According to the latest 7-Eleven news, 7-Eleven has announced the closure of 444 convenience stores across North America. This closure represents about 3% of the company’s vast network of more than 13,000 stores in the US, Canada and Mexico.
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According to the latest 7-Eleven news, 7-Eleven has faced a consistent decline in customer visits in North America. Traffic at 7-Eleven stores has been falling since early 2023 and in August 2024, traffic plummeted by 7.3%.
While the overall North American economy remained robust in certain segments among higher-income earners, middle- and lower-income consumers have been more cautious with their spending.
This has directly impacted 7-Eleven sales. Once the most profitable category for convenience stores, cigarette sales have dropped 26% since 2019.
Although sales of alternative nicotine products have increased, they haven’t compensated for the overall loss in this category.
Rising costs due to inflation along with higher interest rates, have weighed heavily on the retailer’s operations, squeezing profit margins further.
The stores identified for closure are underperforming with several facing a steady decline in sales and customer traffic. 7-Eleven has confirmed that these stores no longer align with its growth strategy and hence, are being shut down.
According to Seven & I Holdings, 7-Eleven’s Japanese parent company, the closures are a response to persistent inflation, which has impacted middle- and low-income earners.
These demographic groups, key customers for 7-Eleven, have become more cautious in their spending leading to reduced sales.
According to the latest 7-Eleven news, for six consecutive months, 7-Eleven has experienced declining foot traffic with a sharp 7.3% drop in August alone. This decline in customer visits directly influenced the decision to close these stores.
Cigarette sales have dropped by 26% since 2019. While other nicotine products like Zyn have gained some traction, they haven’t compensated for the sharp fall in traditional cigarette sales.
Due to inflation and economic pressures, customers are cutting back on non-essential purchases and spending more cautiously. As a result, low-margin products and frequent purchases, which typically make up the bulk of 7-Eleven’s revenue, have seen a decline.
While cigarette sales have decreased, 7-Eleven has identified food as the category with the highest growth potential.
According to the latest 7-Eleven news, competitors such as Wawa and Sheetz have invested heavily in their food offerings, earning higher customer satisfaction scores.
In response, 7-Eleven has begun investing more in its food products to drive sales in the US market.
Another factor affecting 7-Eleven’s decision to close stores is the rise of competition from both online and discount retailers.
With customers seeking out lower prices, value stores and e-commerce platforms are attracting more traffic making it harder for convenience stores to maintain their share of the market.
7-Eleven continues to focus on expansion in areas where customer demand for convenience is higher. The chain has reiterated its commitment to open stores in locations where they see potential growth, even as they close underperforming outlets.
This gentle pruning of the chain, as some analysts call it, is aimed at keeping the business efficient and profitable.
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According to the latest 7-Eleven news, 7-Eleven plans to invest more heavily in its food category. The company plans to enhance its offerings by selling popular international food items like milk, bread, egg sandwiches and miso ramen in US stores.
The chain has already begun leveraging data analytics and digital tools to enhance its customer experience and optimize store performance.
By using technology, 7-Eleven plans to stay ahead in the retail innovation game, streamline operations and meet the demands of its customer base.
Rising inflation, higher interest rates, and a weakening employment environment are cited as contributing factors. These issues have resulted in a slowdown in sales at the lower-income level, which makes up a huge portion of 7-Eleven’s customer base.
According to Neil Saunders, a retail industry expert from GlobalData Retail, the closures are a necessary step to maintain the brand’s efficiency and profitability.
Saunders notes that 7-Eleven’s struggle with declining foot traffic and rising food prices coupled with stiff competition from value stores and online retailers has likely prompted the company to rethink its approach.
The store closures come during a takeover offer from Couche-Tard, the parent company of Circle K, which increased its bid to $47.2 billion.
For regular customers of 7-Eleven, the store closures might mean having fewer convenient options for purchasing quick snacks, groceries or everyday essentials. The chain’s focus on expansion in areas could mean better customer experiences in those regions where 7-Eleven continues to grow.
One downside to the closures is the potential impact on employees at the affected locations. While 7-Eleven has not provided specifics on the job losses, it’s clear that hundreds of stores shutting down will inevitably result in layoffs.
The closures also provide an opportunity for competitors like Wawa, Sheetz and Circle K to gain market share. These chains, with higher customer satisfaction ratings and an emphasis on quality food offerings may attract former 7-Eleven customers who are looking for alternative convenience stores.
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