DALLAS -- The growth in urban markets promised by 7-Eleven Inc. officials a year ago may soon become a reality following its parent company's announcement it will devote more than $2.4 billion to opening 1,000 new stores and refurbishing its entire U.S. network over the next four years.
As reported in a CSP Daily News Flash, Japanese retail giant Seven & I Holdings Co., 7-Eleven Inc.'s parent, announced the investment and growth plan yesterday.
Seven & I is trying to boost its presence in the world's biggest consumer marketthe [image-nocss] 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.
The expansion plan will conclude years of restructuring efforts in the United States, during which the retailer focused on transplanting Japanese-style management know-how, according to a report by the ANTARA news service. With its competitiveness up, Seven & I has decided to make one of the largest investments in its history, the report said.
Last summer, shortly after 7-Eleven purchased the White Hen Pantry c-store chain in Chicago and Boston, company officials said more growth was on the way, most likely in urban markets such as Boston, Los Angeles, New York and Philadelphia. [We're] really bullish on growth opportunities, particularly in areaswe're concentrated in, said CEO Joseph DePinto in late August. We will spend a significant amount of time assessing [opportunities] in those parts of the country.
Since then, the company's only growth through acquisition of note was the purchase of 10 stores in Utah. Thus, retailing consultant George Whalin said yesterday's announcement was a long time coming. This has been expected for awhile, Whalin, president of Retail Management Consultants, San Marcos, Calif., told CSP Daily News. I think it's a little surprising that it has taken them so long to get their ducks in a row and get ready to expand this thing.
The Japanese retailer admitted it has not been vigorously investing in its 6,100 U.S. stores in the past couple of years as it was focused on improving the unit's internal organization and systems, a company spokesperson said, according to a Reuters report.
In December, DePinto told Bloomberg that 7-Eleven intends to raise its store count to about 8,000 by 2010. He also predicted that 7-Eleven would eventually have as many as 30,000 stores in the United States and Canada. We see us doing more acquisitions in the short to medium term, DePinto said.
At that time, about 700 7-Eleven stores had been refurbished, with more to come by the end of 2009. Walls and floors are being replaced, and new lighting, wider aisles and hot grills are being fitted, DePinto said.
7-Eleven officials yesterday declined to talk about a story that seems to have come out of Japan.
Under the new expansion plan, Seven & I aims to lift product sales, including gasoline, by at least 15% from the level of 2006 to 1.2 trillion yen, said the Reuters report, citing Nikkei.
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