7-Eleven's Fresh Food Focus Starts to Pay Off

CHICAGO -- Convenience stores continue to shed past perceptions, and 7-Eleven Inc. is no different. The Dallas-based retailer has made a big push into the fresh food business and the effort seems to be working.

As one local resident told the Chicago Tribune, stopping by a downtown 7-Eleven for a bite to eat before heading to work fits into his schedule. "I like it because it's quick. I don't have a lot of time," Andre Holden said as he bought his usual pizza slice and fried mozzarella sticks. He said he pops into the c-store about three times a week.

7-Eleven hoped to win this type of shopping trip when it decided to pump up its fresh food offerings, including more healthy snacks. With more consumers willing to go to a convenience store for a quick meal, 7-Eleven seeks to build a name for itself in the competitive sector, much like Starbucks Corp. and Walgreen Co. have made bigger pushes into food. Fresh food sales help to offset declining tobacco sales, the newspaper reported.

Last week, 7-Eleven introduced an Egg White Breakfast Sandwich to its better-for-you lineup. The new 180-calorie sandwich -- made of egg whites, Canadian bacon and cheddar cheese on a whole-wheat English muffin -- contains 3 grams of protein, 5 grams of fat (2.5 grams of saturated fat) and is lower in sodium than most breakfast sandwiches on the market, as CSNews Online previously reported.

7-Eleven also recently introduced Pillsbury Cinnamon Rolls to its stores, marking the first time the convenience store chain has offered a warm bakery product and the first time Pillsbury-branded fresh bakery items have been available through a c-store retailer.

"There's been a major focus on the push for fresh foods," Kelly Buckley, vice president of fresh food innovation for 7-Eleven, told the Chicago Tribune. "We know that is an area where we have a competitive advantage. Part of our key differential here is we have fresh bakery items and cold sandwiches and wraps and cut fruit."

Roughly two years into the initiative, company executives are pleased with the results, the newspaper reported. Same-store fresh food sales grew 11 percent from 2009 to 2013. Overall, during the same period, fresh food sales grew 58 percent, largely because of the chain's store count growth.

7-Eleven decided two years ago to invest more in the development of fresh food. Buckley, who headed food innovation efforts at Applebee's and Pizza Hut, came aboard and assembled a team of food scientists, culinarians and engineers, according to the Chicago Tribune.

"We need to be looking broader in terms of what our future offerings are going to be to grow our business and play to our strengths," Buckley said.

Convenience stores own the out-of-home snacking market, so it makes sense for them to expand to meals, said Harry Balzer, chief industry analyst for The NPD Group in Chicago. "They've already got you for the snacks. They would really love it if you went there for main meals now," he told the newspaper. "A lot of places, including drugstores, supermarkets and supercenters, are offering prepared meals."

7-Eleven is trying to replicate the successes of Pennsylvania-based chains Wawa Inc. and Sheetz Inc. with customized sandwiches and prepared foods, said Darren Tristano, executive vice president at Technomic Inc., a Chicago-based food industry consultancy that puts the convenience store foodservice industry at about $11 billion.

"Convenience stores have had success and are increasing their foodservice because they have a strong advantage of convenience over fast-food restaurants," Tristano said. "Brands like 7-Eleven are increasing their investment in trying to take advantage of these opportunities. It's an evolution, and customers are beginning to recognize that c-stores are places where they can find quality, prepared foods."