Seven & i Holdings looking to expand retail network
During a Q4 2024 earnings call to review Seven & i Holdings Inc.’s recent financial picture, executives of the parent company of 7-Eleven outlined plans to open some 1,300 new stores throughout 2023.
Stephen Dacus, who was recently nominated by the company’s Board as the next CEO spoke about his priorities and the path forward for the company.
“7-Eleven is an iconic brand, and it's the leading convenience brand in both North America and Japan,” he told assembled financial analysts. “We got here in part, because our team are great merchants and innovators. Our team are humble, and they're focused on delighting our customers. That customer focus is directly responsible for our culture of innovation. The proof is in the data. Our ASPD, average per store day merchandise sales, are between 20% and 30% higher than our key competitors in both Japan and North America. Our customers are responding to the innovation our merchants and operators are bringing to our stores. I believe this is our biggest competitive advantage, and it's a really important one.”
While praising the strength of the company’s international franchise network and its employees, and the franchise network’s focus on the customer, “there are a few areas that I would like to change.”
“Truthfully, we have historically been a bit conservative,” he continued This has led to us moving a bit slower than we should have and missing opportunities, and it has impacted our ability to execute. This is something I intend to change. We also need to reemphasize our focus on the creation of shareholder value. I intend to do this with a much more strategic approach.”
To do so, Dacus said the company plans to focus on “winning in mass market retail . . . [and a] focus on continuously bringing our customers better products and services. This is where our culture of innovation and strong merchandising comes in. The second key is execution. This is all about speed and discipline. It does no good to have innovative products or services. If you can't get them into your stores with speed, someone else will do it for you and you'll miss out. By the same token, if you can't roll out a new product or service in the right way at the right time, your customers will be disappointed, and you'll miss out.”
While maintain a tighter grip on costs going forward and looking for savings and synergies to improve profitability, Seven & I Holdings will also look “leveraging our size and scale, better and faster to drive value for our customers,” Dacus said, including new investments in the company’s stores that drive growth.
“I'm really excited about things like the rollout of our QSRs in The U.S., which will more than double the number of QSR stores from 1,000 to 2,100, the rollout of our new prototype in The U.S. with 1,300 new stores expected over the next several years, the rollout of the ship store innovations in Japan to bring hot, fresh, cooked in-store, quality food that our customers can eat at home, in store, or have delivered,” he said. “You will see us invest aggressively in new formats and new capabilities to improve the customer experience at existing stores. I'm really excited about our way forward, and we need to move quickly to make this a reality.”
As well, Dacus added the company is still committed to “completing the IPO of SEI by the second half of 2026 in which we believe will have a number of benefits, including unlocking a great deal of value for our shareholders. And last but not least, we are committed to delivering on our enhanced shareholder return framework, via share repurchases and dividends.”
READ: Seven & i Holdings misses analyst forecasts in uncertain consumer environment
Expanding store count, private label offerings and upgraded food and coffee
Stanley Reynolds, president of 7-Eleven Inc. explained that economic uncertainty and tariff concerns is impacting consumer confidence which has fallen to “a multiyear low and declining consumer spending, as they try to stretch their dollars, by shifting to channels online and delivery in search of deals and discounts. Despite these challenges, we are well-positioned to deliver on the value that our customer is seeking through our key growth strategies.”
In the short term, Reynolds said 7-Eleven in North America will focus on growing its proprietary branded products —including offering more fresh food and beverage options in the stores and specialty coffees— accelerating its digital initiatives and delivery programs and growing and enhancing the store network.
“We're able to drive further differentiation and value to customers through our portfolio of 900 plus private brands,” he said. “In 2024, we launched 215 new items across high growth categories that resonated with customers and plan to add another 200 items in 2025. In addition to driving traffic and sales to our stores, our private brands have a 51% margin, approximately 18% higher than national brands. We'll continue to invest in our private brand portfolio and launch high-quality, high-value products that customers are seeking.”
Reynolds added that the company plans to build 550 new stores between 2025 and 2027, with a focus on our new standard stores. “These food forward stores are resonating with our customers and driving APSD about 18% higher than our system average.,” he added. “We'll continue learning from these stores and refine our new store standard to meet the needs of consumers, both now and in the future.”
“We remain confident in our long-term strategy, which is aligned with the customer's evolving preferences and will set us up for success through 2030,” Reynolds continued. “We've seen promising results from our proprietary product initiatives and plan to add 5,450 additional stores to our food and beverage modernization program by 2026, and add over 1,100 restaurants as well as hit $1.9 billion in private brand sales by 2030. With consistent growth in 7NOW since inception, we expect to grow delivery sales to $1.25 billion by 2030. As discussed earlier, we're focused on maintaining financial and operational discipline, and we're confident our efforts will lead to a 275 basis point OSG&A rate improvement by 2030. Finally, we're accelerating new stores with a focus on our new standard, and we plan to open 1,300 new locations by 2030 with 550 of them between 2025 and 2027.”
