Will Eat-in Spaces in Japan’s Combini Disappear?

Eating in spaces eliminated at FamilyMart
There's no eating in the convenience store! At least, not anymore. FamilyMart has announced it'll shutter around a third of its eat-in spaces. Could this kickstart a trend?

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FamilyMart, one of Japan’s leading convenience store chains, recently revealed plans to shut down some of its eat-in spaces, gradually converting them into spaces for product sales. The company plans to shut down 2,000 of its 7,000 eat-in spaces nationwide by the end of the year. It hasn’t decided what to do with the remaining 5,000 eat-in spaces.

This decision marks a significant shift in the company’s approach to in-store space utilization. What will happen to the rest of FamilyMart’s eat-in spaces? And will other chains follow suit?

A shift in space usage

Since 2013, FamilyMart has been installing eat-in areas as part of its effort to enhance the customer experience. Eat-in spaces provide a comfortable space for customers to enjoy their purchases within the store.

At the time, these eat-in spaces were seen as a way to distinguish FamilyMart from its competitors. They provided added convenience, particularly for office workers and students. This feature catered to those looking for a quick break or meal.

In response to the recent announcement, many social media users expressed concerns over the space’s removal. Comments included, “I use it frequently, so losing it would be inconvenient,” and “Not having a place to eat during my lunch break at work would be a serious issue.”

However, there were also numerous comments from those indifferent to the change. Some users stated, “I never use it, so it doesn’t affect me,” and “I’ve never used it once.” Others remarked, “It’s just a hangout spot for elementary school children, so I hope they get rid of it quickly.”

A survey conducted by an online site revealed that over 80% of respondents answered either, “I’ve never used it,” or “I rarely use it.” This suggests that most customers may not utilize these eat-in spaces. Nonetheless, the eat-in corners remain valuable to some customers in areas where alternative places to eat are limited.

Combini in Japan: Your one-stop shop for everything

7-11 in Japan
Picture: Tada Images / Shutterstock

In Japan, combini are more than just convenience stores—they’re a way of life. Open 24/7, they cater to just about every need, from a quick meal or snack to paying bills or buying concert tickets. Whether you’re grabbing an onigiri on the way to work, picking up an umbrella during a sudden rainstorm, or printing out documents at 2 a.m., it acts as a hub for almost every aspect of life.

Combini have become such an integral part of daily life that it’s hard to imagine Japan without them. They aren’t just places to shop. They’re community hubs, offering a slice of modern Japanese culture all in one stop.

Moreover, the convenience store industry in Japan is thriving, with major chains like 7-Eleven, FamilyMart, and Lawson reporting record-breaking revenues. In 2023, Lawson achieved its highest-ever sales, operating revenue, and profits, highlighting just how essential these stores have become.

As foot traffic rebounded post-pandemic, demand surged for food and a wide range of products and services. FamilyMart officials attributed this growth to the return of many business workers to offices. They also noted a recovery in inbound tourism during their 2023 financial results briefing.

A decline in in-store demand

However, the global health crisis dramatically altered customer behavior, with fewer people dining inside convenience stores and opting for takeout or delivery instead. This shift prompted FamilyMart to reconsider the utility of its eat-in corners.

After the crisis, as customer needs continued to diversify, the company noticed a decline in the demand for in-store dining. At the same time, the desire for a wider range of products grew, particularly in categories like daily necessities and lifestyle goods.

In response to these changing trends, FamilyMart has decided to gradually phase out many of its eat-in areas. The company plans to convert this space into expanded sales areas, increasing the availability of high-demand items such as its popular “Convenience Wear” clothing line, such as the famous FamilyMart socks.

Additionally, the store will focus on essential goods like toilet paper, cleaning supplies, and other household items. The goal is to position FamilyMart not just as a place for quick snacks or meals but as a more comprehensive shopping destination for everyday needs.

What else is driving the closures?

Fujikawaguchiko,,Yamanashi,,Japan,-,April,12,,2017:,Familymart,Convenience,Store
Picture: Sean Pavone / Shutterstock

FamilyMart’s decision to reduce eat-in spaces has sparked questions about their significance in convenience stores.

In an interview with Business Journal, distribution analyst Akihito Nakai notes that the revenue from eat-in spaces is effectively zero because they don’t host any products for sale. He explains that while an eat-in area might encourage customers to purchase bento, its absence’s impact is unclear. It’s uncertain whether removing the eat-in space would deter purchases.

Ultimately, the effect of eat-in spaces on sales remains unverified by convenience stores. This leads to uncertainty about their overall contribution to revenue.

Moreover, maintaining and enforcing the rules of eat-in spaces can be challenging. In Japan, takeout food is taxed at 8%, while dining in incurs a 10% tax. This discrepancy in tax rates can confuse tourists who are unfamiliar with the system.

This results in situations where tourists pay the lower tax without indicating their intention to eat in the store. Additionally, there have been complaints about inappropriate behavior in these spaces that are not aligned with Japanese customs.

On another note, customer service industries, including the convenience store sector, are facing a significant labor shortage amid a steep population decline. This issue has intensified for the service industry from the rapid post-pandemic recovery and a surge in demand for services.

As foot traffic increases with the return of office workers and tourists, convenience stores are struggling to meet customer expectations while maintaining adequate staffing levels. Industry leaders have reported fierce competition for employees as businesses compete for a limited pool of talent.

Although some foreign workers have started to return, the overall labor market remains tight, hindering growth potential and affecting service quality. Some businesses have addressed this by establishing staffless shops and implementing robots, both of which have shown success thus far.

The road ahead

Rather than applying a one-size-fits-all solution, FamilyMart says it’ll assess the impact of these modifications on a store-by-store basis. This method allows the company to ensure that its stores remain aligned with local customer needs while maximizing available space.

How this will impact customers who relied on FamilyMart as a “third space,” however, remains to be seen. Given the ho-hum customer response to the decision and the number of people who said they never used the spaces, we may see more aggressive closures going forward.

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What to read next

Sources

店舗売り場面積拡大に向けイートインを売り場に変更 FamilyMart

ファミマ、2千店イートイン廃止の密かな狙い…複雑な「コンビニ壁際」事情 Business Journal

【2023年度上期決算まとめ】セブン、ファミマ、ローソン、コンビニ3社とも事業利益が過去最高に Business Insider

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