Convenience store operator FamilyMart Co said Thursday it will allow its franchise owners across Japan to shorten operating hours from March in a bid to address a severe labor shortage during late-night hours.

Under the new policy covering nearly 16,000 stores, franchise owners can shut down part of or throughout the window between 11 p.m. and 7 a.m. if they notify the headquarters of their wish in advance.

"It is up to each of our franchise owners to make a decision" to end the 24-hour operations, FamilyMart President Takashi Sawada said at a press conference in Tokyo.

Store owners who want to cut operating hours can also choose to do it every day or only on Sundays, the company said.

Meanwhile, FamilyMart will raise its monthly incentive to 120,000 yen from 100,000 yen for stores that keep their around-the-clock operation.

The move came after rival Seven-Eleven Japan Co started cutting operating hours at eight stores this month as part of efforts to mitigate labor shortage.