New Strategy Spells U.S. Expansion for 7-Eleven

Greg Lindenberg, Editor, CSP

Aaron Jourden, Managing Editor

7-Eleven store

TOKYO -- Striving to reach a new goal of 10,000 stores in North America, 7-Eleven Inc. will add 1,100 locations through its fiscal 2019, according to a Wall Street Journal report.

Ryuichi Isaka, president of 7-Eleven’s Tokyo-based parent company Seven & i Holdings Co. Ltd. (SEI), revealed the plan in an overdue update to his “100-day plan” following his succession to president after the resignation of longtime leader Toshifumi Suzuki amid a board shakeup.

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Accelerating acquisitions

7-Eleven store

“We will speed up expansion in North America by accelerating acquisitions,” Isaka, said at a news conference Thursday to announce the plan, the Journal reported.

As reported in a McLane/CSP Daily News Flash, SEI plans to increase its store count in North America to 10,000 by fiscal 2019, said the report. At the end of June, it had nearly 8,900 stores in the United States and Canada.

A previously announced plan for long-term domestic expansion had called for up to as many as 20,000 stores within several years.

'From quantity to quality'

1990s gas station

Because the major oil companies divested most of their retail outlets in the United States, which led to an ongoing restructuring of the convenience-store industry by “dedicated” c-store companies, SEI “adopted more stringent standards for opening new stores in 2012,” the company said in its three-year plan.

This shifted the company’s strategy “from quantity to quality,” it said.

Since that time, “through organizational reinforcement, along with the effect of expanding the opening of new stores in urban areas where there are high sales of fast foods, SEI has established a management framework that enables the expansion of new store openings while maintaining quality,” the company said.

Accelerating acquisitions is expected to help speed up the planned growth. 7-Eleven most recently closed on a deal to purchase 79 convenience stores in California and Wyoming from San Antonio-based CST Brands Inc., which in turn is being acquired by Alimentation Couche-Tard Inc., Laval, Quebec.

Fresh refresh

Japanese food

SEI will also introduce Japanese-style fresh food in the United States, the company said, implementing a model whereby customers can purchase cooked foods from snack counters.

“We aim to achieve higher averages of daily sales by strengthening the product supply infrastructure,” SEI said in the three-year plan. It will achieve this goal “by building on the capital investment in Prime Deli Corp. in Texas, a product supplier to SEI by Warabeya Nichiyo Holdings Co. Ltd., the largest supplier of nakashoku, ready-made meals usually purchased in-store and taken home in our [Japanese] convenience-store business.”

Seven & i previously indicated that it planned to add burritos and Mediterranean pastas as part of its U.S. fresh-food initiative.

“We are excited about our continued growth opportunities in the U.S.,” 7-Eleven spokesperson Stephanie Shaw said in a statement provided to CSP Daily News. “We believe 7-Eleven Japan runs some of the best stores in the world, and we consistently look to them for inspiration. This is especially true with our fresh foods as we continue to innovate our offerings to meet our customers changing needs.”

Divesting department stores

Ito Yokado

Meanwhile, at the urging of activist billionaire investor Dan Loeb, SEI will divest struggling department stores and set up a real-estate arm in Japan as it seeks to improve profit generated mostly by its domestic convenience stores, said a separate Bloomberg report.

Japan’s first 7-Eleven convenience store, operated by Seven-Eleven Japan Co. Ltd., opened in 1974. In 1991, the Japanese company then known as Ito-Yokado acquired The Southland Corp, Dallas, the U.S. operator of 7-Eleven stores. Today, the global 7-Eleven business is fully owned by Seven & i, with approximately 60,000 convenience stores in 17 countries.

Based in Irving, Texas, 7‑Eleven operates, franchises and licenses approximately 59,800 7‑Eleven c-stores in 17 countries.