Growing challenges have compelled major convenience store chains to rethink their strategies, shifting from expanding their number of stores to enhancing profit per store. A fiscal 2022 Nikkei Newspaper survey offered insights into how three leading chains have addressed obstacles that curbed their enthusiasm for increasing sales by inaugurating new outlets. Faced with those hurdles in their expansion strategies, the three chains, Seven-Eleven Japan, Lawson, and FamilyMart, pivoted to emphasize maximizing profit at each existing store.

Branching-out strategies adopted by the three leading convenience store chains have not been as effective as anticipated. A survey by the Nikkei Newspaper highlights that the cumulative number of new stores across those chains plummeted to its lowest since 2007. From its zenith in 2013, which saw 3,723 store openings, there was a staggering 70% decline in new store launches in fiscal 2022. Specifically, in fiscal 2022, those chains collectively opened only 1,040 new outlets, marking a 21% year-on-year decrease. Seven-Eleven faced a 6% year-on-year decline, adding 625 new stores. Lawson experienced a sharp 53% year-on-year drop, opening only 228 new outlets. FamilyMart bucked the trend with a 10% year-on-year growth, also introducing 228 new stores.

Behind the setbacks faced in the expansion strategies is the surge in land values. The increase in appreciation has escalated property rental prices for new outlets, particularly in metropolitan regions. Opening new stores in such high-rent areas is becoming financially challenging, given the strain those rents place on profits. Based on data from At Home, a prominent real estate analytics firm, the rent for spaces up to 165 square meters in Tokyo's coveted districts has grown by 1.7% year-on-year. This translates to a monthly rent of twenty-five thousand six hundred thirty-five yen for every 3.3 square meters on the ground floor. Similarly, prime locations in Nagoya and Osaka have witnessed comparable upticks in rental prices.

Aside from the escalating property rental fees, the three major convenience store chains have been confronting additional dampers on their ambition to expand their outlets. The potential for growth in the number of new convenience stores is dwindling as market saturation nears its zenith. The national tally for those stores is approaching a staggering 60,000. Moreover, competition from drug store chains is intensifying, further narrowing the scope for market penetration for convenience store chains.

Despite facing challenges, the three chains have successfully maintained their overall business health, as highlighted by the Nikkei Newspaper survey. The survey revealed a 4% year-on-year growth in sales, collectively reaching a sum of 11.433 trillion yen for the trio. The growth figure was achieved without intricate adjustments for different accounting standards. In fiscal 2022, each chain zeroed in on enhancing per-store sales. Seven-Eleven, for instance, tapped into regional tastes by offering high-priced products or services tailored to different needs in specific areas, leading to an impressive 3.7% year-on-year rise in per-store sales, averaging 67 thousand yen per day. Meanwhile, FamilyMart propelled its per-store sales by expanding a range of distinctive products under its brand label. Those exclusive offerings, unavailable from competing brands, were priced strategically according to market dynamics, ensuring maximized profit margins.