7-Eleven to Close 444 C-Stores in North America

Convenience-store giant 7-Eleven plans to close 444 underperforming stores in North America, parent company 7 & i Holdings revealed in an earnings presentation Thursday.

The chain is struggling with the same inflationary pressures that are impacting traffic and sales at restaurants, plus a decline in demand for cigarettes. Traffic at North American 7-Eleven locations has been negative since early last year and fell 7.3% in August.

As a result, the company downgraded its U.S. profit guidance for the year and said it will close weaker stores. The closures are expected to deliver a $30 million operating income benefit this year and a $110 million boost to annualized run rate, according to the presentation.

The chain also has a deal to sell some North American properties in a $750 million sale-leaseback that will net it a profit of $520 million. It did not say how many locations were involved in that transaction.

“Aligned with our long-term growth strategy, we continuously review and optimize our portfolio to deliver convenience where, when and how customers need it,” 7-Eleven, Inc. said in a statement. “As part of this, we made the decision to optimize a number of non-core assets that do not fit into our growth strategy. At the same time, we continue to open stores in areas where customers are looking for more convenience.”

Irving, Texas-based 7-Eleven has more than 13,000 U.S. locations and is the largest convenience-store chain in the country. Its scale and array of prepared food make it a serious competitor for restaurants.

The closures come amid a broader strategic shift for Tokyo-based 7 & i as it works to fend off a takeover bid by rival Alimentation Couche-Tard, the owner of Circle K. The deal would bring together the two largest c-store chains in the country.

Earlier this week, Couche-Tard raised its offer to acquire Seven & i from $14.86 per share, or approximately $39 billion, to $18.19 per share, or approximately $47.2 billion.

On Thursday, 7 & i announced that it is creating a separate company for its non-convenience-store businesses, such as supermarkets and specialty stores, so that it can focus more on c-stores. The spun-off company will be called York Holdings Co.  

To further illustrate its c-store focus, 7 & i is also considering changing its name to 7-Eleven Corp.

This story was originally featured on CSP Daily News, a sister publication of Supermarket News.