LONG ISLAND, NY — The parent company of 7-Eleven recently announced plans to close more than 400 stores in North America.
The stores — 444 in all — are underperforming, according to an earnings report released Thursday by Seven & i Holdings Co., the Japanese company that owns the massive convenience store chain.
The company cited changing market dynamics in cigarettes, a 16% increase in delivery due to online sales and higher prices from inflation putting pressure on consumers' finances as reasons for the poor performance of some stores.
Regional tobacco flavor bans in California and Massachusetts have led to illegal cigarette sales and a 26 percent decrease in tobacco use since 2019, the company said.
The firm said 62 per cent of consumers were living paycheck to paycheck and another 34 per cent had seen reductions in government-provided food benefits.
The locations of the underperforming stores to be closed were not disclosed. The convenience store chain is the largest worldwide, with 9,000 stores in the United States alone.
The company expects a $30 million operating income benefit from closing the unprofitable stores and believes 7-Eleven is well-positioned to navigate the unique economic environment because its loyalty rewards program continues to grow. There are 97 million registered users, 9.5% of which are high frequency users.
The company believes the way to continue to grow its loyal customer base is to offer in-store baked goods, a self-service roll grill, plate holders and specialty beverages.
“The pullback in consumer spending continued beyond previous expectations,” according to Seven & i Holdings' financial results ended Aug. 31. “In-store traffic and sales growth were impacted as consumers consolidate trips and reduce shopping opportunities.”
By adapting to structural changes from changes in the nicotine sector and preference for delivery and through execution of strategic priorities, the company believes the 7-Eleven business will return to growth in 2025 and beyond.
“7-Eleven International LLC plans to establish a store network of 50,000 stores outside of Japan and North America by the fiscal year ending December 31, 2025, and to expand our presence in 30 countries and regions, including Japan and North America through the fiscal year ended December 31, 2030.”
