News On Japan

How Japan’s 7-Eleven Lost Its Edge

TOKYO, Mar 25 (News On Japan) - Once a pioneering force in Japan’s convenience store sector, 7-Eleven is now facing a clear slowdown. Although the company introduced many groundbreaking services over the years—such as hot oden by the register and in-store ATMs—it has failed to produce a major hit in over a decade.

Sales figures show the shift. While Lawson and FamilyMart saw average existing store sales increase by over 3% in 2024, 7-Eleven’s growth was just 0.1%, a sharp drop from 3.6% in 2023. From June to September 2024, the company recorded four consecutive months of year-on-year declines.

The slowdown has several causes. Consumers, facing inflation and rising prices, are increasingly price-conscious. Yet 7-Eleven continued pushing high-end products like gourmet meals and premium bento boxes, a strategy that seems to have backfired in the current climate. Its failure to deliver successful digital or point-reward services has further hurt its ability to retain younger shoppers. In contrast, rivals like Lawson and FamilyMart have leveraged popular programs like Ponta and Rakuten Points to maintain loyalty.

Another major blow came from the so-called “false-bottom bento” controversy, which went viral on social media. Many users accused 7-Eleven of using deceptive packaging to make bento portions appear larger than they actually were. President Nagamatsu’s dismissive response—saying “we can’t do such a thing” and asking people to post only verified facts—only fueled the backlash, with critics saying he seemed out of touch with customer sentiment.

The company has since started rolling out more reasonably priced items, labeled with messages like “Great Value!” in an apparent attempt to course-correct. This shift away from the high-end “Seven Premium” brand suggests a broader rethinking of strategy.

The challenges come amid deeper structural changes. Parent company Seven & i Holdings recently decided to spin off Ito-Yokado, signaling the breakup of a major retail conglomerate. With its future now largely riding on the success of its convenience store arm in Japan and the U.S., the pressure is mounting.

To complicate matters further, Canada-based convenience store operator Alimentation Couche-Tard has renewed its push to acquire Seven & i Holdings. While talks have stalled, Couche-Tard has made clear it has no plans to withdraw its bid.

With innovation stagnant, customer loyalty slipping, and strategic missteps compounding, 7-Eleven finds itself in unfamiliar territory—no longer the undisputed leader, but a brand at a crossroads.

Source: Kyodo

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