How 7-Eleven struck back against an owner who took a day off

Hisako Ueno, The New York Times

Posted at Jan 07 2020 08:41 AM

Mitoshi Matsumoto works at his 7-Eleven franchise near Osaka, Japan, on Dec. 25, 2019. The company that controls the 7-Eleven chain, Seven & I Holdings, terminated Matsumoto’s franchise last week after he decided to close his store on New Year’s Day, and it has stopped supplying him. Noriko Hayashi/The New York Times

HIGASHI-OSAKA, Japan — The rice balls are gone. So are the juice bottles, which Mitoshi Matsumoto priced to sell early. Most of his store’s shelves stand empty, but he has kept some cigarette cartons and bottles of alcohol in the hope that his long-running battle with the 7-Eleven convenience store chain will end in his favor.

The company that controls the 7-Eleven chain, Seven & I Holdings Co., terminated Matsumoto’s franchise last week after he decided to close his store for a day on New Year’s Day, and it has stopped supplying him.

It was the latest battle between Matsumoto and one of Japan’s most well-known companies over harsh working conditions in the Japanese convenience store industry, which demands that stores stay open seven days a week, 24 hours a day, for all 365 days a year.

Matsumoto remains in business, but just barely. The screen on the ATM flashes “not in operation.” His two full-time employees are ready to jump to new jobs once he finally closes, and his seven part-time employees no longer show up.

Still, he plans to stay open as long as he can.

“I want to stay in business for the sake of myself and other owners throughout the country,” said Matsumoto, 57, who says he plans to continue his fight in a local court.

A spokesman for Seven & I, Katsuhiko Shimizu, said the company terminated Matsumoto’s contract on Dec. 31. He denied that the termination was tied to Matsumoto’s plan to close for a day, and instead cited numerous customer complaints about the store and Matsumoto’s disparaging remarks about the company on social media.

Matsumoto’s fight with 7-Eleven has made him famous in Japan, a country that has long struggled with a strenuous and sometimes deadly work culture.

Government figures show overwork was blamed for 246 claims related to hospitalization or death in 2018. The retail industry was one of the biggest sources, officials show. Another 568 workers took their own lives over job-related exhaustion. The phenomenon is so common that Japan has coined a term for it, “karoshi.”

Overwork has become an even bigger issue as the Japanese population ages and shrinks. Though the country’s economic growth has been weak for years, the labor market has tightened considerably as more workers slip into retirement and fewer young workers take their place. While Japan is rethinking its tough immigration laws, the rules still generally keep people from moving to the country to fill in the gap.

Those strains are particularly evident in the convenience store industry. Japan’s convenience store chains have expanded dramatically in recent years in an effort to capture market share at one another’s expense.

While the expenses were minimal for the chains, the expansion took a toll on the franchisees who operate the vast majority of Japan’s more than 55,000 convenience stores. Unable to find dependable workers, many owners increasingly worked themselves.

“Under the current situation, the company can have it both ways,” said Naoki Tsuchiya, a professor at Musashi University in Tokyo and an expert on labor issues in convenience stores industry, who called Matsumoto “a significant figure” in the nationwide discussion over the industry. “They don’t have to take risks, but the owners have to take them.”

Matsumoto first drew attention a year ago. Under pressure to find workers and unable to take a day off himself, he decided to close his store before midnight. When 7-Eleven threatened his business, he contacted local reporters.

“In the last seven years, I managed to take only three trips with my wife,” he said over the weekend. “Even back then, I was preoccupied with store operations, worrying about sudden cancellation by part-time workers. I had to hold a mobile phone while I soaked in a spa.”

The clash drew renewed attention last month, when Matsumoto declared his intention to close his store for a day on New Year’s Day, Japan’s most important holiday. Days later, 7-Eleven threatened to close his store.

When Matsumoto reopened on Jan. 2, the threat appeared to have been carried out. The company’s vast and super-efficient logistics system had stopped sending fresh supplies. The sales terminal where employees ring up goods is still online, but little else appears to be connected to the 7-Eleven apparatus that runs nearly 40% of Japan’s convenience stores.

Matsumoto says he still has business. Supportive customers have shown up to shop among his remaining inventory, which includes snacks, instant noodles, stationery items, detergents and cosmetics.

One of them, Hiroshi Nakayama, a 45-year-old electrical equipment wholesaler, had long watched the fight between Matsumoto and 7-Eleven and went to the store after his son’s soccer game to check in. The whole fight could have been avoided, he said.

"There must have been other solutions to fix the bad relationship with the company,” said Nakayama, who turned up on Saturday after Matsumoto, running on a skeleton staff, had closed for the night. “They could have discussed it more. It’s both sides’ fault.”

Matsumoto said another store owner, from the city of Kyoto, came to visit to express support, but he declined to provide a name.

Despite his troubles with the company, Matsumoto said he hoped a legal fight would restore his franchise and allow him to open up. He said 7-Eleven offered to pay for his remaining inventory — owners are responsible for buying their own products from the company at wholesale prices — but he refused. He wants Japan’s convenience store industry to change instead.

“If I win the case, I hope more will follow and raise their voices,” he said. “If I lose, many will get depressed and more afraid of 7-Eleven.”

That is why, he said, he plans to fight to the bitter end.

“It doesn’t matter if I win or lose,” Matsumoto said. “I just want to disclose everything in my case. I believe the justice will be given.”