Keyes Outlines 7-Eleven's Northeast Expansion

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Keyes Outlines 7-Eleven's Northeast Expansion

BOSTON -- 7-Eleven Inc. CEO Jim Keyes is setting out to make his locations in New England the model for the entire Dallas-based convenience store chain.

At Keyes' direction, 7-Eleven, which currently has 22 stores in the Greater Boston area, is launching an expansion push designed to add 60 area stores over the next three years.
Currently, 7-Eleven has a total of 97 locations in Massachusetts, all of which are operated by franchisees, reports the Boston Business Journal. Most of the new stores -- as many as 30 of which Keyes, a New England native, hopes to build by the end of the year -- will be located in Boston itself.

"I have a lot of pride in my Massachusetts roots. It was and always will be my home," says Keyes, who took the helm of 7-Eleven in April 2000. The local expansion plan is part of a targeted growth strategy that seeks to substantially increase the number of 7-Eleven stores in Boston, Chicago and Florida.

7-Eleven officials chose Boston and Chicago because of a preponderance of high-tech and medical-field professionals in the two cities: "Industries that are populated by time-starved individuals needing convenience," says Keyes, who added that the cities are perfect for the "new" 7-Eleven.

That "new" prototype store is about half the size of the traditional convenience store -- 1,500 square feet compared with 3,000 square feet -- and places an emphasis on fresh foods, such as the company's Big Eats deli line. Keyes added that each store will receive daily deliveries from 7-Eleven's third-party fresh-food distribution center in Franklin, Mass. The center, which is run by Temple, Texas-based McLane Co. Inc., has been serving the Boston-area stores since 2001, the report said.

The expansion comes after a particularly difficult year for the 75-year-old chain. Net earnings in 2002 were $12.8 million, compared with $83.7 million in 2001. The company blamed an anticipated reduction of royalties from its Japanese licensee and accounting charges. The company closed 133 underperforming stores in 2002. However, things appear to be improving so far this year.

For the first quarter, which ended March 31, 7-Eleven reported net earnings of $5 million, compared with a net loss of $38.6 million for the same period a year ago. For the year-to-date through May, sales at stores open more than a year increased 3.9 percent compared with a 3.2 percent increase for the year-ago period.