7-Eleven Seizes Opportunity in Soft Real Estate Market
DALLAS -- Last year, 7-Eleven Inc. was not shy about its plans to grow. The company publicly declared that it was working to have a record growth year, adding at least 630 new U.S. and Canada stores. It ended 2012 with far more than that, adding a net 969 locations, of which 961 were U.S. additions.
"We are a strong company with a strong balance sheet, and strong companies grow," 7-Eleven spokesperson Margaret Chabris told CSNews Online when asked why the decision was made to set such an aggressive target. "We believed that with the real estate, mergers and acquisitions, and new store integration teams we had in place, this number was achievable."
7-Eleven's focus on maintaining a strong balance sheet before and during the recent financial crisis placed the convenience store giant on solid footing to grow, she further explained. Because of this, the retailer was able to be "opportunistic" and take advantage of a soft real estate market.
Approximately 60 percent of 7-Eleven’s growth in the United States last year resulted from several multi-store acquisitions. As CSNews reported throughout the year, 7-Eleven acquired:
- 143 stores in Texas from C. L. Thomas Inc.
- 12 stores in North Carolina from Fast Track Inc.
- 163 stores in Utah and Texas from TETCO Inc.
- 67 stores in Ohio and Pennsylvania from EZ Energy USA.
- 58 stores in Ohio, Pennsylvania, West Virginia and Maryland from Handee Marts.
- 74 stores in West Virginia, Ohio, Pennsylvania and Kentucky from Prima Marketing LLC.
- 51 locations in north Texas from ExxonMobil.
- 55 locations in North and South Carolina from Sam's Mart.
- 18 stores in Wisconsin from Open Pantry Food Marts of Wisconsin.
- 23 stores in north and central Texas from Strasburger Enterprises.
According to 7-Eleven, the chain's disciplined approach to growth resulted in purchases from those in the industry who decided the timing was right for them to sell their stores. The recent uncertainty and changes surrounding tax policy, health insurance costs and the capital intensity of the convenience industry led many c-store owners to consider exiting the business.
7-Eleven was in a position to seize these store development opportunities during a tough economic period when some retailers slowed or stopped growth altogether.
Building off the momentum of its record 2012 growth year, 7-Eleven is certainly planning further expansion this year. However, the retailer said it's still too early to tell whether 2013 will be another one for the record books. At the end of last year, 7-Eleven operated and franchised a total of 8,118 stores in North America -- 7,641 of those locations are in the U.S.
7-Eleven said it will continue to grow and be "opportunistic and diligent" about acquisition opportunities. It is too soon to say how many stores the chain expects to open this year, but the company will make sure it has an appropriate return on its investment.
As for whether the iconic c-store brand has an optimal store count in mind, 7-Eleven said it is "a flexible growth company," capable of developing stores in urban and suburban settings, with or without fuels, on or in airports, on or near college campuses, and at endcaps of shopping centers.
7-Eleven aims to serve the convenience needs of consumers around the world, and believes there is huge potential not just in the U.S., but in other parts of the world, too. The company and its licensees are currently in only 16 countries, so many more stores are feasible.
For more on 7-Eleven's growth strategy, check out the March issue of Convenience Store News.