DALLAS -- Six months after 7-Eleven's parent company, Japanese retail giant Seven & I Holdings Co., announced it would devote more than $2.4 billion to opening 1,000 new stores and refurbishing its entire U.S. network over the next four years, that work is progressing slowly, mainly through the company's Business Conversion Program (BCP).
As of mid-December, 7-Eleven had opened 37 BCP stores with seven more expected to be completed before the end of the year.
The BCP franchise provides many of the benefits of 7-Eleven's standard, [image-nocss] individual-store franchise, but allows an independent convenience-store operator the opportunity to convert his or her existing store to a 7-Eleven franchise.The franchisee continues to own or lease the store site, but 7-Eleven installs proprietary equipment and helps convert the store to a 7-Eleven branded location.
And while Dallas-based 7-Eleven has never used the $2.4 billion figure in discussing its expansion plans, spokesperson Margaret Chabris said that figure likely includes many things well beyond building new stores.
"What that number represents, we believe, is all of the investment Seven & I Holdings is allowing us to complete," she told CSP Daily News. "[It includes] the various levels of upgrades to all of our stores [and] the investment in [BCP] stores."
Seven & I Holdings Co. announced the $2.4 billion investment in late June, with the stated goal of boosting its presence in the world's biggest consumer marketthe United Stateswhere competition is expected to further intensify with the entry of new players such as Britain's Tesco Plc into the convenience sector, according to the Nikkei news service. Seven & I said at the time it aims to lift product sales, including gasoline, by at least 15% from the level of 2006 to 1.2 trillion yen ($10.51 million U.S.), said the Reuters report, citing Nikkei.
Meanwhile, 7-Eleven is continuing its sell off of its more than 1,000 company-operated U.S. stores to franchisees. Much of the sell-off has already happened in the West and the South, Chabris told The Long Island Business News, and eventually the entire North American chain, numbering more than 7,400 stores, will be owned by franchisees.
"The company believes this is the way to go," Chabris told the newspaper. "With a franchise system, you have store operators that have a financial investment in the business, and we find they are usually more involved with their communities."
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