KYODO NEWS - Oct 11, 2019 - 15:34 | All, Japan

The number of domestic convenience stores operated by Seven-Eleven Japan Inc. dropped by 24 in September from the previous month to 20,993, marking the first fall in five years, company officials said Friday.

The data come a day after its parent, Seven & i Holdings Inc., unveiled major restructuring plans at its group firms, including a planned cut of about 3,000 jobs.

The fall in the number of stores apparently reflects slowing growth in the industry as the domestic convenience store market has become saturated.

But Seven-Eleven Japan said the drop was only temporary. The company has slowed down the pace of store openings amid criticism it was forcing 24/7 operations on franchisees despite an acute labor shortage.

On Thursday, Seven & i Holdings said it will shut down five department stores and downsize two others operated by Sogo & Seibu Co. by February 2021.

The parent company said it will close or transfer operations to other companies of 33 supermarkets run by Ito-Yokado Co. by the end of fiscal 2022.

The restructuring at Sogo & Seibu and Ito-Yokado would result in a cut of some 3,000 in total, 1,300 and 1,700 respectively.

The retail industry is faced with challenges such as rising labor costs and fierce competition posed by e-commerce rivals.

For Seven-Eleven convenience stores, Seven & i Holdings said it will reduce the amount of royalties paid by franchisees in consideration of rising labor costs, and start reviews for closures or relocations of 1,000 unprofitable stores later this year, 300 more than last year.

"We will promote selection and concentration," Seven & i Holdings President Ryuichi Isaka told reporters. "We decided on the closure of stores that we judged would have a difficult time improving profitability."