7-Eleven to Expand in North America

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7-Eleven to Expand in North America

TOKYO -- Seven-Eleven Japan Co. plans to expand the number of 7-Eleven stores throughout North America by utilizing some successful formulas that have worked in Japan, the Japan Times reported.

One such strategy is increasing store density in profitable areas by more effectively luring in customers with new products, such as more fresh-food varieties, the report stated.

"We've known that fresh food is an opportunity, but what we really learned from Japan is how to operationalize that and make it efficient," Darren Rebelez, the U.S. subsidiary's chief operating officer and senior vice president, told the paper at a recent launch of its green commissary and combined distribution center in Bohemia, N.Y. For more on this facility, see CSNews Online's report by clicking here.

The new center supplies food products to 674 7-Eleven stores in New York, New Jersey and Pennsylvania each day, the report stated.

"Operations like this are something that they have throughout Japan because of the much higher store density," Rebelez told the paper, explaining how Japan, which is roughly the size of California, has almost twice as many stores as the United States, Canada and Mexico combined.

7-Eleven's Japanese counterpart built up its market concentration and streamlined its logistics infrastructure to the extent that it refined a "type of synergy over a number of years, and we are taking advantage of that," he added.

And Japanese have a greater tendency to eat out more often, which translates into a greater demand by customers for fresher and more innovative entree selections that stores must cater to, he explained.

"Conceptually, we can take those same concepts that they use there and apply them here in our market concentration strategy," he told the Japan Times.

In North America, there are some 7,700 stores, but executives see the promise of new business opportunities, according to the report.

Masaaki Asakura, 7-Eleven Inc.'s executive vice president in charge of international operations, told the paper there is potential for growth in the North American market that no longer exists to the same degree in Japan.

Profitable regions with higher populations and greater disposable incomes include the New York and Los Angeles areas, as well as areas in Florida and Virginia.

"The time has come for the U.S. market," he told the Times. "That is why opportunity here is greater than in Japan because they are saturated in Japan -- yes they can grow, but not at the speed they used to have," he told the paper.

A short-term plan will add 150 to 200 new stores in North America over the next three to four years, with 20 stores planned to be opened in the New York area this year, the report stated.

In the U.S. there is a focus on a "Japanese way" of approaching existing businesses to convert them to 7-Eleven stores rather than purchasing properties and finding franchisees, which is known as 7-Eleven's Business Conversion Program, the report stated.

Within this, there is an interest in targeting family-run U.S. gas stations as well as other existing small businesses, Asakura said, adding he hoped to emulate Japan's rapid buildup of stores with that strategy.