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Japan|A Riot by a Franchise Store Shaking The Kingdom of Seven-Eleven

Apr 15, 2019.Ichiro KumegawaTokyo, JP
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The fall of Seven & i Holdings Co., Ltd.'s stocking price can not be stopped easily. The dispute over providing 24-hour service between Seven-Eleven Japan, the parent company, and its franchise store raised on February 1, causing the president Kazuki Furuya (69 years old) to resign as the Chairman of Board. Even though Fumihiko Nagamatsu (63 years old), the vice president, will be promoted to president, with the company's downward revision, its stock price dropped to 3975 yen at the close, a 106 yen drop comparing with the previous day, dipping below 4000 yen on April 9  - it seems that the replacement of president could not quite turn the trick. The issue began with the decision made by the franchise stores in Higashiosaka, Osaka Prefecture, which closed at 7pm on February 1 due to a staff shortage, that ended up being threatened by Seven-Eleven Japan with a 17-million-yen fine for violating the franchise contract. The issue had been widely spread through social media and mass medias such as websites, newspaper and TV, and brought the matter into spotlight. In other words, it is a riot raised against the parent company by a franchise store which has long been squeezed. As a result, on March 3, Seven-Eleven Japan announced to begin a trial run of closing 10 outlets from 11pm to 6am. However, things went athwart. The stock price fell to 4785 yen, a 83 yen drop, on March 4 and dropped nearly 1000 yen in one month and more- as mentioned above, the fall as unstoppable even though a new president was promoted.

Seven-Eleven, the company that established convenience stores in Japan, currently owns approximately 20,000 convenience stores in the country and maintained a comfortable lead over rivals in the industry. The convenience store industry has become a key player in the Japanese retail sector that, according to the Japan Franchise Association, racked up annual sales of 10 trillion and 964.6 billion yen in 2018, in which Seven-Eleven represent 42%, followed by FamilyMart of ITOCHU Corp. (29%) and Lawson of Mitsubishi Corp. (19%).

Following the resignation of the entrepreneur Toshifumi Suzuki, former CEO and president of Seven-Eleven, controversy over the around-the-clock service has became another issue shaking the kingdom of convenience store. But differ from the resignation of Suzuki, a result of the internal conflict that staked one's prestige, the issue this time is putting the business results on the line that Seven-Eleven definitely needs to handle it wisely and carefully. The highest stock price recorded of Seven & i Holdings Co., Ltd. is 5998 yen on August 6, 2015. But the stock price had been remaining at 3000 yen level since 2014. In another sense, the matter is more than just a dispute over the 24-hour service. It is an issue that concerns the state and the nature of convenience store, shaking the leading status of the kingdom of Seven-Eleven which consists of 20,000 stores with 5 trillion yens.

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