Anindita Chatterjee
Nearly 450 7-Eleven stores across North America are set to close, marking a significant shift for the convenience store chain. This move comes as the company grapples with declining sales and changing consumer habits.
Business Decisions Driven by Declining Performance
Seven & I Holdings, the parent company of 7-Eleven based in Japan, disclosed this decision during an earnings report on Thursday. According to the report, 444 stores will cease operations due to a range of factors affecting the business.
- Declining sales, especially of cigarettes
- Decrease in customer traffic
- Rising inflation
Although the news may seem alarming, it’s important to note that these closures represent only 3% of 7-Eleven’s total portfolio, which includes more than 13,000 locations in the U.S., Canada, and Mexico.
Understanding the Impact on Sales
For years, 7-Eleven relied heavily on cigarette sales, which used to be a cornerstone of their business. However, this segment has experienced a 26% decline since 2019. As cigarette sales drop, the company has not seen a substantial increase in sales of other nicotine products.
The declining foot traffic is concerning. 7-Eleven has faced six consecutive months of traffic declines, including a notable 7.3% decrease in August. In their earnings release, Seven & I Holdings noted the complex economic factors at play.
“The North American economy remained robust overall thanks to high-income earners,” the company explained. However, they acknowledged a more cautious approach to spending among middle- and low-income customers.
Focus on Food and Global Expansion
In the wake of these store closures, 7-Eleven is shifting its focus to become a food-centric retailer. This strategy taps into the growing demand for quick-service food options, an area where they have seen increased sales.
7-Eleven aims to innovate its offerings by introducing popular international food items inside U.S. stores. Customers can soon expect to find items like:
- Milk
- Bread
- Egg sandwiches
- Miso ramen
This approach highlights a proactive effort to adapt to changing consumer preferences, especially among a demographic that is now leaning towards convenience-food solutions.
What’s Next for 7-Eleven?
Despite the closures, the company remains optimistic about its future. Seven & I Holdings envisions 7-Eleven becoming a “world-class retail group” by leveraging global growth strategies and technology. They intend to enhance the shopping experience in their locations to keep up with modern retail trends.
The company has not yet released a specific list of the stores that will be closing. However, they continue to monitor store performance to make informed business decisions moving forward.
Conclusion
The announcement of nearly 450 store closures highlights the challenges facing traditional retailers in today’s economy. As 7-Eleven adapts to consumer needs and market conditions, industry watchers will be keen to see how these changes will play out. Will a focus on food and innovation bring back foot traffic to the stores? Only time will tell, but for now, evolving consumer behavior will certainly define the next chapter for this iconic convenience store chain.
For more information on 7-Eleven’s future plans and updates, visit their official site or follow business news outlets for the latest developments
