Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How a Tiny Japanese Convenience Store Chain Reinvented Itself
Transcript
- Lucas: So we're all familiar with 7-Eleven — it's the world's largest convenience store chain, with over 80,000 stores globally. But today I want to talk about the number two player in Japan, Lawson, and how its CEO, Sadanobu Takemasu, is pulling off something pretty unexpected. Luna: Unexpected how? I mean, convenience stores are so… convenient. What's left to reinvent? Lucas: Well, for one, Lawson was stuck. For years, they were losing ground to 7-Eleven and FamilyMart. Same-store sales were flat, customer traffic was declining, and they were seen as the boring middle child. Then Takemasu took over in 2022 and basically said, 'what if we stop being a convenience store and start being a community platform?' Luna: That's a big pivot. And it's working? Lucas: In fiscal 2025, same-store sales at Lawson rose about six percent, and customer traffic was up too. Not explosive, but steady, which in that market is actually notable. What's more interesting is how he did it. Luna: Alright, I'm hooked. Walk me through the playbook. Lucas: First move: he cut product variety by about 30 percent. Which sounds counterintuitive for a convenience store, but the logic is that too many choices actually paralyze shoppers and create waste. He focused on fresh meals — bento boxes, salads, sandwiches — made locally and replenished multiple times a day. Luna: So they went from selling everything to selling the right things. Makes sense. But what's the community part? Lucas: That's the second move. Lawson stores in residential neighborhoods started offering services you'd never expect: dry cleaning drop-off, package pickup, even a place to pay utility bills. In some rural areas, they became the de facto town hall — hosting health checkups and government form submissions. Luna: Wow. So a convenience store as a one-stop shop for daily life, not just snacks. That's a lot of trust to build. Lucas: Exactly. And the numbers show it's working. In stores that adopted the full community-hub model, sales per square foot are up about 12 percent compared to traditional Lawson stores. The key is that they listen to each neighborhood — they tailor services to what locals actually need. Luna: That sounds like a lot of local autonomy. How does a chain as big as Lawson manage that without losing control? Lucas: Good question. Takemasu decentralizes decision-making to the store level. Franchisees and even part-time workers are encouraged to propose changes based on local demand. In one store, they started selling fresh rice from a nearby farm because a customer suggested it. That rice now accounts for 15 percent of that store's daily sales. Luna: That's a great story. But I wonder — doesn't this slow down the supply chain? I mean, convenience stores run on tight logistics. Lucas: It does add complexity. Lawson had to invest in a more flexible distribution network, and they now use AI to forecast daily demand per store, which helps reduce waste. The result is that they can deliver fresh items in smaller batches, which actually cuts food waste by about 20 percent across the chain. Luna: So it's not just a feel-good story — there's a real operational backbone. I love that. Lucas: And it's paying off beyond sales. Lawson's employee retention has improved, too. When staff feel like they have a say, they stay. Turnover in the pilot stores is down 15 percent. Luna: That's a big deal in retail, where turnover is brutal. It also makes me think about how this applies beyond convenience stores — any business that listens to its frontline workers and customers can find new growth. Lucas: Right. And that's actually the core lesson from Takemasu's playbook. He didn't just rearrange the shelves; he changed the mindset from 'we sell products' to 'we serve the community.' That's a leadership shift that's hard to copy. Luna: And it's interesting because we often think of innovation as high-tech or flashy, but this is about listening and small, consistent improvements. That's a lesson in itself. Lucas: Absolutely. And you know, if today's conversation gave you a new way to think about retail or leadership, that's exactly why we do this. The show stays free because of listeners like you, not ads. So if you got something useful, you can support us at buy me a coffee dot com slash fexingo. It's a small gesture that keeps these conversations going. Luna: Yeah, it really helps us keep doing what we love. Even a virtual coffee is appreciated. Now, back to Lawson — what's the risk here? Lucas: The biggest risk is that they over-commit to the community niche and lose the core convenience that made them popular in the first place. If you're a busy office worker, you don't want to wait in line behind someone filing taxes. So they have to balance the new services with speed. Luna: That's a real tension. Are they doing anything to address it? Lucas: They're rolling out self-checkout kiosks and dedicated counters for services, so the core grab and go customers can still be in and out in under a minute. They're also testing separate entrances for service areas in some stores. It's a work in progress. Luna: So this is a long-term bet. What would you say is the takeaway for other CEOs? Lucas: For me, it's the willingness to challenge the very nature of your business. Takemasu asked, 'what is a convenience store for?' and he answered it for a new era. That kind of questioning is what turns a fading brand into a comeback story. Luna: And it's a reminder that sometimes the best innovation is about serving people better, not just selling more stuff. I think we can all take that to heart. Lucas: Exactly. So next time you're in a convenience store, take a look around. You might be seeing the future of retail, one bento box at a time. Luna: I'll definitely be paying more attention. Thanks for the deep dive, Lucas. Lucas: Thanks for listening. And if you enjoyed this, check out our other episodes — there's plenty more where this came from.