Chinese Convenience Store Business
Providing Safe and Reliable Products
In China, where concerns over food safety and integrity have been mounting, SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN) and SEVENELEVEN (CHENGDU) work to provide safe and reliable products by leveraging quality management and product development capacities cultivated in Japan.
Product Quality Management
For the Group’s private-brand products in China, strict standards are applied in selecting ingredients, and processing plants that maintain high quality levels are selected through a screening process based on whether they have experience exporting to Japan and other criteria.
We have strengthened quality management at dedicated plants producing only the Group’s products by incorporating international food safety management systems and measures implemented at plants in Japan. Beijing Wang-Yang Foods and JEANAVICE factories, which are dedicated plants of SEVENELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN), obtained the “SC” food production license for chilled foods in February 2017, earlier than peer companies in the industry. “SC” is a regulatory requirement related to food production in China. Food manufacturers must acquire the “SC” license by switching from the existing “QS” food quality and safety license by October 2018. In addition, Q’s Café plants acquired HACCP*1 certification in March 2017, while Beijing Wang-Yang Foods acquired it in March 2018.
The three companies are working on automating their manufacturing process to better stabilize product taste and quality. Chengdu Yonglida Food Limited Company , which supplies products to SEVEN-ELEVEN (CHENGDU) , expanded its installation of rice ball molding and wrapping machines in July 2018, and it introduced noodle-making machines starting in 2019. Beijing Wang-Yang Foods has been introducing more machines at its plant dedicated to stuffed bread , which began full-scale operations in March 2019, with a focus on the bread production process and product wrapping.
SEVEN-ELEVEN (CHENGDU) also began cultivation management at its dedicated production sites starting February 2019, and it began sales of salads made using very fresh vegetables by using low-temperature transportation and processing (cold chains). Similarly, SEVEN-ELEVEN (TIANJIN) began selling salads using cold chains starting July 2019.
- *1HACCP (Hazard Analysis and Critical Control Point) food sanitation management method
Giving Consideration to Health
Trans-fatty acids, which are said to increase the risk of heart disease, were successfully reduced to zero in the original room-temperature bread products of SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN). In addition, since January 2019, allergens have been displayed for rice balls and sushi, and this is gradually being expanded to boxed lunches, sandwiches, and other products.
Improving Customer Satisfaction
The three companies are working to collect customer feedback in order to improve products and services from the standpoint of customers. Feedback obtained from customers is shared with departments and stores on a daily basis. In addition, in order to grasp changes in customer needs and reflect them in products. SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (CHENGDU) conduct periodic customer surveys. In the fiscal year ended February 28, 2019, SEVEN-ELEVEN (BEIJING) conducted a survey aimed at 1,000 customers. Because we learned from the survey that many customers from neighboring residential areas are making use of it, we reviewed our lineup of sundries .
The three companies have been conducting training to further improve the customer service provided by employees. For example, starting in the fiscal year ended February 28, 2018, SEVEN-ELEVEN (TIANJIN) has been conducting cash register customer contact training at certain stores, and due to the significant improvements, the company introduced the training to all stores starting in the fiscal year ending February 28, 2019.
In addition, SEVEN-ELEVEN (CHENGDU) placed trainers in charge of store training and is working to improve customer service through customer service training and daily practice.
SEVEN-ELEVEN (BEIJING) created customer service awards to recognize employees who provide outstanding customer service. The awards are presented in a group ceremony every three months. We will strive to enhance motivation by presenting awards to recipients at meetings and other such forums in conjunction with striving to increase examples of best practices for employees to follow by making the award-winning activities widely known.
Presentation of awards by SEVEN-ELEVEN (BEIJING)
Thriving with Local Communities
Each company conducts social contribution activities as members of their local communities.
Environmental Preservation Measures through In-Store Donations
SEVEN-ELEVEN (BEIJING) installed collection boxes in stores and has been collecting money from customers since November 2006. The funds are donated to the Beijing Green Fund, an officially-recognized environmental preservation organization. The Fund uses donations from the public to plant trees as countermeasures against sandstorm damage and desertification, creating tree fences that prevent sand movement in and around Beijing.
Starting the fiscal year ended February 28, 2019, as an activity in which customers could easily get involved, it began an initiative in which part of the proceeds from customers’ coffee purchases were donated to the Beijing Green Fund . This initiative resulted in donations of 25,639 yuan, and a total of 108,974 yuan was donated for the year.
|148,189 yuan||126,434 yuan||108,974 yuan|
Assisting with University Fundraising Activities
SEVEN-ELEVEN (BEIJING) is assisting with the China Foundation for Poverty Alleviation ’s “100 Good Deeds ” project, a fundraising activity carried out primarily by university students. This project is a fundraising activity aimed at providing stationery and such to the children of poor families in which university students solicit donations on the streets on weekends. In the three-month period from October to December 2018, SEVEN-ELEVEN (BEIJING) has provided gathering spots and rest areas at seven stores every Saturday for university students participating in fundraising activities.
“100 Good Deeds” Fundraising Project
Support for Children
Since 2013, SEVEN-ELEVEN (CHENGDU) has continuously provided support for Benevolence House, a home for children with brain disorders. In the fiscal year ended February 28, 2019, employees visited the facility in December to participate in a Christmas event, putting on performances and playing games with the children. In addition, the employees provided daily essentials and other presents.
In addition to supporting Benevolence House, SEVEN-ELEVEN (CHENGDU) conducts support activities for communities. In the fiscal year ended February 28, 2019, SEVEN-ELEVEN (CHENGDU) donated masks equivalent to approx. 200,000 yuan to the sanitation workers of Chengdu’s Wuhou District. In recognition of this donation, the company received a Most Charitable Company Award from the Wuhou District Nianxijie Office .
Value of Goods Donated to Benevolence House by SEVEN-ELEVEN (CHENGDU)
|1,937 yuan||1,826 yuan||1,992 yuan|
A visit to Benevolence House
Creating Fulfilling Workplaces
In continuing to expand our network of stores in China, it is essential that we hire and train local employees. The three companies are focused therefore on raising the communication abilities of employees and train them to be able to think and act with autonomy. To this end, the three companies are working to provide various training seminars and create workplaces where employees are able to demonstrate their abilities to the fullest.
Employee-Related Data (FY2018)
|SEVEN-ELEVEN (BEIJING)||SEVEN-ELEVEN (TIANJIN)||SEVEN-ELEVEN (CHENGDU)|
|Full-time employees (Men/Women)||551（290/261）||237（82/155）||281（114/167）|
|Percentage of employees with disabilities||2.24%||2.53%||3.20%|
|Percentage of non-executive female managers||60.3%||58.9%||65.9％|
Supporting development of employee abilities
Operations Field Consultants (OFC) play an important role in connecting the Head Office with franchise store owners. They serve as store management consultants that provide multifaceted advice to franchise stores on overall management, including ordering, product lineups, and employee training. OFC candidates first gain store experience at training stores and learn the fundamentals of store management, which include the Four Basic Principles; unit control; employing, training, assigning and evaluating staff; and management indicators. SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN) are focused on enhancing training of AFC (OFC assistant) candidates and AFCs. At SEVEN-ELEVEN (TIANJIN), AFC candidates selected from among employees working at the store receive training that provides knowledge about OFC duties and enhances managerial skills. They accompany veteran OFCs during store visits and address store improvement issues. At the conclusion of the training, the candidates give presentations on proposals for store improvement and earn their AFC qualifications. SEVEN-ELEVEN (BEIJING) has enhanced OJT by having AFCs accompany OFCs around stores and deepen their knowledge of OFC tasks. It has also adopted training for learning about related divisions such as the product department, construction, human resources, and so on.
At weekly meetings of OFCs, company policies are shared and training is conducted to enhance work skills such as communicating effectively with franchise stores. SEVEN-ELEVEN (CHENGDU) conducts training of Head Office employees on corporate structures, laws and approaches regarding operations, business etiquette, PC operation, and other topics.
Systems to Raise Employee Motivation
Various initiatives are implemented to provide opportunities to raise employee motivation and resolve issues they may face in the workplace. In addition, SEVEN-ELEVEN (TIANJIN) has instituted internal hiring programs that allow employees to apply for desired positions. They are selected on the basis of interviews between the applicants and the relevant Head Office divisions, the Human Resources Department, and so forth. In the fiscal year ended February 28, 2019, three employees applied and one was transferred to requested divisions. SEVEN-ELEVEN (BEIJING) gathers opinions from employees and has established structures for conducting interviews when renewing employment contracts and when employees separate from the company in order to make improvements. The Company conducted surveys on company benefits in the fiscal year ended February 28, 2019 and is used the results to reform the system. In addition, SEVEN-ELEVEN (CHENGDU) has adopted outdoor activities to cultivate employees’ desire to improve.
Examples of systems for raising employee motivation
- Operate a contact desk so that employees can consult with the company on issues
- Interviews with employees by personnel departments
- Interviews with new employees by supervisors
- Organize employee get-togethers to promote closer interaction and socializing among employees
- Conduct questionnaires on motivation
- Share information about role models among employees by conferring awards upon talented employees
Evaluation and Remuneration
The three companies have adopted an employee evaluation system that combines monthly interview evaluations and yearly evaluations. Monthly interviews are conducted between employees and their direct supervisors to discuss the rate of progress toward their performance goals. After self-assessments are carried out by each employee, yearly interviews and evaluations are then conducted by the direct supervisor and a secondary, higher-level supervisor. Monthly evaluations are based on company, divisional and individual performance. They are working on improving the evaluation system, with SEVEN-ELEVEN (BEIJING) working with external vendors to review the skill items necessary for each job, for example. Moreover, the frequency of interviews was changed from once a year to quarterly, and progress is being periodically checked so that annual performance goals can be achieved. In addition, SEVEN-ELEVEN (TIANJIN) added the achievement status of action plans to its evaluation items in an effort to have each employee be conscious about results when engaged in their work.
For managers who perform evaluations, regular training is carried out on matters such as monthly evaluation methods for subordinates and on determining pay in accordance with these evaluations. The training enables managers to obtain the correct knowledge on these matters.
Promoting the Advancement of Women
In China, the labor contract laws have been designed to provide male and female employees with generous leave related to childbirth and childcare. Moreover, men and women are treated equally, and it is common practice for women to continue working after marriage. This legal system and practice of appointing managers based on ability work together to promote the appointment of women to managerial positions. In 2012, the first Chinese woman director was appointed at SEVEN-ELEVEN (TIANJIN). As of the end of December 2018, women currently occupy approximately half of the non-executive managerial positions at the three companies. In March 2018, SEVEN-ELEVEN (BEIJING) appointed women in the roles of vice president and director, and SEVEN-ELEVEN (TIANJIN) appointed a woman as director.
With the aim of hiring outstanding human resources, hiring local personnel, and promoting the education of youth, SEVEN-ELEVEN (TIANJIN) and SEVEN-ELEVEN (CHENGDU) conduct internships and have been recognized by the government as youth employment intern bases that promote the employment of young people who have graduated from high school. In the fiscal year ended February 28, 2019, SEVEN-ELEVEN (TIANJIN) accepted 30 interns, of which 12 gained employment with the company. SEVEN-ELEVEN (CHENGDU) began accepting interns in May 2017 and has accepted 87, with 29 of those becoming employees at SEVEN-ELEVEN (CHENGDU).
Reducing Environmental Impact
The Chinese government has been putting great emphasis on climate change issues. In Beijing, companies with annual CO2 emissions in excess of 5,000 tons are subject to upper limits on CO2 emissions in each industry as major emitters and must purchase emissions credits for the excess portions. SEVENELEVEN (BEIJING), which subject to this program, saw electricity consumption per store decline in the fiscal year ended February 28, 2019 compared to the previous year, but because overall CO2 emissions increased as a result of an increase in the number of stores, and consequently, the company purchased emissions credits for 7,000 tons. SEVEN-EL EVEN (TIANJIN) and SEVEN-ELEVEN (CHENGDU) also reported higher electricity consumption due to an increase in the number of stores and work days, new installations of equipment for fast food, and so on.
|Number of stores||175||187||219||247||266|
|Electricity consumption (MWh)||19,366||18,122||24,856||25,702||26,537|
|Water Consumption (1,000 m3)||73||75||96||83||85|
|Number of stores||60||70||82||118||155|
|Electricity consumption (MWh)||6,164||5,278||7,027||10,077||14,0814|
|Number of stores||66||60||67||87||77|
|Electricity consumption (MWh)||7,319||7,746||6,031||7,892||11,137|
Energy Conservation Measures at Stores
All three companies have installed LED illumination as interior lighting in all stores and are implementing other measures to reduce electricity consumption, such as installing curtains in walk-in refrigerators to prevent the outflow of cold air, installing energy-saving equipment, and conducting education to raise customer awareness. In the fiscal year ending February 28, 2019, both SEVEN-ELEVEN (TIANJIN) and SEVEN-ELEVEN (CHENGDU) have been taking measures to save energy, with the former installing LED illumination in Chinese steamed bun fixtures, and the latter shifting to energy-saving outdoor equipment.
A curtain installed in a walk-in refrigerator
Environmental Measures at Dedicated Plants
In order to avoid wasting resources, efforts are being made at Beijing Wang-Yang Foods, a dedicated plant of SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN), to utilize unneeded food materials generated by each plant as feedstock for a pig farm. Similarly, the JEANAVICE Factory has a nursery collect residual bread under contract. Both plants use wastewater treatment facilities that clean water to the same or higher standard than government standards to ensure that polluted water is not discharged, collect waste oil, and conduct periodic investigations of smoke emissions from the perspective of preventing atmospheric pollution.
Major Awards and Recognition in the Fiscal Year Ended February 28, 2019
|Recognition or award name||Award Sponsor||Recipient|
|Tianjin City Advanced Foreign Investment Company Award||Tianjin City Bureau of Commerce||SEVEN-ELEVEN (TIANJIN)|
|Most Charitable Company Award||Wuhou District Nianxijie Office||SEVEN-ELEVEN (CHENGDU)|