Jack Lee (李傑仁), 28, a computer engineer, often gets off work at about 9 p.m. and usually has a problem finding a place to eat dinner, as most eateries or cafeterias have either sold out or are closed by that time. Recently, however, he discovered that convenience stores have become a viable dining option. “Convenience stores now provide a wide range of ready-to-eat foods as well as proper seating. I can take my time eating there and feel assured of their [food] safety,” Lee says. “Plus, I can easily find them on my way home. In fact, there’s one on the corner just near my house.”
Another fan of the ubiquitous stores is Mike Lai (賴克強), a 35-year-old insurance sales representative. Lai says he often meets potential clients at a coffee shop or other informal setting to discuss insurance policies, but the cost of those meetings can add up. “More convenience stores have set up seating areas and offer freshly ground coffee. They’re similar to a café, but with much lower charges,” Lai says. “I can also buy a newspaper or magazine to read to kill time if my client is late. That’s convenient, in addition to being economical.”
There are more than 9,900 convenience stores registered in Taiwan, which has a land area of 36,193 square kilometers and a population of 23 million, likely making it the country with the world’s highest density of convenience stores per person—about one store per 2,300 people.
Thanks to their widespread presence and operating hours—around the clock, seven days a week—convenience stores have become an important part of everyday life in Taiwan. In addition to buying food, drink and daily goods, customers can make bill payments, drop off or pick up parcels and get digital photo prints at the stores. Many of them also offer automated teller machines, copy or fax machines and tickets for concerts, hotels and trains, while some have even started to offer laundry services. Such stores in Taiwan are brightly lit and spotlessly clean, making them an attractive place to shop and get things done.
Coffee is one of the most popular items sold at 7-Eleven. (Photo Courtesy of President Chain Store Corp.)
One major development is that Taiwan’s top three convenience store chains—7-Eleven, FamilyMart and Hi-Life in that order—are all making fresh and readymade food a high priority in an effort to satisfy consumer demand, a move that goes hand in hand with the in-store dining options Lee and Lai praise.
The local market for dining out has seen substantial growth in the last few years and is worth an estimated NT$300 billion (US$10 billion) a year, says Jonathan Chen (陳裕文), a public relations specialist at 7-Eleven, adding that survey results show that about 20 million people in Taiwan eat out at least once a day, and 80 percent of office workers eat out twice a day. “Most restaurants are limited by specific menus and operating hours, so it’s difficult for them to satisfy the needs of consumers who feel like trying different foods each day and at any time,” Chen says. “That’s our opportunity and competitive edge.” To tap the growing market for eating out, 7-Eleven took up the “food store” concept in 2008, when it began increasing the variety of fresh food sold at its stores, according to Chen.
Single and Hungry
Esther Lin (林翠娟), a manager in the Corporate Communications Department of Taiwan FamilyMart Co., says single adults and married couples without children are more likely to buy readymade foods or eat out to save the trouble of cooking. She cites government statistics that show such people comprise about 30 percent of the total population in Taiwan, making them a significant group of potential customers for the company.
That view is echoed by Mavis Chen (陳姮宇), a manager at Hi-Life International Co.’s Business Planning Office in Taipei. “Nowadays people, especially younger ones, expect their needs to be fulfilled speedily and increasingly opt for quick meals. Also families are becoming smaller and it’s not very economical to cook for just one or two people,” she says. “Convenience stores that offer ready-to-eat dishes … have become a popular option for them.”
FamilyMart launched sales of baked sweet potatoes in 2010 in cooperation with local farmers. The snacks have proven popular and generate some US$6.7 million in annual revenue for the company. (Photo by Chang Su-ching)
Mavis Chen says Hi-Life, which was established in Taiwan in 1989, took the initiative in late 2000 to set aside indoor and outdoor spaces for dining at select outlets located in business and recreation areas. About six years ago, the chain launched a comprehensive remodeling program to install seating in its stores nationwide. In 2010, 7-Eleven and FamilyMart began focusing on the operation of larger premises in order to make room for more seating and other facilities, such as public restrooms, in their stores. All three chains plan to increase their number of larger premises in order to develop such services.
About 90 percent of 7-Eleven’s 4,850 outlets nationwide offer seating, says Jonathan Chen, and roughly 55 percent of its stores are at least 30 pings (99 square meters) in area. The chain was introduced from the United States in 1978 by Uni-President Enterprise Corp., which is headquartered in Tainan, southern Taiwan. 7-Eleven operates under President Chain Store Corp. (PCSC).
FamilyMart, which entered the local market in 1988 and now has about 2,800 stores in Taiwan, has seating areas at 70 percent of its outlets, a figure that translates to about 22,000 seats, according to Lin. The chain aims to boost that number to 30,000 seats at 2,900 stores by the end of this year.
Hi-Life’s 1,290 stores have an average of 24 seats each, Mavis Chen says. The company intends to set up more stores of at least 40 pings (132 square meters) in order to raise that average to 40 seats per store in the coming years.
Food from A to Z
Along with providing areas for on-site dining, the three chains have been active in increasing the selection of food on offer. PCSC has cooperated with a number of local farmers and food companies in recent years, in addition to establishing its own production facilities and a food safety research center. The complete supply chain has enabled the company to offer a wide range of food, Jonathan Chen says, adding that there are nearly 800 fresh and readymade food items at 7-Eleven stores, including main courses, side dishes, desserts and fruit.
FamilyMart currently operates about 2,800 stores in Taiwan and has seating areas at 70 percent of its outlets with an estimated 22,000 seats. The chain is aiming for 30,000 seats at 2,900 stores by the end of this year. (Photo by Chang Su-ching)
The efforts seem to be paying off as 7-Eleven’s food sales have increased for each of the past three years. Among the chain’s most popular items are coffee; fruit; bian dang, or Taiwanese-style boxed lunches that contain rice, an assortment of vegetables and meat; and oden, a Japanese-style boiled dish made from a selection of eggs, daikon radish and other vegetables, tofu and processed fish cakes. Oden sales have jumped 80 percent in the past two years, Jonathan Chen says. PCSC raked in revenue of NT$134.6 billion (US$4.5 billion) in 2012, with sales of fresh and readymade food accounting for approximately 18 percent of that amount, making it the firm’s third-largest source of income behind drinks and non-food goods. The company expects that fresh and readymade food will make up 20 percent of its overall sales by 2015.
Jonathan Chen says that customers tend to stay longer and purchase more food items at the stores with tables and chairs, hence the plan to expand the number of such stores. “In the past, most office workers only bought a bian dang for lunch or dinner. With our increased offerings and promotions, now they’re likely to make additional purchases such as fruit, salad or soup,” Chen says. “Also, the number of visitors to our stores during typical mealtimes has risen by 10 percent annually, partly due to the availability of seating.”
FamilyMart’s Lin says her company has registered an increase of 30 percent in food sales and some 10 percent in overall sales at outlets with seating compared with those without. Fresh and readymade food occupies a 15 percent share of the chain’s total revenue. “The ready-to-eat market has shown consistent growth due to lifestyle and social changes. With their busy schedules, many people don’t mind paying higher food prices for convenience,” Lin says. “To capitalize on these opportunities, we’ve striven to provide more food choices.” FamilyMart’s customers can select from a variety of Chinese-, Japanese- or Western-style readymade food including noodles, dumplings, fried rice, sandwiches, sushi and steamed buns, as well as desserts.
Hi-Life began adding indoor and outdoor seating back in 2000, and now also offers made-to-order food at select outlets. (Photo by Chang Su-ching)
Freshly cut fruit and vegetables fit both grab-and-go and health-conscious consumer trends, Lin says, adding that the chain sells some 6 million packages of cut fruit a year. That helps boost revenue, she says, as one guava, for example, costs about NT$20 (US$0.70) at a typical market, but after being washed, cut into slices and packaged, it can be sold for NT$35 (US$1.20) at a convenience store.
Lin says baked sweet potatoes, an item launched by FamilyMart in late 2010 in partnership with farmers in Tainan, have been selling well. The chain sells about 10 million of them a year, generating NT$200 million (US$6.7 million) in annual sales. The company has recently added fresh juice and soft-serve ice cream to its lineup of snacks.
Fresh Coffee, Bread
“People used to stop by a convenience store to buy drinks, but today an increasing number of them visit to have a meal and consequently their average spending has soared from NT$25 [US$0.80] [just a couple of years ago] to NT$90 [US$3],” Mavis Chen says. Hi-Life works with its suppliers to enhance the flavor, nutritional value and safety of food items, she says. This extends to improving production technologies, in-store food service equipment and logistics systems. The chain bakes bread and offers made-to-order food items at some of its outlets. Sales of readymade food and freshly made bread constitute 20 percent of Hi-Life’s revenue.
Moreover, Mavis Chen says her chain pays attention to décor and interior design to create a dining space with a cozy café ambience. “The establishment of a pleasant dining area has served to boost foot traffic,” she adds. “Now it’s common to see people coming to our stores to read books or talk business over coffee, or kids eating desserts and doing homework after school.”
Freshly baked bread is available at a number of Hi-Life convenience stores. The company has worked to improve in-store food service equipment and training in a bid to boost its sales of fresh and readymade food. (Photo Courtesy of Hi-Life International Co.)
Perhaps the most important factor contributing to the robust development of convenience stores in Taiwan is that operators are quick to respond to what customers want and are constantly on the lookout for ways to make their businesses truly convenient neighborhood stores. “The main function of a convenience store has changed from being like a refrigerator for consumers who largely went for cold drinks, to a kitchen for those who bought food to take back home in order to prepare meals faster and more easily, to a dining table where they can sit down to enjoy meals,” Lin observes. “These transformations have been driven by changing consumer needs.”
Mavis Chen concurs and says that her company strives to think like a customer in its pursuit of innovations. “Convenience stores are so named because they offer convenient products and services to customers,” the Hi-Life manager says. “In Taiwan, they’re becoming a growing mealtime destination as operators provide a great variety of food items and quick service, coupled with the stores’ extensive reach and 24-hour operation. We plan to keep expanding our food program to capitalize on this emerging trend.”
Such moves should suit customer Jack Lee. “What I really care about is convenience. It takes me just a few minutes to choose, microwave and get what I want to eat at a convenience store. The whole process is fast and efficient, and that’s why I say it’s one of my preferred places to eat,” he says.
Write to Kelly Her at kher@mofa.gov.tw