7-Eleven Adding Stores
Published in CSP Daily News
Chicago, Boston, LA targeted for growth
CHICAGO -- 7-Eleven Inc. spokesperson Margaret Chabris told CSP Daily News that the company hopes to open 100 new convenience stores in the United States this year and 100 in the Chicago area over the next several years.
According to a report in the Daily Herald, the increase from 180 stores in Chicago over the next two to three years is part of a national strategy to target Chicago, Boston and Los Angeles for major market expansions.
The company also is channeling $350 million to $400 million a year into renovations and new stores, [image-nocss] the report added. We're trying to concentrate our efforts into certain markets, including Chicago, CEO Jim Keyes told the newspaper.
Fueling the expansion will be an overhaul of 7-Eleven's foodservice; a widening of services such as Western Union transfer kiosks; and a newly updated inventory system, said the report.
7-Eleven is adding stores to downtown buildings, while continuing to build standalone stores in the suburbs.
In the United States and Canada, Dallas-based 7-Eleven has about 5,800 c-stores, while it operates, franchises or licenses 26,000 stores worldwide.
On the fast food front, test marketing with more fresh foods in Austin, Texas, resulted in a doubling of daily food sales, Michael Coleman, an analyst for Southwest Securities, Dallas, told the Daily Herald.
Yet it is the inventory technology that most impresses Ken Patel, who owns 7-Eleven stores in Addison, Itasca and Tinley Park, Ill. At 26 years old, he is the youngest multiple-franchise owner in the country, the report said. Born in India, Patel immigrated at 16 and bought his first 7-Eleven at 22 years old.
It's really awesome, all this technology, Patel said. It will help us keep inventory low and turn as much as we can.
Patel said he is preparing for the foodservice changes at 7-Eleven. Yet he'll still sell what the customer asks for the most these days. We want to be the fast-food store of the neighborhood, he said; however, Right now, our most popular item is Marlboro Light.
Keyes did not estimate how many owners are immigrants, but he said 7-Eleven continues to be a good port of entry for entrepreneurs. An initial investment of $50,000 to $100,000 will pay for a franchise fee and initial stock. The average 7-Eleven posts about $1.2 million in annual sales, Keyes said. The 35% average profit is then split 50/50 between the chain and the operator, franchisee or licensee. From that split, the 7-Eleven store pays its expenses, such as labor; however, c-stores are competing with a wider variety of venues, from gas stations to Wal-Mart and Walgreens.