7-Eleven to Adopt Japanese Concept into U.S. Stores

Japanese 7-ElevenPhoto byMr.ちゅらさん

UNITED STATES - In a recent YouTube video posted by The Wall Street Journal titled "7-Eleven Is Reinventing Its $17B Food Business to Be More Japanese | WSJ The Economics Of", the convenience store giant announced its plans to transform its American stores to mirror the successful operations of its Japanese counterparts.

Japanese Inspiration for American Stores

In the video, The Wall Street Journal highlights the stark differences between 7-Eleven stores in Japan and the U.S. While Japanese 7-Elevens offer a variety of fresh, high-quality food items like rice balls, Michelin-type ramen, and milk tea, American stores are more known for Slurpees and hot dogs. This shift aims to change the perception of American 7-Elevens from merely convenient stops to destinations for high-quality food.

Historical Context and Ownership

Originally an American company, 7-Eleven faced financial challenges, going bankrupt during the Great Depression in 1932 and again in 1990 due to mounting debts. It was then acquired by Seven & I Holdings, a Japanese company that has operated 7-Eleven stores in Japan for over a decade. This acquisition brought a data-driven approach to inventory management, focusing on localizing product assortments to meet customer needs.

Key Differences and Innovations

The differences between American and Japanese 7-Elevens are significant. U.S. stores are typically larger and attached to gas stations, whereas Japanese stores do not sell gas but offer a wider array of fresh food. Japanese 7-Elevens receive multiple shipments daily, ensuring fresh products, while American stores previously received only two deliveries per week.

To align more with the Japanese model, American 7-Elevens have now implemented a proprietary distribution system, allowing franchises to place orders daily based on sales data, demographic trends, and local weather forecasts. This has significantly reduced the inventory of slow-selling items, improving efficiency and customer satisfaction.

Prepared Food and Commissary Upgrades

Food sales are becoming increasingly crucial for 7-Eleven, especially as tobacco sales decline and the future of gas sales becomes uncertain. Last year, American 7-Elevens sold over $17 billion worth of food, including 315 million cups of coffee, 153 million Slurpees, and 99 million slices of pizza. The goal is to increase store brand food sales to one-third of overall sales by next year.

To achieve this, 7-Eleven is upgrading its 17 commissaries across the U.S., partnering with Warabeya, a supplier for Japanese 7-Elevens. New factories in Hawaii, Texas, and Virginia will enable the production of a wider and more localized range of food items, introducing new products like spicy miso ramen soup to American customers.

Leveraging Data and Technology

7-Eleven plans to capitalize on its vast data operation to drive sales. The company’s loyalty program, with 95 million members, provides valuable demographic information, allowing for targeted advertising within stores to spur impulse buys. Additionally, delivery services are expanding, with delivery orders often doubling the amount of in-store purchases.

Looking Ahead

The transformation of American 7-Elevens to resemble their Japanese counterparts is an ambitious endeavor. By focusing on high-quality food, efficient inventory management, and leveraging data, 7-Eleven aims to attract more customers and increase sales. The hope is that American customers will embrace this new approach, bringing a bit of the excitement seen in Asian markets to the U.S.

As the company celebrates nearly a century of growth, it continues to adapt to changing consumer needs, striving to meet customers where they are and anticipating where they are going.