They are intended for the hungry student who doesn’t feel like cooking after a day full of lectures. And for the handyman who has cut his fingers and is without plasters. For the tourist who is still looking for tickets for a concert at the last minute. And for the businessman who pulls through the night, but wants to show up at the office in a clean shirt the next morning.
Anyone who has ever visited Japan simply cannot have missed the konbini: the convenience store that can be found on just about every street corner in every city. When the streets are shrouded in twilight at night, the brightly lit buildings are easy to find. They are open all day and sell everything a consumer needs: from food and drinks to magazines, clothing, detergent and screwdrivers.
At the basis of the success of the konbini – a derivative of the English convenience store – is multibillionaire Masatoshi Ito. Although it was not Ito who was the first to open such a neighborhood supermarket in Japan, he did introduce the concept as it is known throughout the country today. This week, Seven & I Holdings, the world’s largest convenience store operator, announced that founder Ito has passed away at the age of 98.
Visit to the US
Ito started his multibillion-dollar empire at his family’s business, Yokado, a single-branch clothing store on the fringes of Tokyo’s massive downtown. The business was run by his uncle and his half-brother at the time, and Ito started it shortly after World War II – after briefly serving in the army. After his half-brother died in 1956, he took over the clothing store at the age of 32 and renamed it Ito-Yokado.
During a visit to the United States in the early 1960s, Ito saw the future. Just like supermarket entrepreneurs Albert Heijn and Karel van Eerd van Jumbo, he marveled at the huge shops, often on the outskirts of the city, that sold almost everything. Ito saw enormous advantages in logistics: everything was fresh, the scale was enormous and the consumer served himself.
The entrepreneur decided to bring that concept to Japan. It was a success, partly because restrictions applied to department stores in the country, so there were actually no shops with such a wide range. However, the same ban, intended to protect markets, also applied to supermarkets in the 1970s, forcing Ito-Yokado to look for alternatives.
In the end, it was a young manager, Toshifumi Suzuki, who pointed Ito to the smaller convenience stores. After all, there were no rules for this, and by carrying a very wide range, they were still an addition to the existing local shops. He convinced the company and its founder to work with a partner who already had experience with such stores. That became the American 7-Eleven.
Open all day
In 1974, Ito-Yokado opened its first small store, again on the outskirts of Tokyo. After only a year, that name turned out to be no longer accurate: the American owner once chose to indicate the opening hours – from seven in the morning to eleven in the evening – but was already open all day in the mid-1970s.
The Japanese franchisee decided to follow suit. The small convenience stores turned out to be a direct hit. In Japan’s booming economy, where workers worked very long hours, 7-Eleven was exactly what consumers wanted. Competition soon followed: from the also American Lawson, for example, or Family Mart, founded in Japan in 1981. But almost fifty years after that first branch, 7-Eleven is still the largest: of the nearly 65,000 convenience stores in Japan, that chain operates more than 21,000.
Aided by the success of the convenience stores, Masatoshi Ito’s company grew into a retail giant in the 1980s. At that time, Ito-Yokado also had its own department stores and restaurants, such as the Denny’s formula, which was also imported from the US. That growth made founder Ito one of the richest inhabitants of his country.
Where 7-Eleven turned out to be a resounding success in Japan, the namesake in the US had a very difficult time in those same years. The group faltered after the stock market crash of 1987 and threatened to go bankrupt a few years later. That was the moment for Ito to seize power: for 430 million dollars (405 million euros), he took over 70 percent of the shares.
Completely Japanese
The acquisition of his franchisor was not just a business opportunity, Ito would tell the Japanese business newspaper Nikkei years later. He did it mainly because he was afraid that the management, which in his eyes acted carelessly, would damage the Japanese branch. However American the name may sound, the chain has been completely Japanese ever since – just like competitor Lawson, by the way.
Yet it was Ito himself who threatened to damage his company’s reputation two years later. The founder came under fire in 1992 after it emerged that his company’s employees had paid money to criminal gangs to prevent them from causing disorder at an annual meeting. Although Ito denied any direct involvement, he did resign. Toshifumi Suzuki became his successor.
Only years later did Ito – by now a minority shareholder – return to the company he developed. That happened after Ito-Yokado also bought the last 30 percent of 7-Eleven, taking full ownership of the world’s largest convenience store operator. The parent company’s name was renamed Seven & I, a reference to Ito’s surname. The founder was given a role as honorary chairman, which he held until his death.
A version of this article also appeared in the newspaper of March 21, 2023