- Seven & i Holdings, the parent company of 7-Eleven, plans to focus its efforts more fully on its convenience store business and transition away from broader retail and department stores, according to a Thursday business update.
- This announcement comes nearly two months after activist investors ValueAct Capital asked the company to spin out its c-store divisions into its own company.
- 7-Eleven Inc., the North American arm of Seven & i’s convenience store business, will focus on four “strategic areas in the medium-term,” including growing overall store count and developing its fresh food and private label offerings, according to the business update.
More specifically, 7-Eleven Inc. aims to build its fresh food, proprietary drink and private label departments to 34% of its sales by 2025, according to the update. It’s also targeting $1 billion in revenue for its 7NOW delivery business, though no specifics on the manner of that growth were discussed.
The strategic plans also include completing the integration of Speedway this year and growing more in North America’s “fragmented” market through both M&A and new builds.
So far in 2023, M&A has been a hot topic in the convenience arena. Experts have said that this is an attractive time for consolidation thanks to factors like technological advancement, inflation and labor costs making it hard for some smaller retailers to stay in business.
“Consumer taste has also diversified further following changes in behavior and values, influenced by the global pandemic,” wrote Seven & i in the report. “In the U.S. there are higher expectations for [convenience stores] to meet demand for fresh and healthy food.”
While it’s not entirely separating the convenience store section of the company from the rest, Seven & i is streamlining its non-convenience business. It is combining its Ito-Yokado and York-Benimaru grocery chains into one entity called Metropolitan SST, reducing the number of Ito-Yokado stores from 126 to 93 in three years and exiting the apparel business entirely.
Seven & i has also already agreed to sell its outstanding shares of department store brands Sogo and Seibu to Sugi Godo Kaisha. That sale was supposed to happen in February, but got pushed back to March.
In the wake of Seven & i’s third-quarter earnings report in January, the company is also undergoing a change in management structure to ensure that there’s a chief officer for every corporate function and a head of each business domain.
7-Eleven has over 79,000 stores across 20 countries, including over 20,000 in Japan, 13,000 in the U.S. and its recently opened first store in Israel.