7-Eleven to Close Over 400 Stores Amid Declining Sales and Changing Consumer Habits
7-Eleven, the popular convenience store chain, announced that it will be closing 444 underperforming locations across North America. The decision comes in response to several factors, including declining foot traffic, reduced cigarette sales, inflationary pressures, and shifting consumer habits.
The closures, which will affect roughly 3% of the chain’s 13,000 stores across the U.S., Canada, and Mexico, were disclosed in an earnings report released by Seven & I Holdings, the Japan-based parent company of 7-Eleven. While a specific list of the affected locations was not provided, the move is part of a broader strategy to streamline operations and maintain profitability.
Seven & I Holdings cited several economic challenges that have impacted 7-Eleven’s performance, noting that despite the overall strength of the North American economy, middle- and low-income consumers are adopting more cautious spending habits. Factors such as persistent inflation, high interest rates, and concerns about job security have contributed to a 7.3% decline in store traffic in August, marking the sixth consecutive month of decreased footfall.
Cigarette sales, once a major revenue stream for convenience stores, have dropped significantly – by 26% since 2019 – adding to the financial pressures. While alternative nicotine products like Zyn have grown in popularity, they have not fully compensated for the decline in traditional cigarette sales.
In a statement to CNN, 7-Eleven explained that it “continuously reviews and optimizes its portfolio” and that the store closures are part of its growth strategy. The company emphasized its ongoing commitment to opening new locations in areas where demand for convenience is high.
Retail industry analyst Neil Saunders, managing director at GlobalData Retail, described the closures as a “gentle pruning” aimed at keeping the chain efficient. “These locations have likely experienced a sharp decline in traffic, driven by rising food prices and increased competition from online and value stores,” Saunders noted.
Despite the challenges, 7-Eleven remains focused on expanding its food offerings, which have now become its top sales category in the United States. This strategy is seen as essential to competing with rivals like Wawa and Sheetz, which have consistently earned higher customer satisfaction ratings for their food and overall services.
The news of the store closures coincides with a takeover bid from Alimentation Couche-Tard, the parent company of Circle-K. Couche-Tard recently raised its offer to $47.2 billion in its attempt to acquire Seven & I Holdings, signalling ongoing interest in 7-Eleven’s North American operations.
As the company navigates this period of change, 7-Eleven’s focus on refining its operations and catering to evolving consumer preferences will be crucial to maintaining its competitive edge in the convenience store market.
