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7-Eleven

The brand name 7-Eleven is now part of an international chain of convenience stores, operating under Seven-Eleven Japan Co., Ltd.^[1], primarily operating as a franchise. It is the largest chain store with more than 36,842 outlets operating around the world^[2], surpassing the previous record-holder McDonald?s Corporation in 2007 by approximately 1,000 retail stores.^[3] Its stores are located in eighteen countries, with its largest markets being Japan, the United States, Canada, the Philippines, Hong Kong, Taiwan, Malaysia and Thailand. 7-Eleven, Inc. as a former U.S.-originating company, is a subsidiary of Seven-Eleven Japan Co.,Ltd, which in turn is owned by Seven & I Holdings Co. of Japan. On a per-capita basis, Norway for example has one 7-11 for every 47,000 Norwegians, versus for example Canada which has one for every 74,000 Canadians. ^[4] Among 7-Eleven's offerings are private label products, including Slurpee, a partially frozen beverage introduced in 1967^[5], and the Big Gulp introduced in 1980^[5] that packaged soft drinks in large cups ranging in size from 590 ml to 1.8 L (20 to 64 fluid ounces). The US subsidiary of the Japanese firm has its headquarters in the One Arts Plaza building in Downtown Dallas, Texas.^[6]

History

Japan's first 7-Eleven Store in K?t?, Tokyo, opened in May 1974.

The company has its origins in 1927 in Dallas, Texas, USA, when an employee of Southland Ice Company, Joe C. Thompson, started selling milk, eggs and bread from an ice dock.^[7] The original location was an improvised storefront at Southland Ice Company, an ice-manufacturing plant owned by John Jefferson Green. Although small grocery stores and general merchandisers were present in the immediate area, the manager of the ice plant, Joe C. Thompson, discovered that selling convenience items such as bread and milk was popular due to the ice's ability to preserve the items. This significantly cut back on need to travel long distances to the grocery stores for basic items. Joe C. Thompson eventually bought the Southland Ice Company and turned it into the Southland Corporation which oversaw several locations which opened up in the Dallas area. Initially, these stores were open from 7 a.m. to 11 p.m., hours unprecedented in their length, hence the name. The company began to use the 7-Eleven name in 1946. By 1952, 7-Eleven opened its 100th store. It was incorporated as the The Southland Corporation in 1961.^[8]

In 1962, 7-Eleven first experimented with a 24-hour schedule in Austin, Texas.^[9] In 1963, 24-hour stores were established in Las Vegas, Fort Worth, and Dallas.^[10]

In the 1980s, the company ran into financial difficulties and was rescued from bankruptcy by Ito-Yokado, its largest franchisee. In 1987, John Philp Thompson, the CEO of 7-Eleven, completed a $5.2 billion management buyout of the company his father had founded.^[11] The buyout suffered from the 1987 stock market crash and after failing initially to raise high yield debt financing, the company was required to offer a portion of the company's stock as an inducement to invest in the company's bonds.^[12]^[13]

The Japanese company gained a controlling share of 7-Eleven in 1991,^[8] during the Japanese asset bubble of the early 1990s. Ito-Yokado formed Seven & I Holdings Co. and 7-Eleven became its subsidiary in 2005. In 2007, Seven & I Holdings announced they would be expanding their American operations, with an additional 1,000 7-Eleven stores in the U.S.

Products and services

One Arts Plaza, which has the US headquarters of 7-Eleven

1.2 L Super Big Gulp

In addition to Slurpee and the Big Gulp, 7-Eleven would come to own or operate several brands and concepts, including Movie Quik, an in-store video-rental service; Citgo, the gas brand sold at many locations up until 2006; as well as Chief Auto Parts, which had locations adjacent to or near several 7-Eleven locations. They bought White Hen Inc. on August 10, 2006, mostly in or around the Chicago area, and plans to convert all of the remaining White Hens to 7-Eleven stores.

The Big Gulp fountain drink brand refers to the name of the 32-ounce (1 litre) fountain drink, the Big Gulp. There is a 44-oz. (or a smaller 1.2 L, depending on region) size (Super Big Gulp), a 64-oz. (2 l) size (Double Gulp), a 128-oz. (3.8l) size (Team Gulp), and a 20-oz. (0.7 l) size (Gulp). In 2005, 7-Eleven began selling its brand of bottled drinks under the Big Gulp brand name in North America.

Since 2005, the company has offered 7-Eleven Speak Out Wireless, a prepaid phone service where a cellphone can be purchased directly from a 7-Eleven store in the US and Canada and activated on the spot.

The 7-Eleven convenience store announced on November 3, 2009 that it is getting into the value wine business, releasing two low-priced proprietary wines in the United States (under the 'Yosemite Road' brand) and Japan^[14].

Marketing strategies

Japanese 7-Eleven offers a wide variety of products and services.

July 11 is marketed as "7-11 Day" in the USA, during which participating 7-Eleven stores offer up to 1,000 customers a free 7.11-oz. Slurpee of their choice.^[15] In Australia, under the day-month format common in former British colonies "7-11" refers to 7 November; thus 7-11 day is marketed on this date.

7-Eleven Cycling Team is an early example of their sports marketing. The 7-Eleven Cycling Team, later the Motorola Cycling Team, was a professional team founded in the U.S. in 1981 under Jim Ochowicz, a former U.S. Olympic cyclist. The team lasted 16 years under the banner of 7-Eleven through 1990 and Motorola through 1996.

A Seattle 7-Eleven store transformed into a Kwik-E-Mart.

On November 9, 2006, 7-Eleven announced that it had signed on as a major sponsor of the Dallas Mavericks for the following three seasons and as title sponsor of its popular Street Team. As part of that agreement, 7-Eleven gave free coupons to Mavericks fans American Airlines Center following each of the 41 home games of the 2006–2007 season.

Since the 2007 season, 7-Eleven began a promotional partnership with the Chicago White Sox to begin home night games at 7:11 PM Central Time. The agreement paid the team $1.5 million over three years to move their weeknight game times back four minutes from the traditional Sox start time of 7:07.^[16]

In anticipation for the July 2007 release of The Simpsons Movie, 7-Eleven turned 12 of its North American stores into Kwik-E-Mart.^[17] Those stores, plus most of the over 6,000 other stores in North America, sold Buzz Cola, KrustyO's cereal (a version of Fruit Loops), Squishees, pink donuts, and other items from the show.^[18] Also, many regular items, such as coffee and sandwiches, had special Simpsons-themed wrapping and packages. As part of the movie promotion, 7-Eleven held Simpsons contests as well, which one entered by buying certain products in 7-Eleven stores. The "Kwik-E-Mart" promotion turned out to be a huge success for 7-Eleven, with Simpsons fans driving as far as hundreds of miles to buy the special themed merchandise.^[19] It also resulted in a 30% increase in profits for the converted 7-Elevens.^[20]

7-Eleven around the world

Australia

The first 7-Eleven in Australia opened on August 24, 1977 in the Melbourne suburb of Oakleigh. There are currently 385 stores in the states of Victoria, New South Wales and Queensland; the majority of stores are in metropolitan areas, particularly in CBD areas. Stores in suburban areas often operate as petrol stations. Stores are owned and operated as franchises, with a central administration.

Stores in Australia sell Slurpees in four sizes?Small, Medium and Large which are served in different coloured paper cups, and Super which is served in a clear plastic cup with a dome lid. Stores selling Slurpees have a machine dispensing four flavours?some stores have as many as four machines.

7-Eleven stores sell gift cards including three Prepaid VISA cards. There are daily newspapers, drinks, confectionary, and snack foods. They sell pre-prepared food such as sandwiches, wraps, pies, sausage rolls under their proprietary brand 'munch' delivered fresh into stores daily.

7-Eleven stores have partnered with BankWest and have BankWest ATMs in all of their stores.

On November 7, a free Slurpee is given to any customer saying Happy 7-Eleven Day to the person behind the counter between the hours of 7 a.m. and 11 p.m. It is unofficially known as '7-Eleven Day (7-11)'.

In March 2010, 7-Eleven ran a promotion where every customer who purchases fuel received a free small Slurpee.

Japan

7-Eleven in Sapporo, Japan.

Japan has more 7-Eleven locations than anywhere else in the world, where they often bear the title of its holding company "Seven & I Holdings". Of the 34,200 stores around the globe, 12,349 of them are located in Japan with 1,577 in Tokyo alone.

The feel and look of the store is somewhat different from that of the U.S. 7-Elevens. In Japan they offer a wider selection of products and services. Japanese 7-Elevens offer not only food, drinks, and magazines, but also video games and consoles, music CDs, DVDs, digital cardreaders as well as seasonal items like Christmas cakes, Valentine's Day chocolates, and fireworks. Slurpees and Big Gulp super size soft drinks are no longer sold in Japan; these products were not popular when 7-Eleven originally opened in Japan.

On September 1, 2005, Seven & I Holdings Co., Ltd., a new holding company, became the parent company of 7-Eleven, Ito Yokado, and Denny's Japan.

Taiwan

With the world's second highest 7-Eleven outlet density just behind Hong Kong, it is not an unusual scene in Taiwan for two 7-Eleven shops to stand face to face across an intersection.

In Taiwan, the 7-Eleven is the most popular convenience store, and is owned by The Uni-President Chain Store. The first store opened in 1980 and since then has grown to cover 4,807 stores as of June 9, 2008.^[21] Taiwan has the world's third largest collection of 7-Eleven convenience stores. With 6,200 potential shoppers per store, Taiwan also has the smallest number of potential shoppers per 7-Eleven convenience store (compared to Japan's 14,946 potential customers for each 7-Eleven and the United States' 48,359 customers for each store).

Malaysia

Malaysian 7-Elevens are owned by 7-Eleven Malaysia Sdn. Bhd. which now operates 1067 stores nationwide (as of Jan 2010). 7-Eleven in Malaysia was incorporated on June 4, 1984 by the Berjaya Group Berhad.

Philippines

7-Eleven in Angeles City, Philippines.

In the Philippines, 7-Eleven is run by the Philippine Seven Corporation (PSC). Its first store opened in 1984. In 2000, President Chain Store Corporation (PCSC) of Taiwan, also a licensee of 7-Eleven, bought the majority shares of PSC and thus formed a strategic alliance for the convenience store industry within the area.

Singapore

A 7-Eleven outlet in Singapore.

In Singapore, 7-Eleven forms the largest chain of convenience stores island-wide. There are at present 419 7-Eleven stores scattered throughout the country. Stores in Singapore are operated by the Dairy Farm International Holdings, franchised under a licensing agreement with 7-Eleven Incorporated, headquartered in the United States.

The first 7-Eleven stores in were operated in 1983 with a franchise license under the Jardine Matheson Group. The license was then acquired by Cold Storage Singapore, a subsidiary of the Dairy Farm Group, in 1989. At present, 7 Eleven plans to expand its base to include 300 stores, within the next few years. 7-Eleven has also recently signed an agreement with Royal Dutch Shell to include its convenience stores in all Shell Petrol Stations.

7-Eleven stores in Singapore operate around the clock, except for stores in Biopolis, hospitals, MRT Stations, some shopping centres, Raffles Junior College, Singapore Polytechnic, Republic Polytechnic and Nanyang Technological University, which have shorter operating hours.

South Korea

7-Eleven has a presence in the South Korean convenience store market where it competes with Mini Stop, GS25 (formerly LG25), Family Mart and independent competitors. There are 1,750 7-Eleven stores in Korea, with only the United States, Japan, Taiwan and Thailand hosting more stores. Korean stores no longer carry branded products such as Slurpee or Big Gulp.

Thailand

The franchise in Thailand is the Charoen Pokphand Group, which in turn grants franchises to operators. There are more than 5,000 7-Elevens in Thailand, 1,500 of which are in Bangkok, making Thailand have the 3rd largest number of stores after the US and Japan.

China

7-Eleven has been operating in mainland China in cities including Beijing, Shanghai, Tianjin, Shenzhen and Guangzhou, since 2008. Some stores were open since 1996. It offers little or no brand name items like Slurpee. However, the locations here offer a rather wide array of warm food, including traditional items like baozi. Also sold are some beverages, alcohol, candy, periodicals, and other convenience items. As of April, 2009, there were 591 7-Eleven locations in mainland China.^[22] Although Beijing locations were originally planned to be open "from 7:00 am until 11:00 pm, to suit the lifestyle of Beijingers",^[23] the majority are open 24 hours every day.

Hong Kong and Macau

7-Eleven has operated in Hong Kong since 1981 under the ownership of Dairy Farm. The company opened its 711th Hong Kong store July 11 (7-Eleven Day), 2006, in the Causeway Bay district of the city.^[24] With most locations being in urbanized areas, approximately 40 percent are franchised stores. In September 2004, Dairy Farm acquired Daily Stop, a convenience store chain located mainly in the territory's MTR stations, and converted them to 7-Eleven stores immediately upon takeover.

7-Eleven entered the Macau market in 2005, and now has more than 30 stores in operation.

Scandinavia

7-Eleven in Lund, Sweden.

The owner of the master franchise for 7-Eleven in Scandinavia is Reitan Servicehandel, a part of the Norwegian retail group Reitan Group. All stores are franchised, and 7-Eleven often tries to place the stores on corners in city centers. After Reitangruppen bought the filling station chain HydroTexaco (now YX Energy) in Norway and Denmark in 2006 it has announced that several of the stores at the filling stations will be rebranded 7-Eleven, others will remain under the YX-concept.

7-Eleven in Bergen, Norway.

In Norway, the first 7-Eleven was opened at Gr�nerl�kka in Oslo on September 13, 1986. As of April 1, 2008, there are 98 7-Eleven stores in Norway, more than half of these are in Oslo. Norway has the northernmost 7-Eleven in the world, situated in Troms�. On a per-capita basis, Norway for example has one 7-11 for every 47,000 Norwegians, versus, for example Canada which has one for evey 74,000 Canadians.

7-Eleven under church in Arendal, Norway.

The first Danish 7-Eleven was opened in �sterbro on September 14, 1993. As of September 1, 2009, there were 143 stores, mostly in Copenhagen, �rhus, Aalborg and Odense.

7-Eleven on Str�get, Copenhagen.

Reitan Servicehandel Sverige has the license in Sweden. In the mid-1990s, 7-Eleven in Sweden received adverse publicity, resulting in many stores being sold and closed down. For a time there were only 7-Elevens in Stockholm and Gothenburg. 7-Eleven returned to the south of Sweden in 2001 when a convenience store opened in Lund. As of the end of 2008, there are 77 7-Elevens in Sweden: most of them in Stockholm, 16 in Gothenburg, 8 in southern Sweden (including two in Lund, two in Helsingborg, three in Malm� and one located at Malm� Airport/Sturup). After an agreement with Shell on August 27, 2007, 112 Shell Select-outlets will be remade into 7-Eleven as of April 2009.

United States

7-Eleven currently has a total of 5,900 owned, operated and franchised stores in the U.S. with 4,550 of those as franchises?about 77%.^[25]

Once ubiquitous, 7-Eleven stores are no longer found in some Midwestern and Southeastern states. 7-Eleven has never operated in the Tulsa, Oklahoma area due to an agreement between the owner of the aforementioned independently-run 7-Eleven stores and the owner of Tulsa-based QuikTrip not to compete in each other's markets.^[26] In May 1998, it was announced that 113 7-Eleven stores would be sold and converted into Kum & Go stores. In this same time frame, 7-Eleven exited the Minnesota market and sold all its Minnesota stores to SuperAmerica. This led to situations, especially in larger cities like Minneapolis and Saint Paul, where multiple SuperAmerica locations could be found on the same intersection. In states like Minnesota, Iowa, and Wisconsin, other convenience stores like SuperAmerica, QuikTrip, Kwik Trip, Casey's, and Speedway occupy the same market.

7-Eleven in Oklahoma City advertising the "Icy Drink". Outlets in Oklahoma do not sell the item under the traditional name "Slurpee".

The only independently owned 7-Eleven stores are located in the Oklahoma City, Oklahoma metropolitan area. About 100 stores are owned by the family of William C. Brown (currently run by son Jim Brown) under special arrangement with the company since 1953. William C. Brown's father was a business associate and family friend of John Thompson. "Bill" had recently graduated from the University of Notre Dame and struck out on a quest to find an area "ripe" for the concept. During his travels he met the Tulsa based QuikTrip chain owner who suggested OKC to Brown. Narrowing down the choices he decided upon Oklahoma and opened store #1 at 23rd & N. Portland in OKC. At their inception the Thompson family were part owners of the OKC stores but never the Corporation. Brown would work a shift at the original store and afterwards would scout new locations to build. The "Oh Thank Heaven for 7-Eleven" phrase was coined by Brown's advertising agency in OKC and shared with the national chain. These stores carry a slightly different product selection than other 7-Eleven stores in the U.S. They do not serve hot dogs or nachos, but have their own bakeries, called Seventh Heaven.^[27] Also, due to this agreement, they carry a non-7-Eleven branded product in lieu of the Slurpee, the Icy Drink, which is not to be confused with the ICEE.^[28] The one side effect to this arrangement is that national advertising campaigns and promotions (e.g. movie marketing tie-ins) cannot be used.

In the Pennsylvania market — a market noted for innovation within the convenience store industry — 7-Eleven competes with Turkey Hill from Lancaster, Wawa from the Philadelphia area, and Sheetz from Altoona. 7-Eleven has no presence in the Altoona-State College-Johnstown area because of Sheetz,^[29] but is predominant in the Pittsburgh region where Sheetz also dominates, as well as South Central Pennsylvania around the state capital of Harrisburg. 7-Eleven is also absent in several cities in Texas, even though the United States headquarters is based there. In North Carolina, 7-Elevens are only seen in the northeastern part of the state, as part of the Hampton Roads market. In the rest of the state, there are several equivalents. 7-Eleven has little to no presence in the Albany, NY market due to the prominence there of Stewart's Shops, a local chain.

In 1987, Southland acquired High's Dairy Stores of Maryland, Virginia, and Washington, D.C., many of which were converted to 7-Elevens.

In March 2007, it was announced that 7-Eleven would sell its corporately-owned stores in northern Texas and in Florida to franchisees ^[30]; the chain has been franchising stores since 1964. The sale will make 7-Eleven virtually a franchise-only operation in six years.

7-Eleven is moving toward franchising most of its remaining corporate locations inside the United States. The 7-Eleven franchise system splits the gross profits 50/50 or close to it, between the company and the individual franchisee. The initial 7-Eleven franchise term is 15 years. The franchise fee and other upfront fees collected by 7-Eleven from a newly approved franchisee, in addition to ongoing 50:50 sharing of profits, is not transferable to another incoming franchisee in the same store, for the unexpired portion, if any, of the current 15 year contract. For example if one pays full franchise fee for 15 years and has to leave the store after one year due to any reason, they stand to lose the franchise fee for the remaining 14 years of their term.

Supermarket News ranked 7-Eleven's North American operations No. 11 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $15.0 billion.^[31] Based on 2005 revenue, 7-Eleven is the twenty-fourth largest retailer in the United States.^[32].

Partnership with Citgo

In the United States, many 7-Eleven locations used to have filling stations with gasoline distributed by Citgo, which in 1983 was purchased by Southland Corporation (and 50% of Citgo was subsequently sold in 1986 to Petr�leos de Venezuela, S.A. and the remaining 50% in 1990). Although Citgo was the predominant partner of 7-Eleven, other oil companies are also co-branded with 7-Eleven, including Fina, Exxon, Marathon, BP, and Pennzoil. Alon USA is the largest 7-Eleven licensee in North America. The latter of the group signed an agreement to cobrand with 7-Eleven at their remaining filling stations in 2003 following Shell's takeover of Pennzoil-Quaker State the year before.

Sign on a 7-Eleven filling station pump.

On September 27, 2006, 7-Eleven announced its 20-year contract with Citgo was coming to an end and would not be renewed. 7-Eleven Spokeswoman Margaret Chabris said "Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president Hugo Ch�vez. Certainly Ch�vez's position and statements over the past year or so didn't tempt us to stay with Citgo." Later she said that "People are making it out to be more than it is."^[33] Citgo's Chief Executive Felix Rodriguez responded with a correction the following day, accusing 7-Eleven of exploiting the situation to score political points against Chavez, and pointing out that Citgo's decision to terminate the contract with 7-Eleven had been made in July, for practical and economic reasons: ?[The reports are] a manipulation because ever since the month of July have we announced that we did not intend to renew a contract with 7-Eleven, which was 20 years old and that was part of a bad business deal for Venezuela."^[34] A statement found on Citgo's homepage stated, "The 7-Eleven contract did not fit within CITGO's strategy to balance sales with refinery production after the sale of its interest in a Houston area refinery."

At locations that have already phased out Citgo fuel, 7-Eleven is no longer accepting Citgo's credit cards. 7-Eleven stores that have removed the Citgo sign usually replace it with an "Oh Thank Heaven!" or "Fast and Fresh" sign on the main sign display, and simply place the 7-Eleven logo on the canopy over the pumps.

Canada

A 7-Eleven Store with gas station in Woodstock, Ontario, Canada.

In Canada, a limited number of 7-Eleven locations have filling stations with gasoline distributed by Shell Canada, Petro-Canada, or Esso. In November 2005, 7-Eleven started offering a wireless service called Speak Out Wireless. They also usually have Canadian Imperial Bank of Commerce ATMs. The first 7-Eleven store to open was in Calgary on June 29, 1969. There were 462 7-Eleven stores as of January 1, 2009.^[35] Winnipeg has the world's largest number of slurpee consumers, with an estimated 1,500,000 slurpees sold since the first 7-Eleven opened on March 21, 1970. All 7-Eleven locations in Canada are corporately operated.^[36]

7-Eleven abandoned the Ottawa market as of December 2009 selling all its six outlets there to regional convenience chain Quickie. Following concerns over the fate of 7-Eleven's popular discount mobile phone plan SpeakOut, Quickie offered to assume existing SpeakOut customers and phones into its Good2Go cellphone program.^[37]^[38]

Mexico

In Mexico, 7-Eleven was called Super 7. In 1995, the name changed to 7-Eleven. When stores are located within classic buildings (such as in Historic Center) or important buildings, the logo at the entrance shows no colors; instead, letters are golden or silver. Main competitors in Mexico are OXXO (Femsa), Super City (Soriana) and other local competitors. Near 2007, has started a new intense expansion over Mexico City and other parts of the country to copy OXXO's strategy.

Rankings

7-Eleven has been consistently ranked in Entrepreneur's Franchise 500^[39], most recently being selected as the #1 overall franchise. In addition, they were also ranked #38 in Fastest-Growing Franchises^[40] and #2 in Low Cost Franchises.^[41]

In 2008, 7-Eleven was named the number one franchise by Entrepreneur, beating out Subway, who had held the number one spot for 15 years ^[42].

The name

The company's first convenience outlets were known as Tote'm stores since customers "toted" away their purchases, and some even sported genuine Alaskan totem poles in front. In 1946, Tote'm became 7-Eleven to reflect the stores' new, extended hours?7 a.m. until 11 p.m., seven days a week. Today those store hours are no longer relevant. The company's corporate name was changed from The Southland Corporation to 7-Eleven, Inc. in 1999.^[43]