7-Eleven's Quest for 'World Domination'

Published in CSP Daily News

Huff Post report details retailer's expansion strategy, format adaptability

DALLAS -- Somewhere in the world, every two hours, a new 7-Eleven opens. In 2011, 7-Eleven opened 4,600 stores, bringing the retail brand total to more than 46,000 locations across the globe. That's the most units of any company in the world, 7-Eleven Inc. claims.

In the United States and Canada, 7-Eleven built, acquired or transitioned from another business to the 7-Eleven brand 600 additional stores during 2011. This year, 7-Eleven's goal is to exceed that number by adding at least 630 new stores to its U.S. and Canada roster by yearend, the company recently announced (see Related Content below for previous CSP Daily News coverage).

While other retailers struggle to export their store concept away from home, 7-Eleven has expanded into 16 countries.

Today 7-Eleven is aiming to grow mostly in South Korea, Thailand, the United States and Canada. It opened a total of 3,132 stores in those countries last year, according to Seven & I Holdings Co.'s annual report. In the United States, the chain is targeting urban markets like New York City and Charlotte, N.C., hoping to mimic expansion strategies that served it well in Taipei and Tokyo.

As other American retailers have shuttered stores, 7-Eleven used the recession to acquire real estate on the cheap to fuel its expansion.

7-Eleven "is quietly taking over the world," quipped a Huffington Post Business report detailing the retailer's expansion.

But convenience doesn't mean the same thing everywhere, said the report. In Hong Kong, shoppers snack on fresh pasta at the 7 Cafe and pay their phone bills at the store, nicknamed Chat Jai or Little 7. In Taiwan, locals use the store to pay traffic tickets and utility bills, pump up bicycle tires and send and receive packages. In Japan, shoppers can receive online shopping purchases at their local 7-Eleven, a concept the company is also testing in the United States with Amazon.com.

"Our format is easily adaptable," Dan Porter, vice president of real estate for 7-Eleven Inc., told the web newspaper. "We can open stores with gas [stations] or without gas, urban walkup stores, stores in strip centers. The flexibility gives us a competitive edge."

The localization strategy of 7-Eleven is a good business model, according to Torsten Stocker, a China-based partner at strategy consulting firm Monitor Group. "[7-Eleven] has local partners who understand the environment in their market very well," he told the website. "This allows them to grow very rapidly and at much lower investment."

In the United States, 7-Eleven has yet to reach "market penetration," particularly in urban areas, Porter said.

Last year 7-Eleven acquired 55 new stores in North Carolina, 183 in Florida and 188 in New York.

The company is also persuading owners of other c-stores to become 7-Eleven franchisees through its business conversion program.

To help its franchisees stay on brand, 7-Eleven sends out consultants twice a week, according to Porter. It also issues them a proprietary data-analysis tool, called the Retail Information System, which allows franchisees to track exactly what's selling in close to real time. "We're continually keeping up with and deleting slow-moving products," Porter said.

7-Eleven was one of the first chains in the United States to tap the technology in the mid-1990s, following in the footsteps of its Japanese counterparts. "They are very attuned to changes in daily consumption patterns," Stocker said. "They always have new items in stores, including completely new to market products as well as 'exclusives,' e.g. seasonal drinks or food flavors."

In the United States, 7-Eleven is now promoting a "lite" version of its trademark Slurpee and rolling out new foods like fruit, beef tacos, empanadas and salads.

"Through the downturn in the economy, consumers still want quick, ready-to-eat foods," said Porter. "They want to go to a place where it's going to be clean and they'll find the products that they want."

Click here to read the full Huff Post report And click here to view 7-Eleven's  store development webpage, which includes a list of growth markets.