Give employees a break or cash in on New Year’s Day?

Amid a severe labour shortage, retailers and restaurant chains face a dilemma over the year-end and New Year period: Should they briefly close their doors for a holiday, or keep the cash registers ringing? (The Japan News/ANN)
Amid a severe labour shortage, retailers and restaurant chains face a dilemma over the year-end and New Year period: Should they briefly close their doors for a holiday, or keep the cash registers ringing? (The Japan News/ANN)

Tokyo (The Japan News/ANN) — A growing number of retailers and restaurant chains are opting to stay closed on New Year’s Day. The business model of staying open every day, which the convenience store industry had spearheaded, has reached a turning point, but it remains unclear whether this change will take root since closing during the busy New Year period could dent profits.

Major supermarket operator Ito-Yokado Co. will close 16 stores — about 10 percent of its stores in the nation — on Jan. 1. Most of these supermarkets are in the Tokyo metropolitan area, including The Price discount stores and Shokuhinkan grocery store. In 2019, only three Ito-Yokado stores were shut on New Year’s Day, for reasons such as being located inside facilities that were not open for business.

Ito-Yokado hopes the closures will boost staff morale and prompt a rethink in the way employees work. “The view that stores should be open in the New Year had become ingrained among retailers,” an Ito-Yokado official said.

“We’ll conduct these closures on a trial basis in response to changes in society.” The company will examine factors including the temporary closure’s impact on overall sales and consider expanding the number of stores shut on New Year’s Day from next year and beyond.

Summit Inc., which operates supermarkets mainly in the Tokyo metropolitan area, has decided to continue last year’s policy and close its stores on Jan. 1 and 2. Maruetsu Inc. also will keep almost all of its supermarkets and stores closed on New Year’s Day.

Convenience stores had championed the mantra of being open around the clock every day of the year, but change is appearing in this industry, too. A growing number of convenience stores will be closed on New Year’s Day. As a trial, 102 Lawson Inc. franchise stores in Tokyo and 24 prefectures will be closed that day.

The chain’s head office chose which stores will be closed. These stores are in various locations, including office districts that have few customers on holidays. “It should also be reassuring for our stores if we have a system under which they can have a day off on New Year’s Day,” Lawson President Sadanobu Takemasu said.

retailers and restaurant chains in Japan started opening on New Year’s Day in the 1980s, spurred partly by the spread of convenience stores that were open 24 hours. This business model of being open at any time in any place took hold, so supermarket operators such as Ito-Yokado and Daiei Inc. followed suit by opening their doors on the first day of the year. Restaurants started to do likewise.

“When we started opening on New Year’s Day, we saw an increase in families and young customers,” a source at a major restaurant chain said. “It became a day when we could expect to turn a profit.”

However, as the nation’s labor shortage became increasingly severe, restaurant chains led the move to quit operating on New Year’s Day.

Since 2018, restaurant chain operator Ootoya Holdings Co. has closed its outlets on Dec. 31 and Jan. 1. One Ootoya restaurant manager said, “I never imagined I could have time off around the New Year, so at first I didn’t believe it.”

This coming New Year will be the third in which Ootoya has implemented these closures, and 183 Ootoya restaurants — about half of its outlets — will be closed on those two days.

Although overall sales on New Year’s Day will drop by about ¥50 million, an official at Ootoya’s head office said, “We made the decision to close those stores on that day after considering whether we could make a profit after paying our labor expenses.”

Allure of Year’s 1st Sale

However, not every company is embracing the wave of New Year’s Day closures.

In response to requests from some convenience store owners wanting to keep their doors closed on New Year’s Day, Seven-Eleven Japan Co. will start an experiment in which about 50 outlets will be shut that day. These will be directly managed outlets, and not franchise stores.

Convenience store operator FamilyMart Co. will dispatch regular full-time employees from its head office to franchise stores so owners and managers can take time off under its “help system.” FamilyMart President Takashi Sawada said, “If other chains are closed temporarily, of course some other stores will want to use that chance to bring in some extra money.”

Most department stores are closed on New Year’s Day, but there is a deep-rooted reluctance to stay shut for the first three days of the year because of concerns that this will hurt sales.

Isetan Mitsukoshi Holdings Ltd. has since 2016 closed most of its stores on Jan. 1 and 2 as part of work-style reforms for its employees and shifted the start of its first sales of the year to Jan. 3. However, rival department stores continued to begin their New Year sales from Jan. 2.

Despite the company’s best intentions, some employees suggested it would be better to take days off at other times, not during the first three days of the year when customers were keen to shop. The year’s first sale is a major event for a department store, and Isetan Mitsukoshi has decided to move the 2020 New Year sale back to Jan. 2.

“We have responded to the customers who told us they want to buy fukubukuro grab bags,” Isetan Mitsukoshi President Toshihiko Sugie said.