The Father of Japan’s Conbini Was Right to Ignore His Critics

Japan’s conbinis are much loved; It’s a lifeline for the country’s overworked parents and hungry wage earners, as well as a must-see experience for tourists.

But they weren’t always so welcome. In the decades since the first store opened in 1974, nearly 60,000 convenience stores have now been accused of a variety of crimes: crushing mom-and-pop stores, contributing to the decline of the countryside, and accelerating the problem of loneliness. According to critics, these are “strangely cold and hostile places” that are destroying shotengai, Japan’s traditional, more friendly shopping streets.

Toshifumi Suzuki, who died last week at the age of 93, was known as the “father of conbini”. He brought the 7-Eleven chain to Japan, radically overhauled the concept to local tastes, and then re-exported the model overseas. His success was due to knowing when to ignore criticism. And his death not only invites a second look at the legitimacy of those complaints, but also, amid parent company Seven & i Holdings Co.’s ongoing struggles, a reminder of the virtues of an unconventional approach.

“Looking back now, I was going against everything I did,” Suzuki said, explaining his philosophy in a 2019 interview. “When I proposed something and people were against it, I thought: This is worth doing, this will be successful.”

Suzuki had to overcome internal opposition to even get 7-Eleven off its feet. He was first introduced to the convenience store concept in the United States in the late 1960s as an executive at Ito-Yokado Co., which would become the “i” in Seven & i. His insistence that it would work in Japan ran counter to the belief at the time, shared by the company president, that Japan’s small-retailer-focused distribution system was ill-suited to a model that required scale.

Suzuki overcame this opposition. But he also had to adapt the model and transform the market into conbini. He did this by relentlessly focusing on quality, accessibility and convenience, which he says are crucial for such small stores. Under his leadership, 7-Eleven became the place where Japanese do it all, from financial services when stores added bill payment in 1987 and ATMs in 2001, to caffeination, where more 7-Elevens in Japan serve coffee than Starbucks’ U.S. locations.

Their innovation extends beyond the store. He changed the way Japanese people eat by not only making conbini dishes taste good, but also by introducing onigiri rice balls in 1978. Until then considered a home-cooked food for farmers on trips or in the field, it has now become an iconic staple of nutrition; 7-Eleven alone replaces more than 2.1 billion products each year.

Suzuki said its chain of stores is the first in the world where individual owners place orders in response to customers’ needs, rather than having headquarters allocate stock. And since his departure in 2016, the industry is still searching for the next big hit; Obviously, the English version of the chain’s history page also ends in the same year.

The final chapter of Suzuki’s life was no less dramatic; He was ousted in a boardroom fight backed by activist investor Dan Loeb. The American accused Suzuki of planning to appoint his son as his successor, which the then-CEO denied. Conventional wisdom viewed his dethronement as a victory for corporate governance reform, and it was hailed by one investor as “the day Japan was saved”.

But since his departure, Seven&i has appeared strategically indecisive, trapped by activist investors and takeover bids. He eventually complied with most of Loeb’s demands, increasing dividends and divesting most of his non-conbini assets. A decade later, the Nikkei 225 had more than quadrupled in value, while Seven & i’s shares were up less than a fifth. Manager Ryuichi Isaka, who Loeb supported when Suzuki wanted to oust him, was deposed last year.

None of this means that Suzuki is always right, or that Japanese companies should be run as monuments to their founders. We don’t know what would have happened if Suzuki had stayed.

But Seven & i’s difficult decade complicates the easy narrative that dismantling Suzuki means modernizing the workplace. This is a reminder that acquired wisdom also deserves examination; that investors and outside managers don’t always know better than builders like Suzuki, who are creating something that makes everyday life better, one onigiri at a time.

Suzuki’s career and the decade since Seven & i show that companies should prioritize thinking outside the box rather than trying to please financiers. “If everyone agrees that something is good, that means everyone can think about it,” Suzuki said. “So it really isn’t worth doing and it won’t be successful.”