Convenience-store giant 7-Eleven plans to close 444 underperforming stores in North America, parent company 7 & i Holdings revealed in an earnings presentation Thursday.
The chain is struggling with the same inflationary pressures that are impacting traffic and sales at restaurants, plus a decline in demand for cigarettes. Traffic at North American 7-Eleven locations has been negative since early last year and fell 7.3% in August.
As a result, the company downgraded its U.S. profit guidance for the year and said it will close weaker stores. The closures are expected to deliver a $30 million operating income benefit this year and a $110 million boost to annualized run rate, according to the presentation.
The chain also has a deal to sell some North American properties in a $750 million sale-leaseback that will net it a profit of $520 million. It did not say how many locations were involved in that transaction.
Irving, Texas-based 7-Eleven has more than 13,000 U.S. locations and is the largest convenience-store chain in the country. Its scale and array of prepared food make it a serious competitor for restaurants.
The closures come amid a broader strategic shift for Tokyo-based 7 & i as it works to fend off a takeover bid by rival Alimentation Couche-Tard, the owner of Circle K. The deal would bring together the two largest c-store chains in the country.
Earlier this week, Couche-Tard raised its offer to acquire Seven & i from $14.86 per share, or approximately $39 billion, to $18.19 per share, or approximately $47.2 billion.
On Thursday, 7 & i announced that it is creating a separate company for its non-convenience-store businesses, such as supermarkets and specialty stores, so that it can focus more on c-stores. The spun-off company will be called York Holdings Co. Â
To further illustrate its c-store focus, 7 & i is also considering changing its name to 7-Eleven Corp.
Greg Lindenberg of CSP Daily News contributed to this story. CSP is a sister publication of Restaurant Business.
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Publish date : 2024-10-10 10:48:00
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