7-Eleven is shutting down 444 stores in North America because they are not making enough money. This is part of a plan to address issues like rising prices, fewer people buying cigarettes, and fewer customers coming in, especially in the U.S. and Canada. The company’s owner, 7 & i Holdings, shared this plan in a financial report on October 10, 2024.
Struggles with Traffic Decline and Inflation
Since early 2023, 7-Eleven stores in North America have been getting fewer customers. In August 2024, the number of people coming to the store dropped by 7.3%. People are not as interested in buying items like cigarettes, and the increasing prices are making it more difficult for the store to earn money.
7-Eleven has about 13,000 stores in the U.S. and Canada. Some of these stores are not doing well, so the company is closing them to make things run more smoothly and focus on the stores that are doing better.
Financial Benefits from the Closures
To make more money, 7 & i Holdings said that shutting down 444 stores will make an extra $30 million and raise yearly income by $110 million. This is a plan to keep up with competition and make finances better.
7-Eleven is going to sell some of its properties in North America to make money. They expect to make $520 million in profit by February 2025.
Broader Retail Trends: The Impact on Consumer Behavior
Shops are shutting down because many stores are struggling, especially ones that sell food and things people use every day. 7 & I Holdings said that people are not spending as much money, especially those with less money.
The company believes that expensive prices, higher interest rates, and changes in what people buy are making it hard for businesses to make as much money as they used to.
This news is similar to what other large stores are doing. For instance, Walgreens will close stores that are not making money in the next three years. Additionally, 99 Cents Only will shut down 371 stores this year for reasons like COVID-19 and economic issues.
Acquisition Offer and Future Plans
In a surprising twist, the announcement of the closure happened at the same time as a bid from a rival company, Alimentation Couche-Tard, who owns Circle K stores. Couche-Tard increased their offer to $47.2 billion to buy 7 & i Holdings.
In the future, 7-Eleven is making a new company called York Holdings Co. for its supermarkets and specialty stores. This means 7-Eleven might focus on different kinds of stores, not just convenience stores.
Conclusion:
7-Eleven is closing 444 stores because they are struggling in the retail industry. They are trying to be more competitive by changing how they do things. We don’t know yet how this will impact their North American locations.
They are also looking for other ways to grow, like selling some stores. This shows they are getting ready for the future. But closing these stores will for sure impact the communities they are in