business

Inside the rogue 7-Eleven, a convenience store completely cut off by its company

38 Comments
By SoraNews24

Walking into the Higashiosaka Minami-Kamikosaka branch of the massive convenience store chain 7-Eleven, I couldn’t help but feel a little nostalgic to the mom-and-pop shops of my home country. Those kinds of corner stores aren’t as common in urban Japan. Here, the convenience store industry is largely occupied by major chains that barely have enough room to grow themselves, let alone give independent stores enough space to survive.

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The shelves were sparsely stocked and the staff wore civilian clothes while working a portable cash register. This was a far cry from the pristine but demanding conditions of a regular Japanese conbini chain where even a few gaps on a shelf or slight appearance of casualness among staff is frowned upon.

Also, this was because the Higashiosaka Minami-Kamikosaka 7-Eleven was technically not a 7-Eleven any more.

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This particular store has been the focus of nationwide news for over a year now, after its owner Mitoshi Matsumoto took it upon himself to not be open 24-hours a day due to a lack of staff. This angered the head office who threatened to terminate their franchise agreement, thus sparking a debate over the working conditions of convenience stores in general.

The dispute continued in various forms until Dec 31, 2019, when the franchise agreement between Matsumoto and 7-Eleven was ended by the company, saying they received too many complaints from customers. The cancellation was challenged by Matsumoto, and the case is currently in the courts.

The closure was widely covered by media, showing the owner marking down all of his goods for a clearance sale. At that time, it was reported that he would continue to run the store in 2020, but as an independent business rather than a 7-Eleven franchise.

However, when the store reopened on Jan 3, many were surprised to find that the 7-Eleven signs were still up and Matsumoto, along with his two remaining staff members were still wearing uniforms.

“I still think this is 7-Eleven,” he told media, adding that while the contract is still in dispute it cannot be cancelled.

This created an odd situation. The store was technically open, but completely cut off from the 7-Eleven system. The ATM was shutdown, no fresh food was delivered, and the cash register stopped working. The people, however, continued to sell. The store had gone rogue.

I decided to visit the unique convenience store myself to find out what was going on. Outside was a poster declaring that a sale was being held to clear out all the stock before the store closes down due to litigation and announcing the new business hours of 9 a.m. to 5 p.m.

▼ The sign appeared hastily written and lacking any of the formalities almost always found on a storefront notice.

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Large swaths of the shelves were bare, but an ample supply of snacks and drinks were still being sold, and fried food like corn dogs and chicken were still available. A small-but-steady stream of customers were coming in and out as well and filling up baskets with the discounted goods.

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I was able to have a few words with Matsumoto himself, and I asked the obvious: “What’s going on?” 

“Basically, we’re just selling off the stock until the dispute is settled,” he told me. “After that, if the court decides I’m wrong, I’ll hand over the store and walk away. If I’m right… I’m not sure what I’ll do next.”

I asked what Matsumoto wanted to do from now on, but he wasn’t sure. “I’m just focused on what’s happening now. I’ll have to think about that later.”

As of our conversation, there had been no contact between 7-Eleven and Matsumoto, so it’s unclear what the company’s intentions are. Perhaps they will remain silent so as not to draw any more media attention and just let him sell off the rest of his goods without incident. On the other hand, they may just be slowed down by the holiday season and will swoop in to shut him down completely within the next few days.

It’s a lot of uncertainty, but he and his small crew are just conducting business as usual until they can’t any longer. Finally, I asked Matsumoto what he thought the future of convenience stores in Japan was. 

“There isn’t any. The system is broken because the companies are taking too much from the people running the stores, and there isn’t enough left to run them properly. This is the way things are getting nowadays: people in the highest levels are just interested in getting as much for themselves as they can. You see it everywhere, like Donald Trump in America, these people at the top are only looking out for themselves. It’s the same in Japan and elsewhere too, but it can’t continue like this.”

For his defiance, Matsumoto has sometimes been depicted as a belligerent crank in the media, someone not willing to cooperate and just looking to cause trouble. Granted I only talked with him briefly, but I didn’t get that sense at all. He certainly seemed like a hardheaded and proud man, as you might expect someone in this situation to be, but he was hardly irrational. 

And he’s certainly right that the convenience store industry is at a tipping point now. Labor shortages are being made up with an increasing number of short-term foreign workers and possibly completely automated systems in the future. So Matsumoto is absolutely right that things cannot continue the way they are, but much like the future of this canary of a 7-Eleven in the coal mine of Japan, how they will end up is very much in the air.

Read more stories from SoraNews24.

-- Saitama man robs 7-Eleven with knives, steals 3 onigiri

-- Heroic Japanese convenience store owner saves foreigner from online scam artist

-- 7-Eleven really does sell everything in Japan, even Attack on Titan 3-D maneuver gear

© SoraNews24

©2020 GPlusMedia Inc.

38 Comments
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Opening 24 hours a day to sell coffee and snacks is not necessary- good luck to Mr Matsumoto...

1 ( +1 / -0 )

How much does it cost to franchise a 7-Eleven store?

Some Franchisees aren’t always aware of the additional financing costs related to purchasing a franchise. The initial investment includes a one-time initial franchise fee based on the store’s gross profit (the range of this fee is from $100,000 to $1,000,000 — however, the actual fees depend on the store you select, a down payment on the store’s inventory, supplies, business licenses, permits, bonds, and initial cash register funds.

I believe the costs are similar in Japan.

0 ( +0 / -0 )

Any chance of some follow-up information about the franchise agreement? In the United States (well, in the previous century) the best 7-Eleven franchise contracts had a 50/50 split from the bottom line before taxes. I get the feeling that in Japan the split has to be much more egregious to the franchisee with corporate sucking up the majority of revenue with requirements for "branded merchandise".

0 ( +0 / -0 )

I hate this bullying aspect of Japan.

This country likes to present a benevolent and friendly face to the world.

Behind that is a really nasty and vindictive tendency.

It's horrible and scary.

1 ( +1 / -0 )

Stupid anti-Trump remark shows the result of the non-stop propaganda that JT is just the english-speaking tip of the iceberg obviously. Trump was elected by little people to fight the elites. Pelosi, Schumer, Clinton, Obama--there are the people skimming at the top. And they all hate Trump. Wake up, Japan, and start pushing back against the propaganda.

-1 ( +1 / -2 )

I always shop there.

0 ( +0 / -0 )

The customers have been complaining that the shop is not open 24 hours.

Not the reason for the complaints, but you wouldn't know it from SoraNews24's reporting.

For a more informative article on Matsumoto the man and former franchisee, see here: https://headlines.yahoo.co.jp/hl?a=20200102-00010620-bengocom-soci

1 ( +1 / -0 )

@AKD99

 but so far all I can see that he has DONE about it is trillion dollar corporate tax cuts.

Then you're seriously myopic. Trump personally pushed the post office to double the exploitative rates demanded by Amazon, Apple agreed to make its Pro desktop in the US right after Trump made a stink about it, and carmakers have stepped up pledges to move more production out of Mexico to the US, among other moves done in the interest of US working people. The globalists who previously occupied the White House didn't mind corporation exploitation one bit.

The resentment of the Japanese 7-11 guy is what I fight scary, in terms of knee-jerk xenophobia and ignorance.

2 ( +2 / -0 )

I like 7-11, but damn, that is too strict. How about some flexibility???

3 ( +3 / -0 )

Massive respect to my man, Matsumoto.

Sticking it to the man. Revolutions have to start somewhere and they don't always have to be chaotic.

6 ( +6 / -0 )

timeon

somewhere lost in the news flurry is the fact that the fight with the company started after numerous customer complaints about the guy. Then he started his crusade from a different angle.

You have it backwards. He wanted to close during overnight hours when business was slow or non-existent. 7-11 corporate said he must stay open. When he didn't comply, they suddenly came up with the complaint issue.

I'm sure other locations also have complaints, but don't have their franchises revoked. It's obviously a bullying tactic to keep franchisees in line through fear and intimidation. (Bullying in Japan??? I'm shocked!!!)

6 ( +6 / -0 )

The customers have been complaining that the shop is not open 24 hours. He cannot find staff to work all night... Perhaps he cannot find overnight staff because he doesn't want to hire foreigners. I'm curious to find out if that is the case. My local combini is staffed by Japanese by day, and Korean and Eastern European students overnight.

2 ( +4 / -2 )

I have been saying for years the rich & powerful are killing the Golden Goose, the middle classes, greed has been off the charts the last 30+ years!

profits need to be more evenly spread out the top 10% own an incredibly obscene amount of wealth worldwide, as this 7-11 owner correctly states this is unsustainable!

5 ( +5 / -0 )

Good luck to him. I doubt being a 7-11 gets him cheap drinks, which are a large portion of convenience store sales. He'll know the factory where the onigiri and bento are made for that area, so he could just order something similar from them. It will not be a 7-11 factory.

If you are not kicking up commissions to the franchise, there are things that could be done better than 7-11. If you have about 5000 USD, you can buy the one-push coffee machines actual Starbucks branches use. Starbucks coffee isn't perfect, but its way better than convenience store coffee. Sell it at convenience store prices and you'll get lots of extra customers coming in and also buying chocolate, snacks etc.

-1 ( +1 / -2 )

@JeffLee - Trump waffles a lot about predatory capitalism, but so far all I can see that he has DONE about it is trillion dollar corporate tax cuts. He's basically a harsh critic of anyone who doesn't kiss his a$#, nothing to do with economics, of which he plainly has no real understanding.

Trump put his foot down and told manufacturers that he would slap a 35% tariff on their goods if they moved a factory out of the country. As a result, he bought thousands of jobs back to Detroit. He doesn't just talk the talk.

Getting back on topic, I do see a future for convenience stores but it's in automation. Convenience stores will be almost entirely automated with no more than a single staff member on duty monitor things and stock shelves. Shevle stocking can even be done by delivery staff so really just a person to monitor things.

0 ( +3 / -3 )

wtfjapan

The 1980's just called, and they want their stereotype back when you're done with it.

2 ( +3 / -1 )

Boycott 7-11 in support of the rare individual willing to stand on his principles.

https://www.nytimes.com/2020/01/06/business/7-eleven-japan.html?action=click&module=Top%20Stories&pgtype=Homepage

1 ( +1 / -0 )

This is the true Japanese spirit for me. As an outsider looking in, I've always had the impression that the Japanese stood their ground for what was right and what was just even if it meant being in an unfavorable spot.

youve got it wrong, they stand their ground when they perceive what is right and just, doesn't matter what world opinion or logic states , many of Japanese laws have stood for decades even over 100yr as Japanese society changes the laws havent kept pace so since its J law they automatically perceive it and right and just.

3 ( +4 / -1 )

It would be interesting if nearby sympathetic franchise owners sold him their stock at cost and he marked it up to standard price.

that would be great in practice but price fixing in Japan is rampant and companies like 7/11 Lawson etc force their members to sell at full retail, they aren't allowed to discount unless the use by date is near.

I see it in the auto sector all the time everybody is about 10% discount and nobody will go lower doesn't matter how much you buy. while its technically illegal to force business to fix their price or collude with each other, it is rampant and the secret gentleman's agreement is all coincidence and not purposeful.

3 ( +3 / -0 )

Japan needs a Bernie Sanders type politician who isn't afraid to tell it how it is and speak up for the working class, immigrants, minorities, and everything else most politicians in Japan are afraid to speak about

There are plenty like the Communists but they don't beat the ethnonationalist drum the same way so they can't get into government

8 ( +8 / -0 )

This is the true Japanese spirit for me. As an outsider looking in, I've always had the impression that the Japanese stood their ground for what was right and what was just even if it meant being in an unfavorable spot. But upon reading current events in Japan in the past years, I feel that is now a thing of the past in favor of not being a nuisance to others. But I'm glad that some still have that spirit. Much respect to this guy, a system that no longer serves the people has no place in society

4 ( +4 / -0 )

@JeffLee - Trump waffles a lot about predatory capitalism, but so far all I can see that he has DONE about it is trillion dollar corporate tax cuts. He's basically a harsh critic of anyone who doesn't kiss his a$#, nothing to do with economics, of which he plainly has no real understanding.

You are of course correct that this particular issue isn't Trump's fault, but Matsumoto didn't blame him, he simply made a high-profile comparison. Re-read what he actually said - is he blaming Trump?

"This is the way things are getting nowadays: people in the highest levels are just interested in getting as much for themselves as they can. You see it everywhere, like Donald Trump in America, these people at the top are only looking out for themselves. It’s the same in Japan and elsewhere too, but it can’t continue like this."

2 ( +5 / -3 )

The staff at the local convenience store (a different chain) are very friendly, so I make a point of going there for the smiles and the small talk at the counter. Some turnover of staff there too, but the good ones seem to be able to hang in there.

I thought that HQ's single big problem with Mr Matsumoto was his refusing to stay open 24 hours because of the staff problem. (?)

4 ( +4 / -0 )

like Donald Trump in America, these people at the top are only looking out for themselves.

Yeah, it's Trump's fault. Trump is actually a harsh critic of Amazon, Apple, carmakers and many of the other corporate titans over the issue of their greed and exploitation, like no other US president before.

I'd have respect for this guy if he knew what he was talking about instead of casting about for foreigner scapegoats.

0 ( +6 / -6 )

How dare this guy sell stuff at 30% off! How dare he!

2 ( +2 / -0 )

somewhere lost in the news flurry is the fact that the fight with the company started after numerous customer complaints about the guy. Then he started his crusade from a different angle. If he doesn't like the 7-11 rules, he can have his own "Matsumoto store", with whatever rules he pleases. And IF he is successful and expands like 7-11 did, then he can allow whatever rules he wants to the franchises.

-1 ( +2 / -3 )

Poor guy. I hope he can make some money selling off all this extra stock.

5 ( +5 / -0 )

What his he going to do when all the stuff is sold off and the case is still in the courts? 7-11 won't deliver to him and I assume that he's not allowed to sell unapproved products according to the contract details, will him and his staff just stand around an empty storefront until the decision is made?

1 ( +3 / -2 )

It would be interesting if nearby sympathetic franchise owners sold him their stock at cost and he marked it up to standard price.

9 ( +10 / -1 )

That's a pretty accurate assessment of many companies in many countries.

6 ( +7 / -1 )

You can't wish a problem to go away, how about helping the guy rather than threatening him?

14 ( +15 / -1 )

And he’s certainly right that the convenience store industry is at a tipping point now. Labor shortages are being made up with an increasing number of short-term foreign workers and possibly completely automated systems in the future. So Matsumoto is absolutely right that things cannot continue the way they are, but much like the future of this canary of a 7-Eleven in the coal mine of Japan, how they will end up is very much in the air.

agree 100% with this statement but it in no way, shape or form is limited to the convenience store industry. So many industries in Japan are in the same fix.

8 ( +9 / -1 )

The system is broken because the companies are taking too much from the people running the stores, and there isn’t enough left to run them properly. This is the way things are getting nowadays: people in the highest levels are just interested in getting as much for themselves as they can. You see it everywhere, like Donald Trump in America, these people at the top are only looking out for themselves. It’s the same in Japan and elsewhere too, but it can’t continue like this.”

How can you argue with this??

11 ( +12 / -1 )

“I still think this is 7-Eleven,” he told media, adding that while the contract is still in dispute it cannot be cancelled.

His lawyers have advised him correctly. If he stops acting like a 7-Eleven, then the 7-Eleven HQ can claim he accepted the contract is terminated. Therefore it is important he continue to operate as a 7-Eleven best he can to show he has not accepted the request for termination.

I hope many people in the area will support him too as he fights the bullying from Goliath. Japanese culture is supposed to be tolerant to maintaining "harmony" in relationships including business, but in really it does not happen because power harassment is considered acceptable in business environments at least.

11 ( +12 / -1 )

He is right. In every developed nation the "haves" want more for less and the "have nots" work harder to take home less than they used to. If the gap between rich and poor does not get smaller soon, and continues to increase it can only end up one way.

Thomas Jefferson once said "I hold it that a little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical".

16 ( +16 / -0 )

I had no real love for 7-11, now I really don’t. Kudos to all who give corporate the middle fingered salute. If I lived closer, I’d come and support you. 頑張ってね!

20 ( +20 / -0 )

More power to him! I dont care if he is cranky or not, he is standing up for what he believes in!

Not something seen to often here!

29 ( +29 / -0 )

If he can’t find enough staff, how about just opening between 7 and 11?

18 ( +19 / -1 )

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