Oh Thank Heaven for Store Closings and Growth Initiatives

Feb 06, 2002

7-Eleven Inc. plans on a number of growth initiatives this year and next in an effort to increase profitability and become more competitive. GSD&M, an Austin-based advertising agency known for its maverick campaigns, will shepherd a nearly $30 million ad account, handling mostly radio and TV spots. The convenience-store
retailer will also shutter between 115 and 120 under-performing stores in the first quarter of 2002.

In an effort to compete more effectively against the fast-food restaurants, 7-Eleven will aggressively market its proprietary fresh-food business with new menu offerings, improved packaging and higher quality. Other initiatives include expanding the number of stores that feature its V.com kiosks, which allow consumers to cash checks, buy money orders and obtain other financial services. It will deploy additional V.com kiosks later this year and expects to have up to 3,500 kiosks by the end of 2003. The kiosks are now up and running in 98 stores in Texas and Florida. The retailer adds that it will improve store operations through new formalized training and mandated certification programs.

Moderator Comment: Is 7-Eleven stronger for the long run?

The recent reports from 7-Eleven are that the company
is investing in its future with technology upgrades and other strategic investments.
In Wall Street speak, this usually translates into the chain expects its performance
to be less than stellar while maintaining an optimistic view of the future.
The good news for 7-Eleven investors is that the chain does have a number of
positives going for it. Merchandise sales continue to grow and stores shuttered
are essentially being replaced by new locations. Another good piece of news
is that over the next two years the chain will save $44 million in royalties
it currently pays to 7-Eleven Japan. [George
Anderson – Moderator

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