"If convenience stores are open 24 hours, why the locks on their doors?" If anyone knows, it's 7-Eleven. The North American subsidiary of Seven-Eleven Japan, 7-Eleven operates more than 7,200 company-owned or franchised stores in the US and Canada under the 7-Eleven name. Globally, 7-Eleven licenses more than 24,000 stores in about a dozen countries, mostly in the Asia Pacific and Nordic regions. Its stores range from 2,400 to 3,000 sq. ft. and sell about 2,500 items. The world's leading convenience store company is owned by the Japanese retail conglomerate Seven & i Holdings, which is the holding company for Seven-Eleven Japan, Ito-Yokado, Denny's restaurants, and other businesses.
In addition to retails stores across North America, 7-Eleven grants area licenses to overseas operators of 7-Eleven stores (except for Japan). Royalty fees paid by licensees are included in the company's revenues from operations.
7-Eleven's 2011 total store sales rose about 10% vs. 2010, due primarily to higher gasoline prices. (About 2,720, or 38%, of the convenience stores sell gasoline). Net income grew by more than 18% over the same period. Sales of merchandise dipped nearly 1%, the second consecutive negative annual comparison. However, sales at stores open for more than a year increased by nearly 3% in 2011 vs. 2010, helped along by higher prices for cigarettes.
Given the apparent ubiquity of 7-Eleven stores, it's surprising that the chain has less than a 5% share of the US convenience store market (vs. about 30% for its parent company in Japan). The fragmented US market presents 7-Eleven with plenty of opportunity to build market share by acquiring stores from smaller operators and building new ones of its own. 7-Eleven opened 643 new stores in 2011, a record high. (In 2012 the chain aims boost its store count by 680 locations, including acquisitions.) In 2012, as in prior years, the opportunistic company acquired many small independent operators, including 55 Sam's Mart stores in the Carolinas, about two dozen stores in Texas from Strasburger Enterprises, and 18 Open Pantry stores in Wisconsin. The acquired stores are quickly remodeled and converted to the 7-Eleven banner. The chain has also been aggressively converting company-owned stores to franchise stores in a bid to improve profitability as a result of labor cost savings from workforce reductions. Currently, more than 75% of 7-Eleven's US stores are franchised. The company's goal is to operate a 100% franchise network. The chain is also working to boost the productivity of existing stores by installing new equipment to support the sale of fresh and hot foods and pushing its private-brand of 7-Select products.
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