TOKYO -- Convenience stores have saturated their markets across much of Japan, but those in northern regions are facing particularly harsh competition due to a rapidly declining population.
Japan boasts roughly 57,000 convenience stores, a glut resulting from a yearslong campaign by national chains to gain scale through a plethora of shop openings. This expansion was easiest to achieve in Japan's north because of relatively cheaper real estate.
One Lawson store at the northern tip of Hokkaido has a potential customer base of around 3,000 people, down 15% from a decade ago. The store could once rely on demand for daily sundries from local citizens, but lately it stays afloat thanks to travelers along the nearby highway.
"We're open 24 hours, but only one or two people come every hour at night during winter," said the owner, who has managed the Lawson for over 20 years. "There is honestly not much point staying open [during those hours]."
The store competes with a Seicomart just a few hundred meters away. The rival convenience store, part of a major Hokkaido chain, recently cut its operating hours.
A normal outlet in Japan has about 3,000 people within its operating area, data from the land ministry shows.
But a Nikkei study found that the average number of residents in a store's service area falls below 3,000 in roughly 80% of the country's 1,900 local governing areas. The figure dips below 2,000 people in more than 400 places.
This growing squeeze for convenience stores is most pronounced in northern regions such as Hokkaido, Fukushima and Miyagi prefectures -- areas with rapidly shrinking and graying populations. Yet these minimarts often serve daily needs in a way no other store in the vicinity can.
Otoineppu, a village in Hokkaido, has a population of only 700. A convenience store in the heart of the community offers precooked meals and allows residents to pay utility bills. But daily traffic reportedly barely tops 200 people, while an urban outlet would achieve that number in one or two hours.
The saturation of convenience stores is not limited to Japan's depopulated regions. Data shows that 31,000 outlets nationwide are within a five-minute walk from another such store.
This density of outlets is more prevalent in eastern Japan than the west. Convenience stores with fewer than 2,000 people in their immediate vicinity are the average in about 340 of eastern Japan's local governing authorities, compared with only around 80 in western Japan. Most such shops in the west are found in central Osaka or Kyoto.
"We could easily open stores in northeast Japan and in the northern Kanto area [near Tokyo] because we can use our group's logistics network in those places," said a former member of Seven-Eleven Japan's store development team.
Land costs are cheaper compared with western Japan as well, the source added. Seven-Eleven parent Seven & i Holdings operates over 21,000 convenience stores in Japan, as of August.
Restaurants and general stores in the Kanto region typically are corporate-owned outlets, government statistics show. But in the Kansai region surrounding Osaka, mom-and-pop shops dominate. The strong local flavor of retail ownership appears to contribute to the comparatively low penetration of convenience store chains in western Japan.
Nikkei conducted its study by obtaining the addresses of outlets from the websites of seven major convenience store chains, with data current as of October. The number of locations for each city, town and village were compared with local population estimates from January to determine the saturation level.
Additional reporting by Kohei Fujimura and Kazuhiro Kida in Tokyo.