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One of my favorite memories from while I was growing up ws being a senior in high school with a new driver’s license. My friends and I would take turns leaving campus (back when you could do these things) during our free periods and running up to the local 7-Eleven to bring back snacks and beverages. I always got a French vanilla cappuccino. We all felt so grown-up, ha. When I moved to the South, 7-Elevens weren’t a thing in my area, and now I only go every once in a while when I visit my family back on Long Island.
It looks like 7-Eleven’s days of hyping up teenagers over Slurpees and flavored cappuccinos may be behind them. Last week, 7-Eleven’s president and CEO announced that the company plans to close 444 “underperforming stores” across the United States and Canada. No locations have been released just yet, and this makes 3% of their total 13,000 stores across North America. As it turns out, one of the biggest reasons for their struggling profits is less sales thanks to inflation, but specifically in a decline in cigarette sales! 7-Eleven has seen an increase in food sales as cigarette sales has declined, so now they’re leaning into “high-quality” food.
7-Eleven President and CEO Joe DePinto announced during a Thursday, Oct. 10 earnings call that the company will shut down 444 “underperforming stores,” according to the Seeking Alpha Oct. 11 transcript. However, the exact locations were not released. The company has over 13,000 stores across North America, meaning only 3% of its stores will be closed, per CNN.
“Aligned with our long-term growth strategy, we continuously review and optimize our portfolio to deliver convenience where, when, and how customers need it,” a spokesperson for 7-Eleven told TODAY.com. “As part of this, we made the decision to optimize a number of non-core assets that do not fit into our growth strategy. At the same time, we continue to open stores in areas where customers are looking for more convenience.”
The convenience chain, owned by the Japanese company Seven & I Holdings, faced a “challenging” first half of 2024 and is experiencing the same inflationary pressures as restaurants, as well as a decrease in traffic. Additionally, the convenience market has noticed a decline in demand for cigarettes. “From January to June, we gradually improved sales each month… excluding cigarettes,” DePinto said, according to Seeking Alpha. The sales of cigarettes has gone down by 26% in the past five years, with smokers either opting for other nicotine products or quitting.
“Food recently overtook cigarettes as the largest category at 7-Eleven Inc.,” DePinto revealed. As a result, the company is ready to pivot and will provide customers with “high-quality food and services.”
“Growing our proprietary products is an important part of our future. This platform offers our customers a wider assortment of hot food and specialty beverages,” DePinto said. The company intends to add bake-in-store items, self-serve roller grills, grab-and-go cases, espresso, cappuccino, iced coffee and lattes.
Its recent decision came one day after Reuters reported that Circle-K owner Alimentation Couche-Tard, increased its bid for the company by $8 billion, reaching a total of $47.2 billion.
It’s pretty cool/interesting that they’ve seen such a big decline in cigarette sales. I know, vaping probably is a big contributor to that, which also isn’t great. Anyway, I say this with the best-intentioned skepticism, but what on earth does “high-quality food” mean when it comes to 7-Eleven? Are they planning on serving Costco-level hot dogs or are they going to go the Sheetz route of “made to order?” Are they really bringing the class and serving lobster raviolis or something? Won’t actual high-quality foods raise prices? Oh! There’s actually a gas station about a half-hour from my house that is “famous” for its sushi. I’m not kidding! It regularly makes it on those email lists of best food in the area and people voted on it in one of those local newspapers. I keep meaning to check it out. In the meantime, the next time I visit my parents, I’m going to have to get one (potential) last French vanilla cappuccino for old times’ sake.
