Chinese Convenience Store Business

Providing Safe and Reliable Products

In China, where concerns over food safety and reliability 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.

3 GOOD HEALTH AND WELL-BEING

Product Quality Management

For the Group's private-brand products in China, strict standards are applied in selecting ingredients, and processing factories 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 factories producing only the Group's private-brand products by incorporating international food safety management systems and measures implemented at factories in Japan. Beijing Wang-Yang Foods and JEANAVICE factories, which are food manufacturing factories of SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN), obtained the "SC" food production license for chilled foods in January 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 factories acquired HACCP※1 certification in March 2017, while Beijing Wang-Yang Foods acquired it in March 2018. SEVEN-ELEVEN (CHENGDU) also requests its business partners to meet its own standards which are even more stringent than domestic laws and regulations. At the same time, it regularly conducts workshops regarding quality management for its store employees, striving to ensure safety and reliability.
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. In 2020, we enhanced our cooking facilities to improve quality and continue to provide new, never-seen-before products. Beijing Wang-Yang Foods has been introducing more machines at its factory dedicated to stuffed bread, which began full-scale operations in March 2019, with a focus on the bread production process and product wrapping. Chengdu Food Limited Company that supplies bread and sandwiches to SEVEN-ELEVEN (CHENGDU), mechanized the production process and product packaging for bread and sandwich bread in 2020, and is committed to continued improvements in quality.
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), SEVEN-ELEVEN (TIANJIN), and SEVEN-ELEVEN (CHENGDU). 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 daily food products. SEVEN-ELEVEN (BEIJING) plans to start displaying calories on sandwiches and salads in the second half of FY2021. Further, we plan to release salads using plant meat.
Furthermore, SEVEN-ELEVEN (TIANJIN) sells products such as boxed lunches including cereal rice and salads using abundant amounts of vegetables under the theme of health from the second half of FY2020.

Improving Customer Satisfaction

SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN), and SEVEN-ELEVEN (CHENGDU) 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. Further, SEVEN-ELEVEN (TIANJIN) held a product exhibition in September 2019. At the exhibition, food tasting of new products and questionnaire surveys on future needs and so on were conducted to use for product development.
The three companies have been conducting training to further improve the customer service provided by employees. In FY 2019, SEVEN-ELEVEN (BEIJING) conducted customer service education targeting night-time responsible person at all stores, with local managers as instructors. In the same fiscal year, SEVEN-ELEVEN (TIANJIN) conducted training 10 times, with 72 participants from 41 stores learning about the importance of customer service, dealing with customers at cash registers, and other issues based on actual cases studies. Employees who passed the test were also given "Customer Service Star" badges. Since FY2020, SEVEN-ELEVEN (CHENGDU) has adopted a training program to improve the level of customer service. Trainers visit stores and evaluate employees' customer service levels and FF(Fast Food) sales response levels (with scores from 0 to 100), among other things, and stores with issues undergo focused training. In addition, improvement is being sought through implementation of TTT (Training the Trainer) sessions and through the entire cycle of providing feedback on evaluation and information sharing. In particular by setting a training manager for each individual store and sharing examples of excellent stores and methods of in-store education through the TTT sessions held on a monthly basis, in FY2020, the level of customer service at the time of check out at all stores improved, and fast food sales increased. At the end of 2020, we presented awards to five individuals who demonstrated excellent customer service, and to three outstanding stores.
In addition, 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.

A TTT session at SEVEN-ELEVEN (CHENGDU)

Thriving with Local Communities

SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN), and SEVEN-ELEVEN (CHENGDU) each conducts social contribution activities as members of their local communities.

10 REDUCED INEQUALITIES

Environmental Preservation Measures through Storefront Donations

SEVEN-ELEVEN (BEIJING) installed donation 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 FY2018, 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. In FY2019, 50 employees conducted tree planting activities in the suburbs of Beijing, and a total of 100,996 yuan in FY2019 and 49,409.66 yuan in FY2020 was donated.

Donation amounts to Beijing Green Fund
FY2018 FY2019 FY2020
108,974 yuan 100,996 yuan 49,410 yuan

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 29, 2020, volunteer employees visited the facility in December to participate in a fun event, putting on performances and playing games with the children. In addition, the employees provided daily essentials and other presents.

Value of Goods Donated to Benevolence House by SEVEN-ELEVEN (CHENGDU)
FY2018 FY2019 FY2020
1,992 yuan 2,000 yuan 1,990 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. SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN), and SEVEN-ELEVEN (CHENGDU) seek to raise the communication abilities of employees and develop them to be able to think and act by themselves. 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.

5 GENDER EQUALITY
8 DECENT WORK AND ECONOMIC GROWTH
10 REDUCED INEQUALITIES
Employee-Related Data (FY2020)
SEVEN-ELEVEN (BEIJING) SEVEN-ELEVEN (TIANJIN) SEVEN-ELEVEN (CHENGDU)
Full-time employees (Men/Women) 336(169/167) 158(51/107) 168(57/111)
Part-time staff 163 151 111
Percentage of employees with disabilities 3.02% 4.40% 1.43%
Employee-Related Data (FY2019)
SEVEN-ELEVEN (BEIJING) SEVEN-ELEVEN (TIANJIN) SEVEN-ELEVEN (CHENGDU)
Full-time employees (Men/Women) 491(246/245) 208(76/132) 232(85/147)
Part-time staff 774 97 296
Percentage of employees with disabilities 2.40% 2.30% 1.32%

Support for Enhancing the Abilities of Employees

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 of staff; and management indicators. SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN) are focused on enhancing training of AFC (OFC assistant) candidates and AFCs.
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 the product department and related divisions such as construction, human resources, and so on. SEVEN-ELEVEN (BEIJING) conducts training and tests for OFC-related knowledge at the level of store managers at training stores in order to shorten the training period for OFCs. In addition to acquisition of conventional knowledge, role-playing is also incorporated. In response to a management problem presented by the person playing the role of franchise store owner, the store manager in the role of an OFC provides on-site guidance. At the same time, the store manager goes around the store with experienced trainers and gains experience in existing OFC duties.
In FY2019, SEVEN-ELEVEN (TIANJIN) revised the AFC evaluation criteria and introduced a mechanism for quantitative evaluation. The existing qualitative evaluation was changed with clear standards for each evaluation item such as communication skill and evaluation is carried out using scores. Further, since March 2021, each department at the Head Office has been conducting intensive training every week. In order to enrich OFC’s job knowledge, acquisition of knowledge about architecture, finance, products, and operations related to store guidance is ensured. In particular, it educates on how to solve problems and how to respond to franchise store owners who are in special situations. In addition, since the second half of 2020, it has been furthering presentation of issues at store manager meetings. SEVEN-ELEVEN (TIANJIN) aims to improve the ability to analyze, solve, and verify aspects of a problem through presentations on the main theme of unit control. It is promoting education in advance to nurture reliable OFCs who can provide smooth explanations to franchise store owners.
SEVEN-ELEVEN (CHENGDU) started a new training program for store managers in FY2018 to teach skills such as analysis of business figures and computer operations necessary for work. In FY2019, training such as numerical analysis, employment development, and store management was conducted 12 times for 50 store managers. In FY2020, with the decrease in the number of directly managed stores, it shifted the focus of education to the selection of trainees and human resources, introduced the concept of “talent pool,” and focused on the development of talented employees with potential, with the aim of fostering highly skilled OFCs.
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.

Training session

Programs 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) and SEVEN-ELEVEN (CHENGDU) have 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. 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. Various initiatives are implemented to provide opportunities to raise employee motivation and resolve issues they may face in the workplace. For example, SEVEN-ELEVEN (TIANJIN) and SEVEN-ELEVEN (CHENGDU) have 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. 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. Apart from this, it holds gatherings for employees after mandatory retirement to express our gratitude for working for the company for many years, and to express our spirit of “valuing our employees.”

Examples of programs for raising employee motivation

  • Operate a contact desk so that employees can consult with the company on issues
  • Interviews with employees by human resources 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

SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN), and SEVENELEVEN (CHENGDU) 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. In addition, once each year, after self-assessments are carried out by each employee, 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. For managers who conduct evaluation, education is carried out so that they can evaluate subordinates properly and develop human resources.
In order to improve the evaluation system, SEVEN-ELEVEN (BEIJING) worked with external specialists to review the skill items necessary for each job. 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 FY2020, we implemented only annual evaluations and interviews due to the influence of COVID-19. We are conducting interviews focusing on key positions to gain an understanding of the problems faced by our employees, and implementing coordination of operations to meet the demands of the post-corona period.
In addition, at SEVEN-ELEVEN (TIANJIN), from the second half of FY2020, promotion criteria of directly managed stores were improved, written examinations + practical skills + comprehensive evaluation + interviews were conducted, and a system of fair and equal promotion based on score evaluation was realized.
SEVEN-ELEVEN (CHENGDU) changed its company structure and evaluation system in FY2019. Starting from FY2020, managers are evaluated and interviewed every quarter, while non-managers are evaluated monthly.

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 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 December 31, 2018, women currently occupy approximately half of the nonexecutive managerial positions at SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN) and SEVENELEVEN (CHENGDU). 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.

Internships

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 FY2019, SEVEN-ELEVEN (TIANJIN) accepted 63 interns, of which 22 gained employment with the company. SEVEN-ELEVEN (CHENGDU) accepted 138 interns, with 18 of them becoming employees at the company in July 2019.

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. In the fiscal year ended February 29, 2020, SEVEN-ELEVEN (BEIJING), which is subject to this program, saw overall CO2 emissions increased as a result of an increase in the number of stores and chilled cases, and consequently, the company purchased emissions credits for approximately 14,000 tons. SEVEN-ELEVEN (TIANJIN) and SEVEN-ELEVEN (CHENGDU) also reported higher electricity consumption due to an increase in the number of stores, new installations of refrigeration and freezer devices, and so on.

12 RESPONSIBLE CONSUMPTION AND PRODUCTION
13 CLIMATE ACTION
Environment-related Data
SEVEN-ELEVEN (BEIJING)
  FY2016 FY2017 FY2018 FY2019 FY2020
Number of stores 219 247 266 275 283
Electricity consumption(MWh) 24,856 25,702 26,537 29,773 24,251
Water Consumption(1,000m3 96 83 85 94 78
SEVEN-ELEVEN (TIANJIN)
  FY2016 FY2017 FY2018 FY2019 FY2020
Number of stores 82 118 155 178 179
Electricity consumption (MWh) 7,027 10,077 14,814 20,051 17,552
Water Consumption (1,000 m3) 24 34 42 57 49


SEVEN-ELEVEN (CHENGDU)
  FY2016 FY2017 FY2018 FY2019 FY2020
Number of stores 67 87 77 75 73
Electricity consumption (MWh) 6,031 7,892 11,137 9,720 7,631
Water Consumption (1,000 m3) 18 24 25 24 24

Energy Conservation Measures at Stores

All three companies-SEVEN-ELEVEN (BEIJING), SEVEN-ELEVEN (TIANJIN) and SEVENELEVEN (CHENGDU)-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, and conducting education to raise employees’ awareness. In the fiscal year ended February 29, 2020, SEVEN-ELEVEN (CHENGDU) installed LED illumination in Chinese steamed bun fixtures at 35 stores, and also ensures that lights and air conditioning are switched off when they are not needed. Through meetings and product exhibitions for Operations Field Consultants (OFCs), SEVEN-ELEVEN (BEIJING) shares information about being thorough in saving energy with OFCs and franchise store owners.

A curtain installed in a walk-in refrigerator

Environmental Measures at Food Manufacturing Factories

In order to avoid wasting resources, efforts are being made at Beijing Wang-Yang Foods, a food manufacturing factory of SEVEN-ELEVEN (BEIJING) and SEVEN-ELEVEN (TIANJIN), to utilize food loss generated by each factory as feedstock for a pig farm. Similarly, the JEANAVICE Factory has a contract with a fish farm to collect residual bread. Both factories 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.
Furthermore, to save energy, JEANAVICE Factory works to reduce thermal loss from boilers and reduce the consumption of gas.

Initiatives in China