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7-Eleven to Expand in Boston

BOSTON -- 7-Eleven Inc. plans to open 41 stores in Boston in the next three years, bringing its tally to nearly 70 in the city and transforming a landscape now dominated by mom-and-pop shops, reported the Boston Globe.

As 7-Eleven seeks to grow in Boston, real estate brokers and convenience store professionals say the Dallas retailer will run into the very obstacles that have kept other chains out: scarce real estate, neighborhood opposition and a city government that frowns on 24-hour-a-day operations.

But 7-Eleven has a novel strategy: good old-fashioned neighborliness. Before opening its newest Boston store last December in the South End, the chain agreed to nearly four pages of provisos from a neighborhood group. No red, orange, and green sign outside. No signature red stripe on the walls inside. A security guard in the store at all times.

In a world where brand identity separates failures from successes, why would 7-Eleven rid itself of the look and format that makes its 26,400 stores worldwide so recognizable? "We're a big company, but we're a neighborhood store," explained Ken Barnes, 7-Eleven's real estate manager.

Convenience stores depend on neighborhood residents and workers to fuel the annual $337 billion business. Though the industry's sales rose 16 percent last year, two key sales drivers -- gas and cigarettes -- are under attack, according to the National Association of Convenience Stores (NACS).

Most convenience stores depend on gas to drive traffic and sales under the theory that people fill up weekly, then come inside for cigarettes, sodas or snacks. But rising gas prices are cutting into profits, and gross margins on cigarettes are falling in the wake of the antismoking movement. As a result, many convenience stores are depending on food.

"It's a whole different mindset," said Jeff Lenard, spokesman for NACS. "You become a retailer that is a restaurant."

In addition to Boston, the chain is also pushing into Chicago, Los Angeles and New York. Taking into account foot traffic and competition, the chain's analysts determined Boston could support about 70 7-Elevens. By comparison, there are about 25 Store24s and eight White Hen Pantrys in Boston.
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