7-Eleven targeting the elderly

Business Asia, March 17, 2000

Seven-Eleven Japan, Japan's biggest convenience-store chain, said it will start delivering meals and other products to the elderly -- the company's latest move to use its 8200 stores to expand into new businesses.

Seven-Eleven will own 60 per cent of a new venture, called Seven Meal Service, that will help the elderly use computers to place orders.

Hospital administrative services provider Nichii Gakkan will own 30 per cent, and electronics maker NEC and trading company Mitsui 5 per cent each. Catering to the aging is a growth market in Japan, which has a high life-expectancy rate and a larger proportion of old people than many other developed countries.

Seven-Eleven also hopes to take advantage of a new Japanese law that will boost government subsidies for care of the elderly.

"It's very easy to understand the demand," said Ken Kudo, president of Seven-Eleven Japan. He said 20 million people in Japan will be 65 or older this year, almost a sixth of the population.

The venture continues Seven-Eleven's efforts to capitalise on its close-to-everyone location. The company's stores have long served as utility bill payment centres, for example.

It earlier this month agreed to use its stores as pick-up sites for computer games ordered through Sony Corp's Internet page and is establishing other ties to Web-based businesses.

In addition, Ito-Yokado, Seven-Eleven's parent company and Japan's largest supermarket company, plans to install automated teller machines in Seven-Eleven and other stores.

"We want to offer a system that fits easily into people's daily lives," Kudo said.

Seven Meal Service will begin at 250 Seven-Eleven stores in the Tokyo metropolitan area in July and will be expanded to other areas within two years.

The venture expects revenue of 16 billion yen the first year and 70 billion yen a year in three years.

-- Bloomberg