7-Eleven Announces Mass Closures of 444 Stores Across the Country
A string of closures from national and regional food retailers continues as convenience store chain 7-Eleven joins the unfortunate list.
In a quarterly earnings presentation on Oct. 10, the chain's parent company, 7 & i Holdings, announced that it will close 444 underperforming locations across North America. The company did not reveal the locations of the stores that are slated for closure.
North American 7-Eleven locations have experienced negative traffic since early 2023, with traffic decreasing by an additional 7.3% this August, as reported by Restaurant Business. The convenience store chain is struggling with inflationary pressures and a drop in demand for cigarettes. According to its website, 7-Eleven currently operates 13,000 locations across the U.S. and Canada.
The parent company said the closures will generate a $30 million operating income benefit and a $110 million increase in annualized run rate.
In an earnings release, 7 & i noted that it's experiencing a "tough consumer spending environment, particularly among lower-and middle-income earners." The company added, "There is a growing polarization of consumption due to a decline in labor incomes, which is a result of challenging employment conditions, as well as inflationary pressures and high interest rates."
Last month, the company entered an agreement to sell some of its North American properties as part of a sale-leaseback deal. While 7 & i did not disclose which locations it will close, it said it will complete this transaction by February 2025. The company expects this sale to bring in a profit of $520 million.
The recently announced closures follow a takeover offer from rival Alimentation Couche-Tard, which owns the convenience store chain Circle K. After 7 & i rejected its initial bid, the company is now offering $47.2 billion.
Additionally, 7 & i announced plans to create York Holdings Co., a separate company dedicated to its non-convenience store businesses like supermarkets and specialty stores.
This isn't the only major retailer to announce mass closures in recent months. In June, Walgreens shared plans to close a "significant portion" of underperforming stores over the next three years. CEO Tim Wentworth said Walgreens "continue[s] to face a difficult operating environment."
In April, 99 Cents Only, a discount regional retailer, announced that it's closing all 371 of its stores in Arizona, California, Texas, and Nevada. The retailer attributed this decision to the "unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures, and other macroeconomic headwinds," noting that these factors have "greatly hindered the company's ability to operate."
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