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Business

Japanese service model buckling amid labor shortage

Big names adding fees, shortening hours and offering higher pay

TOKYO -- Under pressure from a dearth of personnel, a number of companies in Japan's service sector are rethinking their famously customer-focused way of doing business.

Yamato Holdings unit Yamato Transport, the biggest domestic home delivery provider, has made news with its decision to stop handling same-day deliveries for Amazon.com.

Supermarket operator Seiyu on Tuesday began effectively charging to redeliver orders made via its online platform, levying a 400 yen ($3.61) fee on customers who are not around for initial delivery.

Fellow retailer Aeon is leaning in this general direction. "If a service cannot be maintained in its existing form, it should either be terminated or face a price hike," President Motoya Okada has said, arguing that excessive services will lead to the downfall of the company that provides them. He has stressed the need to match the value and level of services to demand.

Shortening hours is another coping mechanism. Shopping center operator Lumine is closing 12 locations -- or roughly 80% -- 30 minutes earlier starting this month. This change is aimed at easing the burden on employees at understaffed tenant stores. This is said to mark Lumine's first time altering hours to this extent.

Seven & i Holdings restaurant chain unit Denny's is rolling out self-service bars that dispense about 50 types of beverages. Hotel Okura Tokyo is using machines instead of human clerks for currency exchange.

Japan's nonmanufacturing sector has relatively low productivity in comparison with other advanced economies. This is partly because Japanese businesses go out of their way for customers but do not charge fees to match, many experts say.

The graying of the population is depleting the labor pool, and companies are being forced to offer higher wages to secure workers. Job placement provider en-Japan reports that for temps in the sales and service sectors, average hourly starting pay levels increased on the year for 18 months straight to February.

(Nikkei)

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