Japan's beleaguered shoppers are a worry for convenience stores and the economy

FAST RETAILING

29/10/2026 23:51

    By Yusuke  Ogawa and Sam Nussey
       TOKYO, Oct 30 (Reuters) - Kana Sekiya, 43, used to shop
near a train station in Tokyo on her way back home from work.
Now she drives more than 30 minutes on weekends to a discount
supermarket to buy groceries in bulk — one of a growing number
of consumers shifting their shopping habits as prices rise. 
    "I've totally stopped going to convenience stores because of
the rising cost of living," she said. 
    Sekiya's changing shopping habits are not just a concern for
Japan's once unassailable convenience stores, or 'conbini', but
also a worrying sign for the economy, which has exited decades
of deflation. 
    Underlying inflation rose in September at the fastest annual
pace in three years, according to Bank of Japan data, exceeding
its 2% target. The bank is likely on Friday to signal a rate
hike could come as soon as December, taking the economy into
territory not trodden for more than 30 years. 
    "Consumers have become extremely demanding when it comes to
prices," said Seiji Kitamura, head of group merchandising
strategy at 7-Eleven owner Seven & i  3382.T , which operates
around 23,000 outlets across the country.  
    "Their desire to save has grown more than we anticipated." 
    Customer numbers at convenience stores have fallen for 15
consecutive months, according to data from the Japan Franchise
Association. In September, numbers fell by 3.8% from a year
earlier, the most since September 2021 during the COVID-19
pandemic.
    The increasing thriftiness of Japanese consumers — many of
whom have never experienced widespread price gains in their
lifetime — is likely to cause wider economic issues. 
    "With private consumption accounting for about half of
Japan's GDP, there are concerns that increased household
belt-tightening could weigh on the broader economy," said Ryohei
Ikeda, an analyst at Mizuho Research Institute.
    Japanese companies used to be famously reticent to raise
prices, with ice pop maker Akagi Nyugyo apologising in 2016 for
a 10 yen ($0.06) hike.
    But food and drink makers hit by the weak yen and higher oil
prices raised prices on more than 20,000 items in 2026 for a
second year. Amid the increases, Japanese convenience store
operators are facing squeezed consumers seeking cheaper
alternatives.
    "Competitors such as drugstores and mini-supermarkets are
putting value for money front and centre," Takeshi Inoue, a
corporate manager at Itochu's  8001.T  FamilyMart, said at an
earnings briefing.
    "We haven't been able to fully meet customers' needs." 
    Sekiya said she is feeling the pinch when buying goods such
as meat, vegetables and alcohol. She now shops at two discount
supermarkets — Lopia and OK — to maximise savings.  
    To attract customers to its "conbinis", Seven & i is
introducing its lower-priced own-brand range, "Seven The Price",
which includes precooked chicken and bacon rashers and is priced
around 20% below branded alternatives.
    Last month, FamilyMart said it would offer morning discounts
when customers bought bread or rice balls together with drinks
such as coffee. 
     
    PORK CUTLET RICE BOWLS 
    In contrast to convenience stores, some supermarkets that
compete aggressively on price are seeing robust customer traffic
growth.
    Seiyu, which was acquired last year by discount chain Trial
Holdings  141A.T , recorded a 6.9% year-on-year increase in
customer numbers at existing stores in September. 
    "Wage growth has not kept pace with inflation, creating
favourable conditions for discount retailers," said Seiyu
President Hitoshi Narakino. 
    Walmart  WMT.O  previously struggled to make a success of
Seiyu, with private equity firm KKR  KKR.N  acquiring the
business before selling to Trial. 
    Kyushu-based Trial has brought its popular 299 yen pork
cutlet rice bowls and 199 yen egg sandwiches to Seiyu stores,
where it is also bolstering supplies of fresh meat and fish.  
    Conbini are also under threat from mini-supermarkets, with
Trial opening small format Trial GO stores in Tokyo and Aeon
 8267.T , Japan's biggest retailing group, expanding its My
Basket chain. 
     
    CRANE GAMES 
    As higher oil prices due to the Iran war feed through to
electricity and gas bills, inflation is likely to top 3% in
early 2027, said Taro Saito, a research fellow at the NLI
Research Institute.
    Real wages are also likely to turn negative next year,
potentially further squeezing households, he said.
    With rising labour and utility costs squeezing franchisees,
conbini operators are looking outside of food to grow revenue. 
    FamilyMart is installing crane games and capsule-toy
machines in about 5,000 stores by reducing space allocated for
magazines and eating in. 
    Lawson, which is owned by Mitsubishi Corp  8058.T  and KDDI
 9433.T , has also installed toy machines at about 1,500 stores.
    There are also signs of price sensitivity across the broader
retail sector. 
    Uniqlo parent Fast Retailing  9983.T  this week said it was
scrapping a planned price hike for a colour socks line that was
set to take effect from November 10.  
    "As socks are an essential everyday item, in Japan we
reconsidered our planned price revision," Fast Retailing said. 
     
    ($1 = 157.8100 yen)

    (Reporting by Yusuke Ogawa and Sam Nussey; Editing by Anne
Marie Roantree and Christian Schmollinger)
 ((mailto:sam.nussey@tr.com;))