7-Eleven

For other uses, see 7-Eleven (disambiguation).
7-Eleven, Inc.
Subsidiary
Industry Retail (convenience stores)
Founded 1927 (1927) (as Tote'm Stores)
Founders Joe C. Thompson Sr. (1901–1961), Claude S. Dawley, John Jefferson, John Philp Thompson, Sr., Jere W. Thompson Sr., and Joe C. Thompson Jr.
Headquarters Irving, Texas, U.S.
Number of locations
 56,600
Key people
 Joe DePinto (CEO) (President)
Stanley Reynolds (Executive Vice president) (CFO)
Products Slurpee beverage
Big Gulp beverage cup
Other products include: coffee, candy, prepared foods, gasoline, dairy, various assortment of beverages
Number of employees
 45,000 (2010 NA)?
Parent Seven & I Holdings Co.
Website 7-eleven.com
7andi.com
sej.co.jp

7-Eleven is an international chain of convenience stores that operates, franchises, and licenses some 56,600 stores in 18 countries.[1] The chain was originally known as Tote'm Stores until renamed in 1946. 7-Eleven Inc. is headquartered in Irving, Texas. Its parent company, Seven-Eleven Japan Co., Ltd., is located in Chiyoda, Tokyo.[2] Seven-Eleven Japan is held by the Seven & I Holdings Co.[3]

Etymologies

The company's first outlets were named "Tote'm Stores" because customers "toted" away their purchases. Some stores featured genuine Alaskan totem poles in front of the store. In 1946, the chain's name was changed from "Tote'm" to "7-Eleven" to reflect the company's new, extended hours, 7:00 am to 11:00 pm, seven days per week.[4] In November 1999, the corporate name of the US company was changed from "The Southland Corporation" to "7-Eleven Inc.".[5][6]

History

In 1927, Southland Ice Company employee John Jefferson Green began selling eggs, milk, and bread from one of 16 ice house storefronts in Dallas, with permission from one of Southland's founding directors, Joe C. Thompson, Sr.[7] Although small grocery stores and general merchandisers were available, Thompson theorized that selling products such as bread and milk in convenience stores would reduce the need for customers to travel long distances for basic items. He eventually bought the Southland Ice Company and turned it into Southland Corporation, which oversaw several locations in the Dallas area.[4]

In 1928, Jenna Lira brought a totem pole as a souvenir from Alaska and placed it in front of the store. The pole served as a marketing tool for the company, as it attracted a great deal of attention. Soon, executives added totem poles in front of every store and eventually adopted an Inuit-inspired theme for their stores. Later on, the stores began operating under the name "Tote'm Stores". In the same year, the company began constructing gasoline stations in some of its Dallas locations as an experiment. Joe Thompson also provided a distinct characteristic to the company's stores, training the staff so that people would receive the same quality and service in every store. Southland also started to have a uniform for its ice station service boys. This became the major factor in the company's success as a retail convenience store.

In 1931, the Great Depression affected the company, sending it toward bankruptcy. Nevertheless, the company continued its operations through re-organization and receivership. A Dallas banker, W.W. Overton Jr., also helped to revive the company's finances by selling the company's bonds for seven cents on the dollar. This brought the company's ownership under the control of a board of directors.[8]

In 1946, in an effort to continue the company's post-war recovery, the name of the franchise was changed to 7-Eleven to reflect the stores' new hours of operation, which were unprecedented at the time. In 1969, 7-Eleven experimented with a 24-hour schedule in Austin, Texas, after an Austin store stayed open all night to satisfy customer demand.[4] Later on, 24-hour stores were established in Fort Worth and Dallas, Texas, as well as Las Vegas, Nevada.[9] In 1971, Southland acquired convenience stores of the former Pak-A-Sak chain owned by Graham Allen Penniman, Sr. (1903–1985), of Shreveport, Louisiana.[10][11]

Video of the inside of a Floridian 7-Eleven store in 1987.

With the purchase in 1964 of 126 Speedee Mart franchised convenience stores in California, the company entered the franchise business. The company signed its first area licensing agreement in 1968 with Garb-Ko, Inc. of Saginaw, Michigan, which became the first US domestic area 7-Eleven licensee.

In the late 1980s, Southland Corporation was threatened by a rumored corporate takeover, prompting the Thompson family to take steps to convert the company into a private model by buying out public shareholders in a tender offer.[12] In December 1987, John Philp Thompson, the chairman and CEO of 7-Eleven, completed a $5.2 billion management buyout of the company.[13] The buyout suffered from the effects of the 1987 stock market crash and after failing initially to raise high yield debt financing, the company was required to offer a portion of stock as an inducement to invest in the company's bonds.[14][15]

Various assets, such as the Chief Auto Parts chain,[16] the ice division,[17] and hundreds of store locations,[18] were sold between 1987 and 1990 to relieve debt incurred during the buyout. This downsizing also resulted in numerous metropolitan areas losing 7-Eleven stores to rival convenience store operators. In October 1990, the heavily indebted Southland Corp. filed a pre-packaged Chapter 11 bankruptcy in order to transfer control of 70% of the company to Japanese affiliate Ito-Yokado.[19]

Southland exited bankruptcy in March 1991, after a cash infusion of $430 million from Ito-Yokado and Seven-Eleven Japan. These two Japanese entities now controlled 70% of the company, with the founding Thompson family retaining 5%.[20] In 1999, Southland Corp. changed its name to 7-Eleven, Inc., citing the divestment of operations other than 7-Eleven.[21] Ito-Yokado formed Seven & I Holdings Co. and 7-Eleven became its subsidiary in 2005. In 2007, Seven & I Holdings announced that it would be expanding its American operations, with an additional 1,000 7-Eleven stores in the United States.

For the 2010 rankings, 7-Eleven climbed to the No. 3 spot in Entrepreneur Magazine's 31st Annual Franchise 500, "the first and most comprehensive ranking in the world". This was the 17th year 7-Eleven was named in the top 10.

Also in 2010, the first "green" 7-Eleven store opened in DeLand, Florida. The store features U.S. Green Building Council's (USGBC) Leadership in Energy and Environmental Design (LEED) elements. Also, the environmentally-friendly design brings the store savings in energy costs. That same year, 7-Eleven went mobile with the launch of the iconic Slurpee drink's iPhone and Android Application (App). The Slurpee drink app made it easy to find 7-Eleven stores and provides driving directions. The following year, 7-Eleven celebrated its 40,000th store opening and within two years of that milestone opened its 50,000th store.

Products and services

1.2-liter (41 U.S. fl oz) Super Big Gulp

7-Eleven in the United States sells Slurpee[22] drinks, a partially frozen soft drink introduced in 1967,[23] and Big Gulp beverages, introduced in 1976.[24][25] Other products include: 7-Select[26] private-brand products,[27] coffee, fresh-made daily sandwiches, fresh fruit, salads and bakery items, hot and prepared foods, gasoline, dairy products, carbonated beverages and energy drinks, juices, financial services and product delivery services.

7-Eleven is known for their relatively large drink sizes. 7-Eleven commonly offers beverages that are 32 ounces (Big Gulp), 53 ounces (X-Treme Gulp), 64 ounces (Double gulp) or 128 Ounces (Team Gulp). These beverage sizes were all among the largest commonly sold sodas when they were introduced. [28] 7-Eleven has been commonly associated with these very large sodas in popular culture. For example, Mayor Michael Bloomberg's proposed ban on large sodas in New York City was commonly nicknamed the Big Gulp ban. [29]

Global

Countries with 7-Eleven stores

Asia

China

7-Eleven in Yuexiu District, Guangzhou, China

7-Eleven opened its first store in China in Shenzhen, Guangdong in 1992 and later expanded to Beijing in 2004, Chengdu[30] and Shanghai in 2011, Qingdao in 2012, and Chongqing in 2013. In China's 7-Eleven stores where Slurpees are offered, the Chinese name 思乐冰 (sīlèbīng) is used. They also offer a wide array of warm food, including traditional items like steamed buns, and stores in Chengdu offer a full variety of onigiri (饭团). Beverages, alcohol, candy, periodicals, and other convenience items are available as well. The majority of these stores are open for 24 hours a day.

Hong Kong

7-Eleven in Shek Tong Tsui, Hong Kong

7-Eleven has operated in Hong Kong since 1981 under the ownership of Dairy Farm. With most locations being in urbanized areas, approximately 40 percent are franchised stores. In September 2004, Dairy Farm acquired Daily Stop, a convenience-store chain located mainly in the territory's MTR stations, and converted them to 7-Eleven stores. As of 2009, Hong Kong has 950 7-Eleven stores and has the second-highest density of 7-Eleven stores after Macau, with one outlet per 1.16 square kilometres (0.45 sq mi).

Indonesia

In 2008, 7-Eleven announced plans to expand its business in Indonesia through a master franchise agreement with Modern Sevel Indonesia and Media Nusantara Citra. Modern Sevel Indonesia's initial plans were to focus on opening stores in Jakarta, targeting densely populated commercial and business areas. Other major cities, such as Bandung, Semarang, and Surabaya have been identified as expansion opportunities.[31] There are 190 7-Eleven stores in Indonesia as of 2014.

Japan

Japan's first 7-Eleven store in Kōtō, Tokyo opened in May 1974

Japan has more 7-Eleven locations than anywhere else in the world, where they often bear the title of its holding company "Seven & I Holdings". Of the 59,831 stores around the globe, 18,785 stores (31 percent of global stores) are located in Japan,[32] with 2,423 stores in Tokyo alone.[33] On September 1, 2005, Seven & I Holdings Co., Ltd., a new holding company, became the parent company of 7-Eleven, Ito-Yokado, and Denny's Japan.

The aesthetics of the store are somewhat different from that of 7-Eleven stores in other countries as the stores offer a wider selection of products and services. Following the example of other convenience stores in Japan, 7-Eleven has solar panels and LEDs installed in about 1,400 of its stores.[34]

Macau

7-Eleven entered the Macau market in 2005 under the ownership of Dairy Farm, the same conglomeration group operating Hong Kong's 7-Eleven. With only 25.9 square kilometers, Macau has 45 stores, making it the single market with the highest density of 7-Eleven stores, containing one store per 0.65 square kilometers.

Malaysia

A 7-Eleven store in George Town, Penang, Malaysia

Malaysian 7-Eleven stores are owned by 7-Eleven Malaysia Sdn. Bhd., which now operates 2,000 stores nationwide (as of July 2016). 7-Eleven in Malaysia was incorporated on June 4, 1984, by the Berjaya Group Berhad. The first 7-Eleven store was opened in October 1984, in Jalan Bukit Bintang, Kuala Lumpur. It's popular in Sandakan and Kota Kinabalu because their prices are cheaper. In Sandakan the Slurpee beverage is popular among teen and kids.[35][36]

Philippines

7-Eleven in Angeles City, Philippines

In the Philippines, 7-Eleven is run by the Philippine Seven Corporation (PSC). Its first store, located in Quezon City, opened in 1984. In 2000, President Chain Store Corporation (PCSC) of Taiwan, also a licensee of 7-Eleven, purchased the majority shares of PSC and thus formed a strategic alliance for the convenience store industry within the area. At the end of 2015, 7-Eleven stores totaled 1,602, up 25 percent from 1,282 stores in end-2014. A total of 1,391 7-Eleven stores are in Luzon, 178 in Visayas, and 33 in Mindanao.[37]

Singapore

A 7-Eleven in Singapore

In Singapore, 7-Eleven forms the largest chain of convenience stores island-wide. There are currently 560 7-Eleven stores scattered throughout the country. Stores in Singapore are operated by Dairy Farm International Holdings, franchised under a licensing agreement with 7-Eleven Incorporated. The first 7-Eleven stores were opened in 1983 with a franchise license under the Jardine Matheson Group. The license was then acquired by Cold Storage Singapore, a subsidiary of the Dairy Farm Group, in 1989.

South Korea

7-Eleven at Godeok Station in Seoul, South Korea

7-Eleven has a major presence in the Republic of Korea convenience store market, where it competes with CU (store), GS25 (formerly LG25), and independent competitors. There are 8,146 7-Eleven stores in the Republic of Korea; with only Japan, the United States, and Thailand hosting more stores. The first 7-Eleven store in the Republic of Korea opened in 1989 in Songpa-gu in Seoul with a franchise license under the Lotte Group. In January 2010, Lotte Group acquired the Buy the Way convenience store chain and rebranded its 1,000 stores under the 7-Eleven brand.

Taiwan

Two 7-Eleven stores at the same intersection in Xindian District, New Taipei City, Taiwan

In Taiwan, 7-Eleven is the largest convenience store chain and is owned by President Chain Store Corporation under Uni-President Enterprises Corporation. The first store opened in 1979 and the 5,000th store was opened in July 2014.[38]

Thailand

A 7-Eleven store at Beach Road, Pattaya in Thailand
A 7-Eleven store at Sukhumvit, Bangkok in Thailand

The first store opened in 1989 on Patpong Road in Bangkok. The franchise in Thailand is the CP ALL Public Company Limited, which in turn grants franchises to operators. There are 8,334[39] 7-Eleven stores in Thailand as of 2013, with approximately 50% located in Bangkok. Thailand has the 2nd largest number of 7-Eleven stores after Japan .[40]

The company plans to spend five billion Thai baht to expand its business. Two billion will be used to open 500 new outlets, one billion to renovate existing stores, and the rest to develop a new distribution center in the East.[41]

United Arab Emirates

Seven & I Holdings announced in June 2014 that they had agreed a contract with Seven Emirates Investment LLC to open the first Middle Eastern 7-Eleven in Dubai, United Arab Emirates during the summer of 2015.[42][43][44] The company also said that they had plans to open about 100 stores in the country by the end of 2017.[42][44] The first store was opened in October 2015.

Europe

The first European 7-Eleven store was opened in Stockholm, Sweden in 1978.[45] 7-Eleven was available in Spain until 2000 with many stores inside Repsol petrol stations, as well as some other petrol-stations across the country. 7-Eleven stores are now solely located in the Scandinavian region of Europe.[46]

The owner of the master franchise for 7-Eleven in Scandinavia is Reitan Servicehandel, an arm of the Norwegian retail group, Reitan Group. After Reitangruppen bought the filling station chain, HydroTexaco (now YX Energy), in Norway and Sweden in 2006, it announced that several of the stores at the petrol stations would be rebranded as 7-Elevens and that the petrol would be[47] supplied by Shell. Other stores remain under the YX brand.

British Isles

During the 1980s, small 7-Eleven convenience stores were common in the larger towns and cities of the South Eastern UK. The first shop opened in London, in Sydenham South East London in 1985 [48] The company ceased trading operations in 1997, but considered resuming UK trading in 2014.[49]

Denmark

7-Eleven in Strøget, Copenhagen, Denmark

The first 7-Eleven store in Denmark was opened at Østerbro in Copenhagen on September 14, 1993. There are currently 196 stores, mostly in Copenhagen, Aarhus, Aalborg, and Odense, including 8 stores at Copenhagen Central Station. In Denmark, 7-Eleven has an agreement with Shell, with a nationwide network of Shell/7-Eleven service stations, and an agreement with DSB to have 7-Eleven stores at most S-train stations.

Norway

7-Eleven in Bergen, Norway

The first 7-Eleven store in Norway was opened at Grünerløkka in Oslo on September 13, 1986. As of January 2012, there are 162 7-Eleven stores in Norway, more than 50% located in Oslo. Norway has the northernmost 7-Eleven in the world, situated in Tromsø. On a per-capita basis, Norway has one 7–Eleven store for every 47,000 Norwegians, compared to Canada, which has one for every 74,000 Canadians.

Sweden

7-Eleven at Mårtenstorget in Lund, Sweden

Reitan Servicehandel Sverige has held the license in Sweden since December 1997. In the mid-1990s period, 7-Eleven in Sweden received adverse publicity due to the unfavourable labour contracts offered by its then-licensee, Small Shops, an American-based company, resulting in many stores being sold and closed down. For a time, there were only 7-Elevens in Stockholm and Gothenburg.

7-Eleven returned to the south of Sweden in 2001, when a convenience store opened in Lund. Later in the 2000s, the Swedish 7-Eleven chain was involved in controversy when the Swedish TV channel TV3 exposed widespread fraud on the part of Reitan Servicehandel in its management of the 7-Eleven franchise, which Reitan Servicehandel eventually admitted to on its website.

Turkey

7-Eleven entered the Turkish market in 1989, opening its first store on September 11.[50] Major stakeholder of the master franchise, Özer Çiller sold his shares in 1993, after his wife Tansu Çiller became the Prime Minister.[51] In the 2010s, 7-Eleven left the Turkish market, transferring most of its stores to franchise owners.

North America

Canada

A 7-Eleven store with gas station in Woodstock, Ontario, Canada

The first 7-Eleven store to open in Canada was in Calgary, Alberta, on June 29, 1969. There are 484 7-Eleven stores in Canada as of 2013.[52] Winnipeg, Manitoba, has the world's largest number of Slurpee consumers, with an estimated 1,500,000 Slurpees sold since the first 7-Eleven opened on March 21, 1970. All 7-Eleven locations in Canada are corporate operated.[53] Like its U.S. counterparts every July 11 the stores offer free Slurpees on "7-Eleven Day".

A limited number of 7-Eleven locations feature gas stations from Shell Canada, Petro-Canada, or Esso. In November 2005, 7-Eleven started offering the Speak Out Wireless cellphone service in Canada. 7-Eleven locations also featured CIBC ATMs—in June 2012, these machines were replaced with ATMs operated by Scotiabank. 7-Eleven abandoned the Ottawa, Ontario, market in December 2009 after selling all of the six outlets to Quickie Convenience Stores, a regional chain. Following concerns over the fate of Speak Out Wireless customers, Quickie offered to assume existing SpeakOut customers and phones into its Good2Go cellphone program.[54][55] 7-Eleven is similarly absent from the Quebec market due to its saturation by chains like Alimentation Couche-Tard, Boni-soir as well as independent dépanneurs.

Mexico

In Mexico, the first 7-Eleven store opened in 1971 in Monterrey in association with Grupo Chapa (now Iconn) and 7-Eleven, Inc. under the name Super 7. In 1995, Super 7 was renamed to 7-Eleven, which has 1,552 stores in several areas of the country. When stores are located within classically designed buildings (such as in Centro Histórico buildings) or important landmarks, the storefront logo is displayed in monochrome with gold or silver lettering. The main competitors in Mexico are OXXO (Femsa), Super City (Soriana), Farmacias Guadalajara and other local competitors.

United States

A 7-Eleven store cobranded with Gulf Oil for gasoline sales in Ellwood City, Pennsylvania, U.S.

Supermarket News ranked 7-Eleven's North American operations No. 11 in the 2007 "Top 75 North American Food Retailers," based on the 2006 fiscal year estimated sales of US$15.0 billion.[56] Based on the 2005 revenue, 7-Eleven is the twenty-fourth largest retailer in the United States.[57] As of 2013, 8,144 7-Eleven franchised units exist across the United States. Franchise fees range between US$10,000 – $1,000,000 and the ongoing royalty rate varies.[58] 7-Eleven America has its headquarters in the Cypress Waters development in Irving, Texas.[59][60] Small-size Slurpees are free on "7-Eleven Day", on July 11.

7-Eleven Stores of Oklahoma operate independently since 1953 under an agreement with William Brown, currently led by son James Brown.[61]

Fuel

In the U.S., many 7-Eleven locations previously had filling stations with gasoline distributed by Citgo, which in 1983 was purchased by Southland Corporation (50% of Citgo was subsequently sold in 1986 to Petróleos de Venezuela, S.A., with the remaining 50% acquired in 1990). Although Citgo was the predominant partner of 7-Eleven, other oil companies are also co-branded with 7-Eleven, including Fina, Exxon, Gulf, Marathon, BP, Shell, Chevron (some former TETCO convenience stores were co-branded with Chevron, and Texaco prior to the 7-Eleven purchase in late 2012), and Pennzoil. Alon USA is the largest 7-Eleven licensee in North America.[62]

7-Eleven signed an agreement with ExxonMobil in December 2010 for the acquisition of 183 sites in Florida. This was followed by the acquisition of 51 ExxonMobil sites in North Texas in August 2011.[63][64]

Oceania

Australia

The first 7-Eleven in Australia opened on August 24, 1977, in the Melbourne suburb of Oakleigh. The majority of stores are located in metropolitan areas, particularly in central business district areas. Stores in suburban areas often operate as petrol stations and most are owned and operated as franchises, with a central administration. 7-Eleven bought out Mobil's remaining Australian petrol stations in 2010,[65] converting them to 7-Eleven outlets, resulting in an immediate and unprecedented overnight major expansion of the brand. In South Australia all Mobil petrol stations were sold to Peregrine Corporation and Branded as On The Run petrol stations.[66]

7-Eleven stores in Australia sell a wide range of items, including daily newspapers, drinks, confectionery, and snack foods. They also sell gift cards, including three types of pre-paid VISA cards. The chain has also partnered with BankWest, placing a BankWest ATM in each of their stores nationwide. Each year on November 7, 7-Eleven promotes "7-Eleven Day" by giving away a free Slurpee to customers.[67]

In April 2014, 7-Eleven announced plans to start operating stores in Western Australia, with 11 stores planned to operate within the first year and a total of 75 stores established within five years. The first store was opened on October 30, 2014 in the city of Fremantle.[68][69]

Wage theft

In August 2015, Fairfax Media and the ABC's Four Corners program reported on the employment practices of certain 7-Eleven franchisees in Australia.[70][71] The investigation found that many 7-Eleven employees were being underpaid at rates of around A$10 to A$14 per hour before tax, well under the legally-required minimum award rate of A$24.69 per hour.[70]

Franchisees underpaying their staff would typically maintain rosters and pay records that would appear to show the employee being paid the legally-required rate, however these records would in fact only include half of the hours the employee actually worked in a week. Employees would then be paid on the basis of these records, resulting in them effectively being paid half the legally-required rate.[70]

It was also reported that workers were often not paid loadings and penalty rates that they are legally entitled to, for working overtime hours, nights, weekends, and public holidays.[70]

After these reports came to light and received widespread attention, some employees had alleged to Fairfax Media that they had begun to be paid correctly through the 7-Eleven payroll system, however would then be asked by the franchisee to pay back half their wages in cash.[72] 7-Eleven subsequently announced they would fund an inquiry to investigate instances of wage fraud. The inquiry is to be conducted by an independent panel chaired by former ACCC chairman Allan Fels, and with the support of professional services firm Deloitte.[73] The inquiry invited submissions from current and former 7-Eleven employees who allege they have been underpaid, and assess each individual claim.[74]

In September 2015, chairman Russ Withers and chief executive Warren Wilmon both announced they will resign from the company. Deputy chairman Michael Smith replaced Withers, while Bob Baily was appointed as interim chief executive.[75]

The Four Corners investigation into 7-Eleven won a Walkley Award in 2015.[76] In December 2015, Stewart Levitt of law firm Levitt Robinson Solicitors, who featured prominently in the Four Corners program, announced a potential class action lawsuit against 7-Eleven head office on behalf of franchisees who had allegedly been lured into signing on with 7-Eleven by false representations.[77]

See also

References

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