TOKYO -- Japan's 100-yen shops are stepping up store openings as they continue to gain ground among thrifty consumers, with supermarkets and drugstores seeking them out as tenants to draw customers, shifting the dynamic in the nation's retail landscape.

The top four players, which offer a wide range of goods from clothing and food to toiletries and stationery that sell for 100 yen (93 cents), are on track to surpass their convenience store rivals in terms of net store openings this fiscal year.

Daiso Sangyo, the leading 100-yen shop operator in terms of sales, plans to open 170 locations during the current fiscal year. Runner-up Seria will open 150 outlets, while Can Do and Watts will add 80 and 115 stores respectively.

The 515 shops, combined with planned store closings, will result in a net 310 openings, which would exceed the 276 net openings for the three largest convenience store chains. The previous fiscal year had a record 537 new 100-yen shops open, but the net sum amounted to 294.

The four 100-yen shop chains, which operate 7,128 outlets in total, still pale in scale in comparison to the country's top three convenience stores, Seven-Eleven Japan, FamilyMart and Lawson, which oversee 51,965 stores combined. But the convenience stores are cutting back on openings in the face of labor shortages.

Partnerships with supermarkets are fueling the 100-yen shops' expansion. Inageya, a midtier supermarket chain, drew Daiso to set up shop on the second floor of a supermarket that opened last month in Kawasaki, a city in the greater Tokyo area.

"By having a 100-yen shop sell daily necessities, we were able to expand the shopping area for deli and fresh food," said an Inageya spokesperson. This is a classic example of a supermarket giving up on selling everyday goods and turning to a 100-yen shop to fill that need for customers on its premises.

Other retailers have joined the bandwagon. Drugstore chain Tsuruha Drug installed 100-yen stores in about 20 of its 2,000 outlets while Shimachu, a furniture and hardware seller, started adding the shops in 2017 and now has 18 in its stores. The 100-yen shops have lured a different type of customer, a Shimachu spokesperson said.

"People from the younger generation are coming to our stores," the spokesperson said.

Average daily traffic at 100-yen shops hovers around 800 people, topping the 700 people at drugstores. Same-store traffic at leading convenience store chains have been below previous-year numbers for three consecutive years since 2016. Meanwhile, Seria has bested annual traffic for four years running.

The brick-and-mortar 100-yen shops are also unlikely to lose customers to online shopping. "I see more fashionable products," said a woman in her 50s at one of the shops in Tokyo. "I also have fun choosing among them because they're affordable."

Amazon Japan does not present much competition to 100-yen stores whose per-customer spending averages around 600 yen because the e-commerce giant charges a delivery fee for checkout values below certain thresholds. This is why physical retailers fending off competition from online vendors are wooing them to become tenants and attract customers.

A stalled purchasing power among consumers will also be a tailwind for those stores. Real wages in May decreased 1% from a year ago, the labor ministry reported Tuesday, marking the fifth month of declines. Furthermore, consumers are expected to become thriftier in the face of the planned consumption tax hike in October.

But its business model does come with a major caveat. Narrow gross margins require an ever-wider network of outlets to grow revenue and profit.

This has exposed the shops to the effect of a national worker shortage and a jump in labor costs more than other retailers. Despite turning in 7.1% growth in sales for fiscal 2018, Seria's operating profit rose only 1.9%, and the profit margin retreated 0.6 points to 9.8%. Can Do's operating profit sank for the second straight year in fiscal 2018.

To reduce labor costs, Seria introduced self-checkouts at select stores in October, and will consider expanding the technology to 50 Tokyo locations this fiscal year. Daiso is installing QR readers at checkouts to reduce the time spent counting cash.

The companies offer low prices by importing goods produced cheaply in China or Southeast Asia. The current top four players are the survivors that weathered the yen's sharp decline against the dollar in the late 1990s, which sent procurement costs soaring. If the current trade war triggers major swings in the currency market, it could again upend the business model.