Lawson quits home delivery as costs rise in Japan

Jun 28, 2018 | News On Japan

Jun 28, 2018 (Nikkei) - Japan's Lawson will do away with the delivery of fresh food to online shoppers at the end of August, as rising costs and slow demand have rendered the service unsustainable.

The members-only home-delivery service, launched in 2013, carries some 8,000 items, including vegetables, meat and processed food. But membership topped at no more than 60,000 over the past year.

Shipping was free with a 5,000 yen ($45) purchase in greater Tokyo. But the delivery service did not make economic sense, given surging shipping rates charged by such partner carriers as Yamato Transport and Japan Post.

Lawson instead will continue to offer store pickups of fresh food, available as soon as the late afternoon of the day of ordering. The service, now offered at a little more than 200 locations in Tokyo and Kanagawa Prefecture, will expand to some 2,000 stores in the greater metropolitan area this fiscal year.

Store pickups will be promoted as a strategic tool drawing customers to brick-and-mortar locations. While online orders for home deliveries were recorded on Lawson's books, sales from store pickups will be credited to franchisees.

Peers have made similar moves. For instance, FamilyMart, a unit of FamilyMart UNY Holdings, shut down its online shopping website at the end of February.

One exception is Seven-Eleven Japan, which last October began delivering products available at stores to smartphone users' homes. The service will be introduced at all locations in the northernmost island of Hokkaido by August 2019 and other parts of the country thereafter.

The unit of Seven & i Holdings teamed with logistics concern Seino Holdings last year, with the latter forming a wholly owned subsidiary handling shipping for the convenience store heavyweight. The goal is to insulate the Seven-Eleven service from the rise in shipping costs.

Rising logistics rates are also prompting other retailers to review shipping policies. Supermarket chain Ito Yokado, also a member of the Seven & I Holdings group, will start charging Friday an additional delivery fee for customers buying cases of select beverages. Supermarket operator Aeon and affordable furniture giant Nitori Holdings have raised rates for certain products and regions.

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