There is much uncertainty for c-store giant 7-Eleven and its Tokyo-based parent company, Seven & i, on multiple fronts right now.
In a wide-ranging press briefing at Seven & i headquarters with select media outlets Friday, incoming Seven & i Holdings CEO Stephen Dacus discussed uncertainty around the consumer impact of tariffs announced by the Trump administration, plans for a North American IPO and, if that happens, increased investments in the company’s U.S. c-stores.
All of this is playing out, of course, amid the looming takeover plan proposed by Circle K owner, Alimentation Couche-Tard of Laval, Quebec.
“My assumption is that we are going to be facing a somewhat more challenging retail environment,” Dacus said, as reported by The Wall Street Journal and other media outlets.
Dacus, who officially takes the CEO post from Ryuichi Isaka on May 27, becomes the company’s first foreign-born chief executive. He is fluent in Japanese and English, and worked night shifts at 7-Eleven when his father was a franchisee, according to a profile of Dacus in The New York Times. Dacus previously headed the special committee tasked with evaluating the Couche-Tard takeover bid.
- 7-Eleven is No. 1 on CSP’s 2024 Top 202 ranking of U.S. c-store chains by store count. Alimentation Couche-Tard is No. 2.
Here are some of Dacus’ comments on the business, compiled from reports from Friday’s news briefing:
If consumers are pressured by tariffs, Seven & i will be forced to cut costs. “In that environment, you need to look harder at your supply chain, you need to make sure you squeeze your costs really tightly, so you have really good control of it,” Dacus said, according to Reuters.
The influx of tariffs are, however, prompting a global supply chain review. “We don’t have a global supply strategy, even though we may have the same suppliers around the world for many things. As a consequence, we’re missing an opportunity,” Dacus said, according to Bloomberg.
Not surprisingly, he was mum on the status of the Couche-Tard negotiations. “My appointment as CEO had nothing to do with the takeover offer,” Dacus said, according to Reuters. “We don’t talk about Couche-Tard among the management team because there’s nothing we can do about it.” But, he added, “The process is moving forward very constructively,” according to The Associated Press.
A North American initial public offering is still coming. Dacus said 7-Eleven is slated to go public in the second half of next year, but it could be delayed due to market conditions. “The initial public offering gives us the financial flexibility to invest a bit more aggressively in our stores,” he said, per Reuters.
Expect a lot more 7-Eleven fast food, if the IPO happens. Money raised by the IPO would fuel the growth of quick-service outlets inside the c-stores, Dacus said. The chain currently has about 1,000 convenience stores with restaurants such as Laredo Taco Company and Raise the Roost Chicken and Biscuits, all of them outperforming locations without restaurants. “We would like to expand that as rapidly as we can,” Dacus said, according to Bloomberg, adding that at least another 1,200 c-stores could add fast-food restaurants.
The path to Seven & i’s success lies in value and convenience amid ongoing consumer uncertainty. “Even if they have less money, they still have basic needs,” Dacus said, according to the Dow Jones Newswire. “They still have a choice of where to go. If you can make sure that you are the first choice, you’re still going to do just fine, even if the economy goes down.”
Seven & i, which operates more than 13,000 convenience stores in North America, in releasing its fiscal year earnings report earlier this month, also said it was expecting a “challenging” consumer environment ahead. Same-store sales at Irving-Texas-based 7-Eleven fell 2.7% during fiscal 2024, and the company predicts a same-store sales decline of 1.5% for this fiscal year.
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