7-Eleven Rolls Out Urban Strategy in Chicago

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7-Eleven Rolls Out Urban Strategy in Chicago

CHICAGO -- As residential condos sprout along the elegant Loop in the Windy City, 7-Eleven intends to be close by.

The Dallas-based chain is opening its ninth downtown convenience store today introducing products like Go-Go Taquitos, Santiago beer and a low-calorie Slurpee to a full-service unit in the Sterling condominium building. The company plans to build four other stores downtown this year, but will not reveal their locations. Key to the expansion is a new urban strategy developed in Asia, according to The Chicago Sun-Times.

The stores resemble British sandwich shop Pret A Manger, with sandwiches and other fresh foods accounting for half their sales, 7-Eleven President and CEO Jim Keyes said in an interview with the newspaper Tuesday. Chicago's rapid high-rise growth calls for just such grab-and-go convenience.

"The more fast-paced and fast-moving Chicago becomes, the more time-pressed people are," Keyes said.

The urban stores -- most with no parking lots -- are designed to blend with the local architecture, the report said. They have no gasoline stations, sport a prominent coffee bar, sell fresh fruit and nutrition bars, and are roughly half the size of rural and suburban stores --1,200 to 1,500 square feet compared with the traditional 3,000 to 5,000 square feet. Trucks deliver fruit, sandwiches and other food as many as three times a day.

7-Eleven is working with its suppliers to develop new types of foods and flavors to appeal to the city's strong multicultural population.

Industry players competing in Chicago range from mom-and-pop operators to major retail chains, including oil giant BP with its remodeled BP Connect convenience stores and grocery chains that sell gasoline, such as Jewel-Osco. But 7-Eleven sees a growth opportunity especially since Clark Retail Group, which filed for Chapter 11 bankruptcy protection last October, is selling its Clark gas stations and White Hen convenience stores.

Crain's Chicago Business reported this week that possible buyers of the White Hen stores in the Chicago area are Alimentation Couche-Tard Inc., a Canadian convenience store operator, and Dearborn Wholesale Grocers, White Hen's supplier and the largest wholesale grocery distributor in Chicago.

Heightened competition and savvier sales techniques are forcing convenience store operators to become merchandisers, said Kit Case, senior vice president and associate director of research for Southwest Securities, a Dallas-based investment bank. In the old days, a store on a busy corner did just fine.

"That's not the case any more," Case said.