7-Eleven

7-Eleven is a worldwide chain of convenience stores. It is, since March 2007, the largest chain store in any category, beating McDonald's by 1,000 stores.^[1] Its stores are located in eighteen countries, with its largest markets being Japan, the United States, Taiwan, and Thailand. 7-Eleven is a subsidiary of Seven & I Holdings Co. of Japan.

Among 7-Eleven's offerings are private label products, including Slurpee, a partially frozen beverage introduced in 1967^[2], and the Big Gulp introduced in 1980^[2] that packaged soft drinks in large cups ranging in size from 590 ml to 1.8 L (20 to 64 fluid ounces).

History

The company has its origins in 1927 in Dallas, Texas, USA, when an employee of Southland Ice Company, Joe C. Thompson started selling milk, eggs and bread from an ice dock.^[3] The original location was an improvised storefront at Southland Ice Company, an ice-manufacturing plant owned by John Jefferson Green. Although small grocery stores and general merchandisers were present in the immediate area, the manager of the ice plant, Joe C. Thompson discovered that selling "convenience items" such as bread and milk was popular due to the ice's natural ability to preserve the items. This significantly cut back on people's need to travel long distances to the grocery stores for basic items. Joe C. Thompson eventually bought the Southland Ice Company and turned it into the Southland Corporation which oversaw several locations which opened up in the Dallas area. Initially, these stores were open from 7 a.m. to 11 p.m., hours unprecedented in their length, hence the name. The company began to use the 7-Eleven name in 1946. By 1952, 7-Eleven opened its 100th store. It was incorporated as the The Southland Corporation in 1961. ^[4]

In 1962, 7-Eleven first experimented with a 24-hour schedule in Austin, Texas.^[5] In 1963, 24-hour stores were established in Las Vegas, Fort Worth, and Dallas.^[6]

In 1987, John Philp Thompson, the CEO of 7-Eleven completed a $5.2 billion management buyout of the company his father had founded.^[7] The buyout suffered from the 1987 stock market crash and after failing initially to raise high yield debt financing, the company was required to offer a portion of the company's stock as an inducement to invest in the company's bonds.^[8][9]

In the 1980s, the company ran into financial difficulties and was rescued from bankruptcy by Ito-Yokado, its largest franchisee. The Japanese company gained a controlling share of 7-Eleven in 1991, ^[4] during the Japanese asset bubble of the early 1990s. Ito-Yokado formed Seven & I Holdings Co. and 7-Eleven became its subsidiary in 2005. In 2007, Seven & I Holdings announced they would be greatly expanding their American operations, with an additional 1,000 7-Eleven stores in the U.S.

Products and services

1.2 L Super Big Gulp

In addition to Slurpee and the Big Gulp, 7-Eleven would come to own or operate several brands and concepts, including Movie Quik, an in-store video-rental service; Citgo, the gas brand sold at many locations up until 2006; as well as Chief Auto Parts, which had locations adjacent to or near several 7-Eleven locations. They also bought White Hen INC on August 10, 2006, mostly in or around the Chicago area, and plans to convert all of the remaining White Hens to 7-Eleven stores.

The Big Gulp fountain drink brand also refers to the name of the 32-ounce (1 litre) fountain drink, the Big Gulp. There is also a 44-oz. (or a smaller 1.2 L, depending on region) size (Super Big Gulp), a 64-oz. (2 l) size (Double Gulp), and a 20-oz. (0.7 l) size (Gulp). In 2005, 7-Eleven began selling its own brand of bottled drinks under the Big Gulp brand name in North America.

Since 2005, the company has offered 7-Eleven Speak Out Wireless, a pre-paid phone service where a cellphone can be purchased directly from a 7-Eleven store in the US and Canada and activated on the spot.

Marketing strategies

July 11 is marketed as "7-11 Day" in the USA, during which participating 7-Eleven stores offer up to 1,000 customers a free 7.11-oz. Slurpee of their choice. ^[10] In Australia this occurs on November 7.

7-Eleven is the sponsor of the 7-Eleven Cycling Team and the #11 Tony Kanaan Andretti-Green Racing IndyCar in the Indy Racing League.

On November 9, 2006, 7-Eleven announced that it had signed on as a major sponsor of the Dallas Mavericks for the following three seasons and as title sponsor of its popular Street Team. As part of that agreement, 7-Eleven gave free coupons to Mavericks fans as they left American Airlines Center following each of the 41 home games of the 2006–2007 season.

A Seattle 7-Eleven store transformed into a Kwik-E-Mart.

Since the 2007-2008 season, 7-Eleven began a promotional partnership with the Chicago White Sox to begin home night games at 7:11 CST (-06:00 GMT). The agreement paid the team $1.5 million over three years to move their game times ahead one minute from the traditional Sox start time of 7:10.^[11]

In anticipation for the July 2007 release of The Simpsons Movie, 7-Eleven turned a dozen of its North American stores into Kwik-E-Marts.^[12] Those stores, plus most of the over 6,000 other stores in North America, sold Buzz Cola, KrustyO's cereal (a version of Fruit Loops), Squishees, pink donuts, and other items from the show.^[13] Also, many regular items, such as coffee and sandwiches, had special Simpsons-themed wrapping and packages. As part of the movie promotion, 7-Eleven held Simpsons contests as well, which one entered by buying certain products in 7-Eleven stores. The "Kwik-E-Mart" promotion turned out to be a huge success for 7-Eleven, with Simpsons fans driving as far as hundreds of miles to buy the special themed merchandise.^[14] It also resulted in a 30% increase in profits for the converted 7-Elevens.^[15]

7-Eleven around the world

Australia

The first 7-Eleven in Australia opened on August 24, 1977 in the Melbourne suburb of Oakleigh. There are currently 363 stores in the states of Victoria, New South Wales and Queensland; the majority of stores are in metropolitan areas. Stores in suburban areas often operate as petrol stations. Stores are owned and operated as franchises, with a central administration.

On November 7, a free Slurpee is given to any customer that says Happy 7-Eleven Day to the person behind the counter between the hours of 7 a.m. and 11 p.m.

In August 2008 The Age newspaper reported that 7-Eleven was suspected of severely underpaying their staff. Fast food and retail workers' union UNITE has claimed that some 7-Eleven workers are paid as little as $9 per hour. Currently the Workplace Ombudsman is investigating the employment practices of 7-Eleven.

Canada

A Canadian 7-Eleven Store with gasoline in Woodstock, Ontario.

In Canada, a limited number of 7-Eleven locations have filling stations with gasoline distributed by Shell Canada or Petro-Canada, and some are combined with an Esso. In November 2005, 7-Eleven started offering a wireless service called 7-Eleven Speak Out Wireless. They also usually have ATM service through Canadian Imperial Bank of Commerce. The first 7-Eleven store to open was in Calgary on June 29, 1969. There are currently 465 7-Eleven stores as of April 1, 2008.

Hong Kong and Macau

7-Eleven has operated in Hong Kong since 1981 under the ownership of Dairy Farm. The company opened its 711th Hong Kong store July 11 (7-Eleven Day), 2006, in the Causeway Bay district of the city.^[16] With most locations being in urbanized areas, approximately 40 percent are franchised stores. In September 2004, Dairy Farm acquired Daily Stop, a convenience store chain located mainly in the territory's MTR stations, and converted them to 7-Eleven stores immediately upon takeover.

7-Eleven entered the Macau market in 2005, and now has more than 30 stores in operation.

Japan

7-Eleven in Niigata, Japan.

Japan has more 7-Eleven locations than anywhere else in the world, where they often bear the title of its holding company "Seven & I Holdings". Of the 34,200 stores around the globe, 12,013 of them are located in Japan. 1,577 are in Tokyo alone.

The feel and look of the store is somewhat different from that of the U.S. 7-Elevens in Japan offer a wider selection of products and services. Japanese 7-Elevens offer not only food, drinks, and magazines, but also video games and consoles, music CDs, DVDs, digital cardreaders as well as seasonal items like Christmas cakes, Valentine's Day chocolates, and fireworks. Slurpees and Big Gulp super size soft drinks are no longer sold in Japan; these products were not popular when 7-Eleven originally opened in Japan.

On September 1, 2005, Seven & I Holdings Co., Ltd., a new holding company, became the parent company of 7-Eleven, Ito Yokado, and Denny's Japan.

A 7-Eleven located in Kedah, Malaysia.

Malaysia

Malaysian 7-Elevens are owned by Convenience Shopping Sdn. Bhd. (CSSB) which now operates 909 stores nationwide and plans to expand to over 1,000 stores. 7-Eleven in Malaysia was incorporated on June 4, 1984 by the Berjaya Group Berhad.

Mexico

In Mexico, 7-Eleven was called Super 7. In 1995, the name changed to 7-Eleven, but is still called Super Siete (Super Seven in Spanish) in some places.

Philippines

In the Philippines, 7-Eleven is run by the Philippine Seven Corporation (PSC). Its first store opened in 1984. In 2000, President Chain Store Corporation (PCSC) of Taiwan, also a licensee of 7-Eleven, bought the majority shares of PSC and thus formed a strategic alliance for the convenience store industry within the region.

Scandinavia

7-Eleven in Lund, Sweden.

The owner of the master franchise for 7-Eleven in Scandinavia is Reitan Servicehandel, a part of the Norwegian retail group Reitan Group. All stores are franchised, and 7-Eleven often tries to place the stores on corners in city centers. After Reitangruppen bought the filling station chain HydroTexaco (now YX Energy) in Norway and Denmark in 2006 it has announced that several of the stores at the filling stations will be rebranded 7-Eleven, others will remain under the YX-concept.

In Norway, the first 7-Eleven was opened at Grünerløkka in Oslo on September 13, 1986. As of April 1, 2008, there are 98 7-Eleven stores in Norway, more than half of these are in Oslo. Norway has the northernmost 7-Eleven in the world, situated in Tromsø.

7-Eleven on Strøget, Copenhagen.

The first Danish 7-Eleven was opened in Østerbro on September 14, 1993. As of December 1, 2008, there were 121 stores, mostly in Copenhagen, Århus, Aalborg and Odense.

Reitan Servicehandel Sverige has the license in Sweden. In the mid-1990s, 7-Eleven in Sweden received adverse publicity, resulting in many stores being sold and closed down. For a time there were only 7-Elevens in Stockholm and Gothenburg. 7-Eleven returned to the south of Sweden in 2001 when a convenience store opened in Lund. As of 2005, there are 74 7-Elevens in Sweden: 55 of them in Stockholm, 16 in Gothenburg, six in Metro Malmö (including three in Lund, two in Malmö and one in Svedala), and two in Helsingborg. After an agreement with Shell on August 27, 2007, 112 Shell Select-outlets will be remade into 7-Eleven as of April 2009.

Singapore

A 7-Eleven outlet in Singapore.

In Singapore, 7-Eleven forms the largest chain of convenience stores island-wide. There are at present 419 7-Eleven stores scattered throughout the country. Stores in Singapore are operated by the Dairy Farm International Holdings, franchised under a licensing agreement with 7-Eleven Incorporated, headquartered in the United States.

The first 7-Eleven stores in Singapore were operated in 1983 with a franchise license under the Jardine Matheson Group. The license was then acquired by Cold Storage Singapore, a subsidiary of the Dairy Farm Group, in 1989. At present, 7 Eleven plans to expand its base to include 300 stores, within the next few years. 7-Eleven has also recently signed an agreement with Royal Dutch Shell to include its convenience stores in all Shell Petrol Stations.

All the 7-Eleven stores in Singapore operate around the clock, except for stores in Biopolis, hospitals, MRT Stations, Raffles Junior College, Singapore Management University and Nanyang Technological University, which have shorter operating hours.

South Korea

7-Eleven has a visible presence in the South Korean convenience store market where it competes with Mini Stop, GS25 (formerly LG25), Family Mart and independent competitors. There are 1,750 7-Eleven stores in Korea, with only the United States, Japan, Taiwan and Thailand hosting more stores. Korean stores no longer carry branded products such as Slurpee or Big Gulp.

Taiwan

With the highest 7-Eleven outlet density in the world, it is not an unusual scene in Taiwan for two 7-Eleven shops to stand face to face across an intersection.

In Taiwan, the 7-Eleven is one of the most popular convenience stores, and is owned by The Uni-President Chain Store. The first store opened in 1980 and since then has grown to cover 4,807 stores as of June 9, 2008.^[17] Taiwan has the world's third largest collection of 7-Eleven convenience stores. With 6,200 potential shoppers per store, Taiwan also has the smallest number of potential shoppers per 7-Eleven convenience store (compared to Japan's 14,946 potential customers for each 7-Eleven and the United States' 48,359 customers for each store).

Thailand

The franchise in Thailand is the Charoen Pokphand Group, which in turn grants franchises to operators. There are 4,402 7-Elevens in Thailand, 1,500 of which are in Bangkok, making Thailand have the 4th largest number of stores after the US, Japan and Taiwan.

United States

In the United States, many 7-Eleven locations used to have filling stations with gasoline distributed by Citgo, which in 1983 was purchased by Southland Corporation (and 50% of Citgo was subsequently sold in 1986 to Petróleos de Venezuela, S.A. and the remaining 50% in 1990). Although Citgo was the predominant partner of 7-Eleven, other oil companies are also co-branded with 7-Eleven, including Fina, Exxon, Marathon, BP, and Pennzoil. Alon USA is the largest 7-Eleven licensee in North America. The latter of the group signed an agreement to cobrand with 7-Eleven at their remaining filling stations in 2003 following Shell's takeover of Pennzoil-Quaker State the year before.

7-Eleven in Oklahoma City advertising the "Icy Drink". Outlets in Oklahoma do not sell the item under the traditional name "Slurpee".

The only independently owned 7-Eleven stores are located in the Oklahoma City, Oklahoma metropolitan area. About 100 stores are owned by the family of Jim Brown (who formerly owned the U-Totem chain) under special arrangement with the company since 1953. These stores carry a slightly different product selection than other 7-Eleven stores in the U.S. They do not serve hot dogs or nachos, but have their own bakeries, called Seventh Heaven.^[18] Also, due to this agreement, they carry a non-7-Eleven branded product in lieu of the Slurpee, the Icy Drink, which is not to be confused with the ICEE.^[19] The one side effect to this arrangement is that national advertising campaigns and promotions (e.g. movie marketing tie-ins) cannot be used.

In 1987, Southland acquired High's Dairy Stores of Maryland, Virginia, and Washington, D.C., many of which were converted to 7-Elevens.

Once ubiquitous, 7-Eleven stores are no longer found in some Midwestern and Southeastern states. First of all, 7-Eleven has never operated in the Tulsa, Oklahoma area due to an agreement between the owner of the aforementioned independently-run 7-Eleven stores and the owner of Tulsa-based QuikTrip not to compete in each other's markets. ^[20] In May 1998, it was announced that 113 7-Eleven stores would be sold and converted into Kum & Go stores. Other 7-Elevens, especially those in larger cities like Minneapolis and Saint Paul, closed. In states like Minnesota, Iowa, and Wisconsin, other convenience stores like SuperAmerica, QuikTrip, Kwik Trip, Casey's, and Speedway occupy the same market. In the Pennsylvania market — a market noted for innovation within the convenience store industry — 7-Eleven competes with Turkey Hill, Wawa from the Philadelphia area, and Sheetz from Altoona.^[21] 7-Eleven is also absent in several cities in Texas, even though the United States headquarters is based there. In North Carolina, 7-Elevens are only seen in the northeastern part of the state, as part of the Hampton Roads market. In the rest of the state, there are several equivalents.

Sign on a 7-Eleven filling station pump.

On September 27, 2006, 7-Eleven announced its 20-year contract with Citgo was coming to an end and would not be renewed. 7-Eleven Spokeswoman Margaret Chabris said "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president. Certainly Chavez's position and statements over the past year or so didn't tempt us to stay with Citgo." Later she said that "People are making it out to be more than it is."^[22] Citgo's Chief Executive Felix Rodriguez responded with a correction the following day, accusing 7-Eleven of exploiting the situation to score political points against Chavez, and pointing out that Citgo's decision to terminate the contract with 7-Eleven had been made in July, for practical and economic reasons: “[The reports are] a manipulation because ever since the month of July have we announced that we did not intend to renew a contract with 7-Eleven, which was 20 years old and that was part of a bad business deal for Venezuela."^[23] A statement found on Citgo's homepage stated, "The 7-Eleven contract did not fit within CITGO's strategy to balance sales with refinery production after the sale of its interest in a Houston area refinery."

At locations that have already phased out Citgo fuel, 7-Eleven is no longer accepting Citgo's credit cards. 7-Eleven stores that have removed the Citgo sign usually replace it with an "Oh Thank Heaven!" or "Fast and Fresh" sign on the main sign display, and simply place the 7-Eleven logo on the canopy over the pumps.

In March 2007, it was announced that 7-Eleven would sell its corporately-owned stores in northern Texas and in Florida to franchisees ^[24]; the chain has been franchising stores since 1964. The sale will make 7-Eleven virtually a franchise-only operation in six years.

Supermarket News ranked 7-Eleven's North American operations No. 11 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $15.0 billion.^[25] Based on 2005 revenue, 7-Eleven is the twenty-fourth largest retailer in the United States.^[26].

7-Eleven franchises in the United States

7-Eleven is moving toward franchising most of its remaining corporate locations inside the United States. The 7-Eleven franchise system splits the gross profits 50/50 or close to it, between the company and the individual franchisee. The initial 7-Eleven franchise term is 15 years. The franchise fee and other upfront fees collected by 7-Eleven from a newly approved franchisee, in addition to ongoing 50:50 sharing of profits, is not transferable to another incoming franchisee in the same store, for the unexpired portion, if any, of the current 15 year contract. For example if one pays full franchise fee for 15 years and has to leave the store after one year due to any reason, they stand to lose the franchise fee for the remaining 14 years of their term.

Rankings

7-Eleven has been consistently ranked in Entrepreneur's Franchise 500^[27], most recently being selected as the #1 overall franchise. In addition, they were also ranked #38 in Fastest-Growing Franchises^[28] and #2 in Low Cost Franchises.^[29]

In 2008, 7-Eleven was named the number one franchise by Entrepreneur, beating out Subway, who had held the number one spot for 15 years ^[30].

The name

The company's first convenience outlets were known as Tote'm stores since customers "toted" away their purchases, and some even sported genuine Alaskan totem poles in front. In 1946, Tote'm became 7-Eleven to reflect the stores' new, extended hours - 7 a.m. until 11 p.m., seven days a week. Today those store hours are no longer relevant. The company's corporate name was changed from The Southland Corporation to 7-Eleven, Inc. in 1999.^[31]

In Popular Culture

7-Eleven is to be featured in Australian animated-comedy short-movie, Deemed Pathetic, with the titled of the animation, The 7-11 Attacks.

References

External links

• Seven-Eleven Japan Co., Ltd
• 7-Eleven global sites index
• Korea Seven Company, Limited