SCOTTSDALE, Ariz. -- A buyer's market: That's how 7-Eleven CEO Joe DePinto defined the current economy, an atmosphere that is keeping the chain on its toes. If it's possible for a chain of 10,000 stores (in North America) to be nimble, 7-Eleven wants to do it.
"We are working hard to hear the customer and change as quickly as they are," DePinto said to a packed crowd of restaurateurs at CSP's Restaurant Leadership Conference this week in Scottsdale, Ariz.
To that end, 7-Eleven has remodeled nearly half its stores to the tune of about $1 billion over the past five years, he said, moving toward earth tones, which are more foodservice-friendly, along with a new coffee bar, cold vault and hot-food equipment. Along with the remodel has come the addition of "more snackable, on-the-go food items," such as chicken tenders and mini tacos.
The results include $2.7 billion in fresh food sales a year and $5 billion in beverage sales.
Speaking to a restaurant group, DePinto could have lorded the quantity of food products the chain sells in a given year over the crowd. And he did provide a number of remarkable statistics: $2.7 billion in fresh food, $5 billion in beverage sales, one million cups of coffee, 100 million fountain drinks.
But his goal wasn't braggadocio; it was clarity and understanding. The expanding foodservice market isn't just about 7-Eleven or convenience stores, or any other retailer or retail channel; it's about an evolutionary change that is affecting all channels and every retailer, and the smart ones are evolving along with it.
"Since 2008, we have seen consumer behavior change," he said. "Customers are looking for better value, better quality. … They're expectations are going up."
At the same time, consumers have changed their eating habits, moving from three meals a day to four or five, looking for snacks to consume throughout the day.
"Our economy has shifted from a sellers' market where we could produce a product, charge what we feel was fair for it and the consumer would pay it," DePinto said, "to a buyers' market where they can dictate what they buy and how they pay for it."
DePinto, whose Dallas-based 7-Eleven is the largest convenience-store chain in North America and part of the largest chain in the world, name checked Walgreens, Whole Foods, Walmart and Dollar General as retail chains from various channels that are encroaching on traditional foodservice and grab-and-go retailers.
"Things have changed and channels have blurred," he said. "We believe the center of the battleground between retailers, restaurants and others will be food and beverages."
Why the change? It's a matter of the economy, and also of how consumers shop today. Many are content to make purchases via the Internet, with the products delivered to the consumer's door. While that's stolen the thunder in electronics, clothing and other categories, ready-to-eat remains a brick-and-mortar business.
"As more shopping is moving online, retailers are flocking to areas that are defendable from [online shopping]," DePinto said. "It's difficult for an e-retailer to sell a hot morning cup of coffee, or a fresh breakfast sandwich, or, in our case, a Slurpee."
For 7-Eleven, the goal is clear: See where the consumer is headed and aim to arrive there are the same time.
"We truly are becoming a destination for 'snackables,' " he said. And for the restaurant audience, it was clear, "snackables" equal a meal.
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