If there haven’t already been enough store closures across the U.S., another popular brand will be closing its doors in multiple neighborhoods. Don’t be too surprised next time you head over to your favorite convenience store, and they have a closed sign on their door, as 7-Eleven will be closing over 400 stores in the near future. While there may still be 13,000 stores strong across Canada and America, some shoppers might feel the effects of these closures more than others.
Reasons Behind the Closures
It’s no easy feat that this convenience giant decided to close 444 stores across North America, but they have a pretty good reason. The company has faced constant declines in foot traffic and revenue, with inflationary pressures making it harder for many customers, especially those in middle—and low-income brackets, to justify frequent visits.
Not to mention the effect vaping has had on the market. They have seen a major drop in cigarette sales since 2019, by as much as 26%. Shoppers are also looking for more affordable ways to buy fresh, high-quality foods that fit the needs of their budget. “Affordable, high-quality foods are becoming more important,” Joe DePinto, the CEO and president of 7-Eleven, said in the earnings call.
Impact on Local Communities
While closing only 3% of their stores doesn’t sound that bad to most, these closures can majorly affect small communities that rely on them. These stores are a simple way for shoppers to get their hands on daily necessities, especially in neighborhoods with limited options. These closures can also cause other small businesses to see a decline in sales as a major retailer usually draws more customers to other stores.
The looming closures signal more than just lost retail outlets; they disrupt the everyday lives of millions who rely on these stores’ convenience and comfort.
Changing Consumer Behavior
With the convenience of food delivery apps, online shopping, and curbside pickup, shoppers have completely changed how they look at convenience shopping. Who needs to run to the store when the store can come to you? “Impulse buys and emergency runs are down because people can get almost anything delivered,” said retail strategist Linda Chen.
Health-conscious shoppers are also looking for fresher, higher-quality food and beverage options, fueling the shift away from the processed snacks and sugary drinks that once dominated convenience store shelves.
Corporate Statements and Decision-Making
During recent earnings calls, CEO Joe DePinto and executives from parent company Seven & I Holdings emphasized that closing 444 underperforming stores is a direct response to persistent inflation, declining customer traffic, and a sharp drop in cigarette sales. These closures are part of a bigger plan to streamline stores where they are needed most.
“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 decided to optimize a number of non-core assets that do not fit into our growth strategy. At the same time, we continue to open stores in areas where customers are looking for more convenience.” said a spokesperson from 7-Eleven.
The Loss of Human Element
These stores are more than just a way to shop for what you need and get out before you get noticed. In small communities, these stores serve as a social hub where familiar faces greet customers, engage in casual conversations, and build relationships with staff and neighbors.
“No more friendly cashiers, hot food, or a safe place to pause during a long shift,” said one regular customer in a recent interview.
Financial Pressures and Profit Margins
Convenience stores operate on razor-thin profit margins, often just 1-3%, which only puts more stress on companies when there is a price increase they need to account for. In 2024, 7-Eleven’s operating margin dropped to just 2.44%, reflecting the impact of persistent inflation, rising labor costs, and declining consumer confidence, particularly among lower- and middle-income shoppers.
In response, 7-Eleven has launched aggressive cost-cutting initiatives, including a $500 million reduction target. It is focusing on higher-margin proprietary products and operational efficiencies to stabilize its finances and position itself for future growth.
Corporate Giant Wants It All
In a surprising turn of events, Canadian retail giant Alimentation Couche-Tard is aggressively pursuing a takeover of Seven & I Holdings, the Japanese parent company of 7-Eleven. Couche-Tard, which owns the Circle K chain, has made a few serious offers, most recently valued at around $47 billion, to acquire Seven & I. Their goal is to create a dominant force in the industry by merging two of the world’s largest convenience store operators.
“I admire both Alain Bouchard for his belief in 7-Eleven and desire to acquire them, but I also admire Junro Ito for his confidence in the future of 7-Eleven,” said James Keyes, 7-Eleven’s former vice president of national gasoline operations.
What’s Next for the Industry?
Companies are now investing in digital solutions to enhance customer experience in stores. They are turning to products like AI-powered inventory management, self-checkout systems, and personalized loyalty programs to give their clients the best convenience possible.
The integration of contactless payment options and mobile apps is becoming standard, while innovations like EV charging stations are attracting new customer segments and opening up additional revenue streams.
Adapt or Be Left Behind
The world is constantly changing, and shoppers are doing exactly the same. To stay relevant and resilient in the world of convenience, it’s all about adapting or dying. Stores must focus on expanding fresh and healthy food offerings, integrating advanced technology for smoother operations, and enhancing the in-store experience to create more customer value.
With a few minor changes, stores can come out on top and stay the beloved stores in the neighborhood everyone goes to.
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