Seven Eleven plans to build about 615 new large-format convenience stores with fuel in fiscal years 2024 through 2027, parent Seven & i Holdings said Thursday in a presentation to investors.

The focus of the presentation was a multi-faceted growth plan. It did not mention Alimentation Couche-Tard's recent proposal to acquire Seven & i.

The presentation said 7-Eleven has targeted 115 new stores in fiscal 2024, which ends Feb. 28, 125 in 2025, 175 in 2026 and 200 in 2027.

The company recently announced that 7-Eleven would close 444 underperforming stores.

Food service and proprietary products also are key growth strategies, as well as digital marketing and "frictionless" shopping.

The new, larger stores 7-Eleven has been building outperform its existing store network, the company said. In the first half of 2024, existing stores sold an average of $5,572 per store day, versus the new larger stores' average of $6,308. At maturity, the new stores are expected to reach an average $8,219 per store day.

Average per-store day is dollar and unit performance measured by total sales per-store per day for every item.

7-Eleven also intends to add 50 new restaurants to its growing network of in-store eateries, as well as modernize food service in existing stores. It now has 1,084 proprietary restaurants--including Laredo Taco, Speedy Café and Raise the Roost--and ranks among the top 30 restaurant operators in the U.S., the presentation said.

Mergers and acquisitions also are likely on the horizon. The presentation notes that since 2006, SEI has acquired 7,454 stores through 51 transactions and has achieved a 14% return on invested capital through mature acquisitions. 7-Eleven has a dedicated M&A team with a "proven track record" and targets "high-quality" stores.

7-Eleven said it has an "expansive store footprint with room to grow," with 13,229 stores in the U.S. and Canada, and a presence in 47 of the top 50 markets. About 50% of the U.S. population is within two miles of a 7-Eleven or Speedway store and about 30% are within one mile.

The company sells about $28 billion in merchandise and 12.7 billion gallons of fuel per year. Its delivery business has grown about 22% year to year to $725 million, the presentation said.

7-Eleven has 16 commissaries and 16 bakeries. Its commissaries will cover 45% of its stores by 2027.

Its 7REWARDS and Speedy Rewards loyalty programs have about 97 million members, up about 35% since 2021. The percentage of merchandise sales from loyalty clubs has grown 3 percentage points between 2023 and 2024 to 42.1% from 38.9%, the company said.

7-Eleven has 9.5% high-frequency members in the tiered membership program that rewards frequent buyers. Bronze members average one to four store trips per month, silver members average five to nine trips per month, gold members average 10 to 19 trips per month, and platinum members average 20 or more trips per month.

Delivery is a key component of 7-Eleven's convenience focus, and it plans to grow its 7NOW Delivery program into a $1 billion a year business by 2025. In 2024, it estimates annual sales at $725 million.

In its most recent quarter, the delivery business saw more than 29% growth in year-to-year same-store sales with an average basket size of $15.84. The average delivery time was 28 minutes and the delivery program had an 11% operating margin.

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--Reporting by Donna Harris, dharris@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

October 25, 2024 11:53 ET (15:53 GMT)

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