FamilyMart Japan reveals results of shorter trading-hours test
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A trial to reduce business hours has resulted in a 59 percent drop in operating profits for FamilyMart Japan.The trial by the traditionally 24-hour convenience-store chain operator was conducted from October to December at around 600 FamilyMart outlets to assess the effect of cutting late-night hours of business.
While average labor costs fell 11 percent at participating stores, the average drop in sales of 6.7 percent led to the operating profit declines, according to a Jiji Press report. 41 percent of the outlets recorded growth in profits.
FamilyMart Japan has now announced that it will allow its franchises to apply to reduce their hours permanently beginning in June.
“From now, we will ask franchise store owners to decide whether to shorten service hours,” said FamilyMart VP Toshio Kato.
Stores will be allowed to close late-night and early-morning operations daily or on Sundays only.
Questions & Answers
Q.What was the main financial outcome for FamilyMart Japan during the trial of shorter trading hours?
What was the main financial outcome for FamilyMart Japan during the trial of shorter trading hours?
The trial resulted in a 59 percent drop in operating profits for FamilyMart Japan. This was primarily due to an average 6.7 percent drop in sales at participating stores, despite an 11 percent reduction in average labor costs.
Q.How many stores participated in the trial to assess the impact of reduced business hours?
How many stores participated in the trial to assess the impact of reduced business hours?
Around 600 FamilyMart outlets participated in the trial from October to December. During this period, 41 percent of these outlets actually recorded growth in profits, despite the overall negative impact on operating profits for the company.
Q.What decision has FamilyMart Japan made regarding store operating hours after the trial results?
What decision has FamilyMart Japan made regarding store operating hours after the trial results?
FamilyMart Japan will now allow its franchises to apply to permanently reduce their hours starting in June. Franchise store owners will decide whether to shorten service hours, including closing late-night and early-morning operations daily or only on Sundays.
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