Popular convenience store chain, 7-Eleven, has announced the closure of over 400 stores across North America.
The parent company to 7-Eleven, Seven & I Holdings based in Japan, announced on Thursday that the chain would be closing 444 ‘underperforming’ stores across North America.
Seven and I found as part of their earnings report that a variety of issues in changing consumer habits were resulting in the store closures.
‘Pullback in consumer spending has persisted beyond prior expectations,’ the release said.
Their earnings report revealed that inflation was one of the major influences, stating that from 2019, rent, utilities, groceries and fuel had all risen more than 25 percent.
In their earnings release, the company said: ‘The North American economy remained robust overall thanks to the consumption of high-income earners, despite a persistently inflationary, elevated interest rate and deteriorating employment environment.’
‘In this context, there was a more prudent approach to consumption, particularly among middle -and low-income earners,’ they added.
Consumer habits began focusing more on quality products for less, the company’s report found. Revealing that 69 percent of shoppers wanted more quality products and 60 percent focused on good value for money.
Their report revealed that traffic in North American locations had fallen by 7.3 percent in August, after the company had experienced a consecutive six months of declining traffic.
The company also noted the shift in cigarette sales which saw a 26 percent decrease in total packs sold, from 10,300 million in 2019 to 7,600 million in 2024.
This decline was not saved by shoppers opting for different options, with only an 18 percent shift to other nicotine products, and more buyers switching to cheaper products.
With more than 13,000 stores across the US, Canada and Mexico, the closures make up only 3 percent of their portfolio. The chain also has more than 21,000 stores located in Japan.
A spokesperson for 7-Eleven told Daily Mail: ‘Aligned with our long-term growth strategy, we continuously review and optimize our portfolio to deliver convenience where, when and how customers need it.’
‘As part of this, we made the decision to optimize a number of noncore assets that do not fit into our growth strategy,’ they added, ‘At the same time, we continue to open stores in areas where customers are looking for more convenience.’
The closures are also expected to deliver a $30 million operating income benefit this year, and a $110 million boost to annualized run rate, according to their earnings release.
The news of the hundreds of store closures come after Seven & I cut their earnings forecast for their fiscal year ending February 2025.
Which was also accompanied by the company’s plans to split into two businesses, Fast Company reported.
Their separation and store closures are also an attempt to reassure unhappy investors and keep takeover bids at bay, according to Bloomberg.
The company hopes to focus on the better performing locations that are experiencing higher demand.