DALLAS and LOMBARD, Ill. -- After 7-Eleven Inc. announced it would acquire more than 200 White Hen Pantry stores in the Chicago and Boston markets, franchisees of both franchise-driven companies were cautiously optimistic about the transaction, valued at $35 million.
It's a good deal for 7-Eleven, Tariq Khan, chairman of the National Coalition of Associations of 7-Eleven Franchisees, Rockville Centre, N.Y., told CSP Daily News. I'm sure the franchisees in White Hen would be concerned if someone else had bought the company. If I'm a White Hen franchisee, [image-nocss] with as many changes they've gone through in past few years, they should be very comfortable in the 7-Eleven system. It's a win-win for both sides.
White Hen franchisee Terry Anderson agreed, assuming the right changes are made. I would hope that the change would improve the way in which product is purchased and distributed, Anderson, who operates one White Hen store in Glenview, Ill., told CSP Daily News. With a large corporation like 7-Eleven, hopefully that will make that happen.
The transaction makes perfect sense for 7-Eleven, which is stretching into high-traffic urban areas, such as downtown Chicago, according to Khan, whose coalition represents more than 2,500 members with more than 3,000 7-Eleven stores. Other urban centers with dense downtown populations Boston, Los Angeles and Philadelphia among them may be next on the company's short list of expansion targets.
While 7-Eleven president Joe DePinto said that change is a part of any significant transaction, it's unclear where the acquisition leaves White Hen's popular foodservice offer, which consists of made-to-order foods and fresh-delivered goods provided by local commissaries, or the White Hen name itself.
I really think 7-Eleven will take those [White Hen] stores and convert them into our fresh-foods system, said Khan. 7-Eleven is very committed with its commissary and central distribution, but maybe they will learn something from White Hen Pantry. White Hen stores do have a very good fresh-food program, but it's a lot different from what we have.
Anderson said she hopes the new owner will be encouraged to increase White Hen's fresh-food offering. Hopefully we will be able to continue into the freshness mode, especially since I have a really strong catering following, she said, adding that she'd also encourage store renovations. The current design of the old White Hen does not lend itself to the self-service, new-age convenience store model. There's [about] 200 stores out there that have a design from 40 years ago. So hopefully, a big company will come in and say, This is the way we want to get it done,' because grab-and-go is definitely the way the public is moving in terms of prepared food.
John Matthews, meanwhile, said he would be surprised to see 7-Eleven blunt the brand power of White Hen in the Chicago area. He's intimately familiar with White Hen, having served the chain as vice president of marketing, corporate communications, facilities and real estate when it was part of Clark Retail Enterprises. He now runs Gray Cat Enterprises, a strategic planning and marketing consultancy based in North Barrington, Ill.
There's a lot of heritage in White Hen, he told CSP Daily News. The majority of the stores are in one metropolitan area, so 7-Eleven now dominates this marketplace. [7-Eleven is] buying that heritage, they're buying 40 years of brand equity, and they're buying its foodservice expertise. Everybody knows White Hen, and it has great brand recognition. To not utilize that power would seem like a lost opportunity. Part of the purchase price is the brand equity.
A Chicago Tribune report suggested 7-Eleven might use the White Hen name to brand its fresh-food offerings, similar to the way in which BP PLC uses the Amoco name to brand its premium gasoline.
And Anderson compared the question of the whether the White Hen brand will remain on the Chicago stores to Macy's recent rebranding of Marshall Field's department stores in the Chicago market. They didn't see a value in [the brand name], she said. Ultimately, however, Anderson said, I would like to keep the White Hen name.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.