More than 400 7-Elevens to Close Before the End of the Year
A significant announcement was made by 7-Eleven, revealing plans to close over 400 of its convenience stores by the end of this year. The decision comes as a response to dwindling cigarette sales and decreasing customer footfall within the stores.
The parent company of 7-Eleven, Japan-based Seven & i Holdings, disclosed this information during a recent earnings call. Among the reasons cited for the closure of 444 stores are declining sales and a decrease in merchandise gross profit caused by economic changes and inflation. The closures will affect stores in both the US and Canada and are scheduled to occur in the final quarter of this year.
In a report by ABC News, it was highlighted that in August, there was a notable 7.3% decline in store traffic, with the “pullback of the middle- and low-income consumer” identified as a key factor. To counter these losses, 7-Eleven intends to focus on promoting and expanding certain aspects of its business, including fresh food, beverages, as well as enhancing digital and delivery services.
Furthermore, the company will be consolidating some of its “non-core assets” into a newly formed holding company named York Holdings, with 31 subsidiaries under its umbrella. There are also plans for the parent company to rebrand as “7-Eleven Corp” to concentrate on its successful convenience stores.
Pressure from investors spurred the Japan-based owner of the chain to explore avenues for increased value after rejecting a bid in August from Alimentation Couche-Tard, the operator of Circle K. The rejection was based on the belief that the offer undervalued the growth potential and overall worth of the company.
As the closure of these 7-Eleven stores looms on the horizon, it marks a significant shift in strategy for the popular chain as it navigates through evolving consumer trends and economic challenges.