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Interview

Lawson ready to serve Japan's fully wired households: CEO

Wuhan experience shows stay-at-home trend will last, convenience store chief says

Sales at Japanese Lawson locations in residential areas have picked up as people buy more ingredients for homemade meals. (Photo by Keiichiro Sato)

TOKYO -- China's coronavirus shutdown has left a lasting mark on consumer shopping habits, and Japan is likely to see a similar trend, CEO Sadanobu Takemasu of Japan-based convenience store operator Lawson told Nikkei in a recent interview.

Takemasu says staying home has become "ingrained" in people in Wuhan, which has begun reopening after a long lockdown.

Predicting that Japanese consumers too will remain cautious about eating out for a long time, he says convenience stores need to respond to changing customer needs, especially as the nation's 100 million customers go fully online via teleworking and teleschooling.

Lawson had 14,444 stores in Japan and 2,646 in China, including 401 in Wuhan, as of February 2020.

Excerpts from the interview follow.

Q: How has the market changed in Wuhan?

A: The lockdown was lifted on April 8, but people still cannot move around as freely as they used to. After two and a half months under lockdown, staying home has become ingrained. Lawson has about 400 locations in Wuhan, but sales are down about 20% from pre-coronavirus levels, and it will probably take time for them to recover.

People don't feel free to go out and buy drinks whenever they feel like it. Restaurants have reopened, but most people get takeout rather than sit down and eat.

Q: What about in Shanghai, where you have about 1,500 stores?

A: The restrictions were looser than in Wuhan but far stricter than in Japan. There was little choice but to stay at home. [The restrictions] have been eased now, and consumption and the economy have started moving again.

Lawson is back to 24-hour operation after being on shortened hours. People are gradually starting to feel at ease again, and sales have recovered to a 10% decline, but people are still tentative.

Lawson CEO Sadanobu Takemasu does not see life in Japan returning to normal right away after the coronavirus outbreak subsides.

Q: Will your experience in China be helpful in predicting consumption trends or government support measures in Japan?

A: I think so. We don't know when the coronavirus will subside, but I expect at-home consumption to become a habit in Japan as well. Life probably won't return to normal right away, especially in the first half.

[As for state support,] I can't say for certain, since the countries' systems differ, but the support measures in China were speedy and detailed. In addition to measures to protect jobs, there were subsidies for masks and other protective equipment, and state-owned companies provided breaks on rent and utility bills. Convenience stores were positioned as a lifeline for the public.

Q: How are things in Japan now?

A: The coronavirus is rapidly changing the lineup of products that people want at convenience stores. You have to make three meals a day when you're stuck at home, and so there's higher demand for cabbage and other produce, fresh meat, milk, and bread. Sweets and products with bright packaging are also selling well as people try to make their lives at home a little more enjoyable.

Sales at some stores in residential areas are up 10% to 20%. But conditions are extremely tough in business districts -- we've seen locations with sales down 90%.

Q: Are there aspects of the coronavirus crisis that we should use to our advantage?

A: With telecommuting and online classes, Japan is becoming a country of 100 million digital consumers. Digital technology should be used to make our society easier to live in.

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