retail news in context, analysis with attitude

The Wall Street Journal has a story about how 7-Eleven seems to be falling behind “rivals that are gleaning more sales from healthier snacks and freshly cooked meals,” with sales in this segment that went up 20 percent last year - which sounds good, except that industry-wide, those sales went up 31 percent.

Chief Merchandising Officer Jesus Delgado-Jenkins tells the Journal that “7-Eleven wants to introduce home delivery of goods from deodorant and batteries to sandwiches in more cities. The company, which is competing with Amazon.com Inc. and others for home delivery, says half of people in the U.S. live within a mile of one of its red-and-green signs.”

And, “the company’s executives said they are working to come up with better foods to sell in their 9,700 North American stores.”

The extent of the experimentation: “Some 7-Eleven stores are selling freshly made chicken wraps and cold-pressed juices, and some have tested delivery by drone.”

But, the Journal writes, there’s a problem: “The effort to freshen up 7-Eleven’s business has run into resistance from the chain’s franchisees. Eight out of 10 7-Eleven stores are owned by franchisees, most of whom own fewer than five stores. Many say it is too expensive to maintain new equipment like ovens, and that 7-Eleven needs to pay to remodel their stores if they want them to sell more fresh and hot food.”
KC's View:
I’m sympathetic to the financial concerns of the franchisees, but they’d better recognize the possibility - and maybe the likelihood - that if they don’t get with the program, their businesses may soon be rendered irrelevant. They need to understand that they’re not just competing against other c-stores, like Wawa and Sheetz, that are eating their lunch.

They’re also competing against every supermarket, drug store and dollar store that wants to make a convenience play … not to mention online retailers like Amazon that want to marginalize every non-exceptional store experience …. and every restaurant with a delivery mechanism to satisfy hunger pangs and provide immediate gratification.