On Thursday, October 10, Seven & I Holdings, the parent company of 7-Eleven, revealed in an earnings report that due to slowing sales, decreased foot traffic, inflationary pressures, and a decline in cigarette purchases, 444 of 7-Eleven’s stores will be closing.
The company did not immediately disclose the specific list of stores to be closed. With over 13,000 stores in the United States, Canada, and Mexico, the number of stores being closed accounts for 3% of the investment portfolio.
The company also operates over 21,000 stores in Japan.
In a press release, Seven & I stated, “Despite ongoing inflation, rising interest rates, and a deteriorating job environment, the overall North American economy remains strong due to the spending power of higher-income individuals.”
However, the company also noted that “consumers are becoming more cautious in their spending, especially among the middle to lower-income groups.”
A combination of these factors led to a 7.3% decrease in foot traffic at 7-Eleven in August, marking the sixth consecutive month of decline. The chain also pointed out that cigarette purchases, which were once the largest sales category for the convenience store, have dropped by 26% since 2019.
In a statement to CNN, 7-Eleven mentioned that the company is continuously reviewing and optimizing its product mix, with store closures being part of its growth strategy. The company added that 7-Eleven chain stores will continue to open new stores in areas where customers are seeking more convenience stores.
CNN reported that Neil Saunders, Managing Director and Retail Industry Analyst at GlobalData Retail, characterized the closure of 444 stores as a “moderate streamlining of the (7-Eleven) chain to maintain efficiency and profitability.”
Saunders told CNN, “Due to consumers grappling with rising food prices and reducing purchase quantities, closed stores may experience disproportionate decreases in foot traffic and customers.”
“In certain areas, intensifying competition from online and value stores as consumers seek lower prices will also impact them,” he said.
Meanwhile, 7-Eleven stated that it will continue to invest in the food industry in the United States as food remains the highest-selling category and the most attractive item to customers. According to a recent survey, competitors such as Wawa and Sheetz received higher overall product satisfaction ratings, while 7-Eleven’s ranking was much lower.
According to a survey released by the American Customer Satisfaction Index (ASCI) on October 1, Wawa garnered the highest customer satisfaction score of 82 points among all American chain stores with its signature sandwiches. Sheetz ranked fifth, while 7-Eleven scored only 1 point higher than the last-placed Shell.
(This article references reports from CNN and CBS)