Japanese Convenience Stores Decline for 23 Consecutive Months
Population Aging... Chronic Labor Shortage
Korea Adds 1,000 Stores Annually
The number of convenience store outlets in South Korea appears to have caught up with Japan, the 'convenience store powerhouse.' While the number of stores in Japan has been gradually decreasing since 2021, South Korea's convenience stores have been adding more than 1,000 new outlets annually, resulting in the number of convenience stores surpassing Japan for the first time.
According to the 'May Convenience Store Statistics Monthly Report' recently released by the Japan Franchise Association on the 1st, the number of convenience store outlets in Japan last month was 55,641. This is 72 fewer than the end of last year (55,713). The Japan Franchise Association surveys and publishes data every month on the number of convenience store outlets nationwide, sales, visitor numbers, average purchase cost per customer, and sales growth rates by item category.
According to the Korea Convenience Store Association, as of the end of last year, the number of convenience store outlets in South Korea (CU, GS25, 7-Eleven, Emart24, C Space24) was 55,580. This is 61 fewer than the number of convenience stores in Japan as of the end of last month. Considering that the number of outlets of the three major domestic convenience store brands has increased by at least 100 since the beginning of this year until last month, it is estimated that the current number of convenience stores in South Korea has surpassed Japan.
The domestic convenience store industry discloses the number of outlets once a year at the end of the year to prevent excessive competition in store openings. A convenience store official said, "It is difficult to disclose exact numbers, but just one convenience store brand has opened more than 100 outlets this year," adding, "Considering the current trend, it is cautiously speculated that the number has already surpassed Japan."
The number of convenience store outlets in Japan peaked at 55,911 in January 2021 and has been declining for 23 consecutive months. In contrast, the domestic convenience store market is still growing. The number of convenience store outlets surpassed 50,000 in 2021 and has been increasing by 1,000 to 2,000 annually.
The decrease in convenience store outlets in Japan is attributed to labor shortages caused by an aging population. The Japanese convenience store market size has grown every year over the past five years except for 2020, when the COVID-19 pandemic began. Last year, the total sales of Japanese convenience stores reached 11.6593 trillion yen (100.5696 trillion KRW), a 4.3% increase from the previous year. However, most convenience store owners are elderly, and chronic labor shortages have led to a series of store closures. According to Kyoto News, as of last month, more than 80,000 foreigners work part-time at Japan's three major convenience store chains, and this trend is expected to accelerate due to labor shortages caused by aging.
According to the Japan Fair Trade Commission, as of January 1, 2020, the average age of convenience store owners in Japan was 53.2 years, with those aged 50 and above accounting for more than 60%. In contrast, in South Korea, younger generations are entering the convenience store business. For GS25, operated by GS Retail, the proportion of owners in their 20s and 30s was 39.9% last year, the highest, while those in their 50s and 60s accounted for only 28.4%.
The number of convenience store outlets in South Korea is expected to continue increasing. The demand for convenience stores in close proximity is expanding as the number of one- and two-person households, considered a cause of low birth rates, increases. A convenience store industry official said, "Unlike Japan, the elderly in South Korea adapt quickly to IT," adding, "The growth trend of the convenience store market is expected to continue for the time being."
However, the domestic convenience store industry is turning its attention to overseas markets amid fierce domestic competition. GS25 entered Vietnam in January 2018, and BGF Retail's CU opened its first store in Mongolia in April of the same year. Currently, GS25 has 286 stores in Vietnam and 276 in Mongolia. CU's overseas stores include 395 in Mongolia, 143 in Malaysia, and 5 in Kazakhstan, while Emart24 has 52 stores in Malaysia and opened its first store in Cambodia this month.
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