Even the world’s largest convenience store chain sometimes needs to change its game plan. Right now, 7-Eleven is looking to beef up its business model…
And they’re getting a little help from their friends over in Japan.
7-Eleven Revamp
When 7-Eleven first opened way back in 1927, the company was owned and operated in the U.S.
But after it went bankrupt for the second time in 1990, a majority stake was bought by a Japanese supermarket chain, Ito-Yokado…
And later the company became known as Seven and I Holdings.
But since 7-Eleven first opened nearly 100 years ago, it quickly became the world’s largest convenience store chain…
WITH OVER 84,000 LOCATIONS WORLDWIDE AND 13,000 LOCATIONS IN THE UNITED STATES
In the states, the convenience store makes most of their revenue selling gas and cigarettes..
But the company is quickly shifting away from that model.
With declining sales in both those categories, 7-Eleven is trying to restructure how it makes most of its money…
And its big bet is serving fresh food within its stores. After all, demand for food is never going to wane.
IN 2023, THE COMPANY SOLD $17 BILLION WORTH OF FRESH FOOD IN STORES
That’s about 24% of the company’s overall sales. Now, the company wants to make that number even bigger.
There’s one problem, however, 7-Eleven has a not-so-shiny reputation in the U.S…
Usually, people will just go into a gas station convenience store because they need to be there, not out of a huge urge or desire. And we’ve all heard bad stories about gas station sandwiches once before…
As the company moves into fresh food to make up more of its sales, it’s looking to emulate its counterparts in Japan…
Not only in terms of the items they provide but also to make convenience stores cool again.
Japanese Convenience Stores
As mentioned above, 7-Eleven doesn’t have a great reputation in the States…
But in Japan, it’s a completely different story.
In Japan, this brand is known for having fresh food with an elevated quality…
Meals in partnership with famous restaurants…
And a better selection of outstanding items.
In fact, these Japanese convenience stores are heavily sought after by tourists because of their selection…
Drumming up excitement from shoppers all over the world.
SO WHAT MAKES THESE STORES DIFFERENT FROM THEIR FELLOWS IN THE U.S.?
In Japan, 7-Elevnens are focused on providing ultra-localized offerings in their stores…
Making sure they have an array of national and local goods.
But it doesn’t stop there. These convenience stores are incredibly data-driven. With this data, each store can decide exactly what to stock to make sure it sells out. Inventory decisions for fresh food and all other items are determined by:
- Store demographics (ages of purchasers)
- Time of day
- Weather patterns
Japanese 7-Elevens also get shipments to their stores multiple times per day, which allows them to keep up with surges in particular items.
This is the recipe that the Japanese convenience stores use to guarantee fresh food and quality at all times of the day. So what are the American counterparts doing to catch up?
How American 7-Eleven Stores Are Closing The Quality Gap
7-Elevens at home are trying to incorporate the same playbook that made the Japanese stores so successful.
But they’ve got their work cut out for them.
The American branches of the company are trailing way behind. Most stores in the states have a national array of items, but a lot of their selections don’t sell.
MOST STORES REPORTED THAT APPROXIMATELY 40% OF THEIR INVENTORY SELLS LESS THAN ONE UNIT PER MONTH.
But thankfully for the company, the American branches of 7-Eleven also have access to huge amounts of data to inform their buying decisions. Not only is every transaction at the stores recorded to better anticipate what items are more popular than others…
But the company’s loyalty program has over 95 million users, meaning that getting more in-depth consumer data is a breeze.
As for the company’s food selection, the brand is teaming up with Japanese company, Warabeya…
To upgrade the factories where they make their food, giving them more bandwidth for delivering higher quality fresh foods…
To get them up to the same level as their Japanese counterparts.
Conclusion
Ultimately, this company-wide revamp will ideally change the way we view convenience stores in the States.
But there’s going to be pushback…
Especially considering how a lot of companies are fighting for the attention and dollars of American diners.
Once again, the American 7-Eleven stores still have a lot of catching up to do…
But only time will tell if these new initiatives will make consumers look forward to getting lunch at the convenience store.
Be Great,
GCTV Staff
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