7-Eleven is closing 444 underperforming stores across North America, representing about three percent of its total locations, as the company navigates declining sales, inflation, and changing consumer behaviour.
The closures come as parent company Seven & I Holdings makes strategic moves to maintain profitability in challenging economic times.
The shuttered stores span the United States, Canada, and Mexico, though a full list of affected locations has not been released.
Economic Challenges Lead to Store Closures
In its latest earnings report, Seven & I Holdings outlined several factors driving its decision to close hundreds of 7-Eleven stores. Among these are inflationary pressures that have squeezed the purchasing power of middle- and low-income consumers, resulting in reduced discretionary spending. High interest rates and a weakening job market have compounded these issues, making it harder for many customers to justify non-essential purchases.
As a result of these trends, the convenience store giant saw a 7.3 percent decline in foot traffic in August alone, marking six consecutive months of falling customer visits. This steady decrease in store traffic has directly impacted sales, contributing to the decision to close underperforming locations as part of a broader optimization strategy.
Image: 7-Eleven Canada
Shifting Consumer Habits and Reduced Tobacco Sales
A challenge for 7-Eleven has been the decline in cigarette sales, a historically strong revenue stream for the company. According to Seven & I’s earnings report, cigarette sales have plummeted by 26 percent since 2019. Although there has been growth in alternative nicotine products, such as Zyn, the rise in these products has not been enough to offset the overall loss in tobacco sales.
Changing consumer habits, particularly in relation to health-conscious choices and reduced smoking rates, have further exacerbated this trend. With fewer people buying cigarettes, 7-Eleven has had to adjust its strategy and look to other revenue-generating categories, particularly food offerings. Food has now become the chain’s best-selling category in North America, surpassing other traditional convenience store products.
Focus on Food Offerings as Competitors Gain Ground
Despite these closures, 7-Eleven continues to invest in areas where it sees the most growth potential, with food offerings at the forefront of its strategy.
Competing convenience store chains have set a high bar for food and beverage quality, and 7-Eleven is now prioritizing these categories to stay competitive in a fast-changing market. Some competitors have outpaced 7-Eleven in customer satisfaction rankings, largely due to their focus on fresh and diverse food options, a trend 7-Eleven is working to replicate.
The shift toward food as the chain’s leading product category shows how 7-Eleven is adapting to consumer preferences while contending with increased competition. As the company refines its food selection, it aims to enhance its reputation as a convenient and reliable option for quick meals and snacks.
Future Expansion and Takeover Speculation
In addition to focusing on food, 7-Eleven has signalled its intent to continue expanding into areas with high demand for convenience. While some stores are closing, the company is committed to opening new locations in key markets where foot traffic and customer needs align with its business model. The approach ensures that 7-Eleven maintains a significant presence across North America, even as it closes underperforming sites.
These strategic moves come as the company faces increased pressure from a potential takeover by Couche-Tard, the owner of Circle K. Couche-Tard recently raised its bid to US$47.2 billion to acquire Seven & I Holdings, adding urgency to the company’s efforts to realign and strengthen its operations. The bid is being closely watched as 7-Eleven continues to make decisions that could shape its future for years to come.
While no detailed information has been provided regarding the impact of these closures on Canadian stores, a 7-Eleven spokesperson stated that the company is “optimizing its portfolio” and remains committed to opening new locations in areas with strong demand.
Four 7-Eleven Stores Close in Winnipeg Due to Crime
In Winnipeg, four 7-Eleven stores have closed as part of a larger trend driven by rising crime, particularly shoplifting, which has overwhelmed security efforts. Locations at 815 Ellice Avenue, 665 McPhillips Street, 1007 McPhillips Street, and 1103 Pembina Highway were among those affected.
Despite measures like time-lock safes, security cameras, and reduced access to high-theft items, these stores could not sustain operations. Additionally, the company has warned that up to 10 stores in the city could face similar closures due to ongoing security challenges
Local government and retailers have called for additional policing and broader crime prevention strategies, but many fear that without meaningful intervention, other businesses in these areas could follow 7-Eleven’s lead and shutter their operations.
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Publish date : 2024-10-14 14:49:00
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