When you think corporate world domination, you think Wal-Mart, or Starbucks. 7-Eleven doesn’t normally come to mind. They’d like to change that. In fact they’ve been hard at work on the front for quite some time.
I remember not that long ago when 7-Eleven was in some serious trouble. The company was bought out by management in the late 80′s in a highly leveraged deal. In 1987 there was a stock market crash. That’s never good when you’re using someone else’s money. Stock had to be floated to give the bonds value and the Japanese arm came in and bought a controlling stake. By 2005 the Japanese had formed Seven & I Holdings and had folded all operations into their corporation. 7-Eleven is now larger than McDonald’s worldwide, boasting more than 46,300 retail locations. That’s a lot.
And that’s not all. 7-Eleven owns quite a few brands aside from their retail shops. Movie Quik, an in-store video-rental service; Citgo (the gas stations and branded fuel operations,) Chief Auto Parts, Speak Out Wireless (a prepaid phone service sold in 7-Eleven locations,) White Hen Inc. (a convenience store chain mainly in Chicago and Massachusetts,) and a new deal is the works to purchase Open Pantry locations throughout Wisconsin.
That major growth is paying big dividends for the parent corporation. Seven & I Holdings took in roughly $62.4 billion in sales in 2011, up almost $5 billion from 2010 figures and almost doubling revenue from 2006.
7-Eleven is focusing its major growth in South Korea, Thailand, the United States and Canada. 3,130 stores opened in those countries last year, according to Seven & I Holdings Co.’s annual report. In the US, the chain is using the same saturation strategies that reaped huge benefits in Taipei and Tokyo. New York City is one of the major markets set to see a large expansion in the next few years.
7-Eleven’s strategy isn’t just expansion. 7-Eleven encourages franchisees to custom tailor the items they sell to local markets. In parts of New York they feature Kosher items and candies imported from Israel. In Manhattan stores feature organic products.
If you’re in Hong Kong, you can eat at the 7 Café or pay your phone bills at the store. In Taiwan you can pay traffic tickets, utility bills, or send packages. Stores there are so popular that many intersections have two or three. The government offered free health checkups for citizens last year and partnered with 7-Eleven to use it stores. In Japan, shoppers can receive online shopping purchases at their local store, something the company has been testing in the United States with Amazon.com.
“Our format is easily adaptable,” said Dan Porter, vice president of real estate for 7-Eleven Inc., the North American branch of the company. “We can open stores with gas [stations] or without gas, urban walkup stores, stores in strip centers. The flexibility gives us a competitive edge.”
Not everyone is enamored with the company’s expansion plans. Residents in New York and New Jersey have protested stores coming into their neighborhoods, citing the possible harm to family run bodegas and the possibility of unsavory characters hanging around the 24 hour locations. Protests in Portland, Oregon broke out over 15 proposed new store locations. Regardless you’ll be seeing more 7-Eleven locations here and elsewhere. Resistance Is Futile.