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Falling Workforce Hits Convenience Stores

Lawson 1By Nobuaki Masaki

SNA (Tokyo) — The declining workforce is already having an economic and social impact across Japan, and one industry which is already facing major changes is that of convenience stores, which depend on the existence of a pool of cheap labor in order to thrive. The largest chains such as Seven & i Holdings, Lawson, and FamilyMart are on the front lines.

The demographic challenge is indeed steep. According to official figures, Japan’s population decreased by one million people between 2010 and 2015. Furthermore, the latest statistics reveal that the working age population (people between ages 15 to 64) have decreased to only 61% of the entire population.

In October 2015, Prime Minister Shinzo Abe responded to the demographic crisis by setting a goal of maintaining a population of 100 million for the next fifty years, also promising to create “a society where all of the 100 million citizens can play an active role.” A special government minister has even been appointed for this very purpose.

Nevertheless, President Genichi Tamatsuka of Lawson Inc., Japan’s second-largest convenience store chain, believes that his company can do well under the changing demographics. The market share of convenience store chains within the retail sector continues to rise, in many cases overtaking department stores and general merchandising stores.

Tamatsuka asserts that his business has potential “if we can continuously adjust to the market changes and opportunities.”

When talking about the declining workforce in a February press conference, Tamatsuka stressed the need to secure existing workers; recruit into the workforce other categories of workers such as the elderly, housewives, and foreigners; and to improve productivity at the stores.

Despite Tamatsuka’s emphasis on the inclusion of foreign workers into the workforce, Lawson apparently does not keep track of the increase in the number or proportion of foreign staff in their stores. Lawson spokesperson Li Ming told the SNA, “We do not collect information on this, so we cannot compare the previous number of foreign workers to the number today.”

A spokesperson for FamilyMart, Japan’s third-largest convenience store chain, was similarly not forthcoming about the number of foreign workers, saying, “We have not disclosed data on the number or percentage of our foreign staff.” He then added, “Of course, if you have the feeling that foreign staff are increasing in our stores, then I think this is true.”

On the topic of improving productivity, Tamatsuka believes that the use of robotics to supplant the decreasing workforce is “an unavoidable situation.” This change is already underway. Tamatsuka states, “We are implementing a semi-automated ordering system.”

FamilyMart is also implementing a similar ordering system, and is, in addition, implementing new POS (point of sale) systems. FamiPort, a multimedia terminal in FamilyMart stores, allows customers to buy tickets such for concerts and other services without the presence of staff.

In the absence of effective policy changes at the national level, this trend toward automation within the convenience store sector is expected to continue.

Nobuaki Masaki is a contributing writer to the Shingetsu News Agency.

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