seems to also take a long time until a large middle class is formed,” he continued. “But things will change in five years or so.”

Niinami also said Lawson annually will open 50 to 200 stores each in the cities of Beijing, Shanghai, Dalian and Chongqing over the next three to four years. He said the company will create stores that serve as examples for the future.

The company is putting efforts into nurturing personnel who will play a key role in overseas operations.

In Sapporo, Cui Xiangshu, a 28-year-old from Shenyang, China, is working as a supervisor to oversee 12 Lawson stores in the city in northern Japan. Cui--who graduated from college in Fukuoka, southwestern Japan, and joined the company in 2009--is Lawson’s first foreign national to assume the post.

She is responsible for conveying policies from company headquarters to the stores and consulting with store owners on management issues.

“Building up my experience, I hope to play a part in the 10,000-store plan in China,” she said.

FamilyMart Co., another major domestic chain, had 21,750 stores, including 12,549 overseas, as of the end of November. The company had aimed to increase the total to 25,000 by the end of February 2016. But with stepped-up efforts in opening stores in Southeast Asia, the company said it could reach the goal two years earlier.

(This article was written by Ryo Shimura and Masanobu Furuya.)