Seven Eleven unfairly banned franchise stores from discounting old bentos
Japan’s Fair Trade Commission has instructed Seven Eleven to halt its practice of banning franchise stores from discounting aging food (great news for those of us who would like to pay less for our bentos):
The FTC said the nation’s biggest convenience store chain had unfairly hindered the franchises from selling bento boxed lunches and other food products at lower prices when they were close to their expiration dates.
Under normal practice at Seven-Eleven Japan outlets, franchises have to incur the cost of items not sold.
Some franchises had tried to cut prices to reduce losses–as they are legally entitled to do–but FTC officials said Seven-Eleven Japan had put pressure on them not to. The FTC said the company had even threatened to terminate franchise agreements as a way of bullying the outlets, often run as small businesses, to comply.
Monday’s decision is likely to have a bearing on other convenience store chains, many of which use similar practices to stop discounting, analysts said.
In the above video clip, a franchise that has been engaging in the practice is shown. According to the franchise owners’ books, the revenue from sales has gone up and the cost of old bento disposal has gone down since the change. The owner had received threats from Seven Eleven, who told him they would not allow him to renew his contract because they “don’t need people who sell products at a loss.”
Seven Eleven has announced that it will now shoulder 15% of disposal costs for unsold items, which may be an attempt to convince some franchises that they should continue not discounting old bentos.
- Akihabara News – Gadgetry from Japan (Subscribe)
- dannychoo.com – Your portal to Japan (Subscribe)
- Kirainet.com – A geek in Japan (Subscribe)
American Sitcom / Japanese Commercial
Japanese Rifle Girl vs. Carnival Game
Not Paying Rent in Japan
Boar-riding Rodeo Monkey Triggers Cuteness Overload in Japan
Japan’s Oldest People
Aliens Invade Sushi Restaurant
Frenchman Denied Entry to U.S. Base Festival
Japanese Girl + Dangerous Job
Kamikatsu: Japan’s First Zero-waste Town?
George Shima: The Potato King
Greenpeace Activists Found Guilty of Theft
Diaper-headed Man Robs Convenience Store
7-11 is well-known for having a centrally planned inventory management system that allows for next to no local decision-making. All purchases are registered in the central computers, so the planners can tell when obento are running low. That system is highly efficient in terms of planning shipments and probably makes more money overall than a discount system (though discounting bentos might mean more money in franchisees pockets in the short term). It also lets the central planners learn consumer behavior and predict what needs to be stocked more or less. At least that is the theory.
I don’t know the details of the case, but it seems a little iffy. Part of what the franchisees are paying for is that inventory system, so I can understand why 7-11 isn’t all that happy about the decision.
Rate this comment:
0 
0