7-Eleven to Test Consolidated Beverage Deliveries

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7-Eleven to Test Consolidated Beverage Deliveries

DALLAS -- A widely publicized goal of 7-Eleven President and CEO Joe DePinto may be on track to become a reality, as the convenience chain plans to test centralized distribution for bottled and canned beverage deliveries at 300 stores in Los Angeles in 2009, according to a report in The Dallas Morning News, citing DePinto’s speech at the Southern Methodist University's Cox School of Business Ernst & Young Management Briefing Series.

The average 7-Eleven gets 62 deliveries a week, including 18 to 20 deliveries alone from beer and packaged beverage makers such as Anheuser-Busch and Coca-Cola. "This creates a challenge for a store," he said.

"It's very inefficient when we have one vendor's truck on the lot and a second vendor on the lot waiting to get into the store," DePinto told Convenience Store News earlier this year. "Who is paying for that second vendor to sit and wait on the lot? We all—the distributor, the retailer and the consumer—are ultimately paying for it."

If trips were consolidated through a central location, deliveries would be more accurate, shoppers would be less inconvenienced by delivery trucks on store lots, and fuel costs would be lower, DePinto said during the seminar.

If the Los Angeles test is a success, 7-Eleven could also consolidate distribution for groceries, frozen foods, and newspapers and magazines, he added.

The Los Angeles test would not be the first time 7-Eleven sought to change the distribution model. Convenience Store News reported in July that the company has successfully consolidated its fresh foods delivery system and is using the same approach with other major product categories by reducing the number of deliveries each store gets and the number of vendors delivering to each store.

"We recognize there are many redundancies in the current distribution model," he told CSNews at the time. "Because of the current economic times, and the rising costs of fuel and labor, we are committed to changing the model now to meet consumer and store needs."

Outside of the distribution chain, 7-Eleven is focusing on growth by building stores, acquiring regional chains and converting existing operators to the 7-Eleven banner through a business conversion plan.

About 75 independent operators have converted under the program. After a conversion, sales at those locations have increased from 40 to 100 percent, according to DePinto.

"We think we have a home run with this program," he said.

In addition, a $1 billion multiyear remodeling program is calling for all U.S. stores to be updated, one-third of which will be done by year-end, the report stated.