In a significant decision, the parent company of 7-Eleven has announced plans to close 444 underperforming stores across the United States. The move is part of a broader strategy to streamline operations and respond to changing consumer habits.
The closures will occur in the final quarter of this year, affecting a small fraction of the chain's extensive network of approximately 13,000 locations in the US and Canada.
7-Eleven Announces Closure of 444 Stores to Address Declining Sales
During a recent earnings call, the company revealed the decision to shut down these stores. However, they have not disclosed which specific locations will be closing their doors.
This decision comes as the company grapples with declining sales and foot traffic, as many consumers are adjusting their spending habits due to rising costs associated with inflation.
The company reported facing challenges as consumer spending decreases, particularly in cigarette sales, which have historically been a strong source of revenue for convenience stores. Since 2019, sales of cigarettes have plummeted by 26%.
Although alternative nicotine products, like Zyn, are gaining popularity, they have not been enough to offset the losses from traditional cigarette sales.
According to Seven & I Holdings, the parent company, there was a 7.3% drop in customer traffic in August, marking the end of six months of continuous declines. The report indicated that many shoppers are feeling the pinch from higher food prices, leading them to buy less and seek out more affordable options, according to CNN.
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7-Eleven Corp. Outlines Growth Strategies, Rebranding Efforts
Retail industry analyst Neil Saunders explained, "The closures of these locations can be attributed to a significant drop in foot traffic and customer numbers."
To better focus on the convenience store market, Seven & i Holdings plans to rebrand itself as "7-Eleven Corp." They will also create a new holding company called York Holdings, which will manage 31 subsidiaries, per USA Today.
This includes various businesses like Loft, a general goods store, Akachan Honpo, a baby goods store, and the operating company for Denny's restaurants in Japan.
The company's reorganization comes at a time when they are seeking to improve investor confidence and demonstrate their growth potential. Recently, they dismissed an acquisition offer from Alimentation Couche-Tard, the operator of Circle K, claiming it did not adequately reflect the company's worth.
Despite the challenges, 7-Eleven is looking to the future. They have revealed plans to enhance their food offerings, which have become a major draw for customers. A recent survey showed that rival convenience store chains, like Wawa and Sheetz, received higher customer satisfaction ratings compared to 7-Eleven.
To boost customer interest and sales, 7-Eleven is also focusing on improving its digital and delivery services. They plan to invest in expanding their loyalty program to attract more customers.
The company recognizes that to thrive, they must adapt to the changing preferences of consumers who are increasingly turning to online shopping and discount retailers for better deals.
