Closing
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From The Epoch Times:
Convenience store chain 7-Eleven will close hundreds of stores as the company faces declining sales at its U.S. stores.
7-Eleven operates more than 13,000 stores across the United States and Canada. The company plans to shut down 444 “underperforming stores” as part of improving efficiency and managing cost, according to an Oct. 10 financial forecast presentation from the firm. The closures represent more than 3 percent of the company’s U.S. and Canadian stores. This is expected to generate approximately $30 million in operating income benefit for the retail chain this year.
7-Eleven is looking to boost capital efficiency and ensure sustained business growth in North America given the “tough consumer spending environment, particularly among lower-and middle-income earners,” it said in an Oct. 10 statement.
Challenging employment conditions, high interest rates, and inflationary pressures have led to a decline in labor incomes, according to the company.
The firm credited the robustness of the North American economy to consumption by high-income earners, noting that middle- and lower-income groups have taken a “more prudent approach” in this regard.
“In the six months ended August 31, 2024, merchandise sales at existing stores in the U.S. decreased year-on-year in U.S. dollars,” it stated, noting that traffic also declined.
7-Eleven attributed this to several factors, including a large portion of Americans living paycheck to paycheck, the reduction in Supplemental Nutrition Assistance Program (SNAP) benefits, the growth of online retail sales, and a cyber outage incident that affected operations.
The firm specifically highlighted declining tobacco use as a contributing factor affecting traffic and sales. Tobacco use has fallen by 26 percent compared to 2019, the company stated.
Cigarettes made up 21.5 percent of total convenience store sales in 2023. Circle K and 7-Eleven are the two top convenience store chains by store count, meaning that they likely already each capture the largest shares of U.S. tobacco sales, according to Don Burke, senior vice president at Management Science Associates, a market research firm.
The market for U.S. cigarette smokers is declining after decades of warnings about health risks. Convenience stores have long dominated tobacco sales, accounting for about 70 percent of purchases.
The planned closure of 444 stores is part of several steps being taken to ensure the long-term success of 7-Eleven outlets, according to the company. Other measures include growing proprietary foods, accelerating digital sales, and growing and enhancing store networks.
The retail chain reduced its estimate for total store sales in the second half of 2024. The company predicted that it will “return to growth in 2025 and beyond.”
7-Eleven is owned by Japan-based Seven & i Holdings, which has multiple other brands under it.
7-Eleven stated that it plans on setting up “a store network of 50,000 stores in areas outside Japan and North America by the fiscal year ending December 31, 2025, and to extend our presence to 30 countries and regions including Japan and North America by the fiscal year ending December 31, 2030.”
Buyout Attempts
In August, Seven & i Holdings revealed that it received a buyout offer from Canada-based convenience store operator Alimentation Couche-Tard (ACT). In September, the firm announced that it rejected the offer.According to Seven & i Holdings, Couche-Tard proposed a $14.86-per-share cash deal, which it stated “grossly” undervalued the firm. The Japanese company determined that the transaction was not in the best interests of shareholders.
Even if the Canadian store chain were to raise the proposed buyout value “very significantly,” the possibility of the deal getting through remains uncertain, Seven & i Holdings stated.
Stephen Dacus, chair of Seven & i’s board, wrote a letter to Couche-Tard, clarifying that the Japanese firm remains open to any offer that recognizes their “standalone intrinsic value.”
“However, we do not believe, for several critical reasons, that the proposal you have put forward provides a basis for us to engage in substantive discussions regarding a potential transaction,” he said.
On Oct. 9, Seven & I Holdings stated that it received a revised, nonbinding buyout proposal from Couche-Tard.
Seven & I Holdings “has maintained, and intends to continue to maintain, the confidentiality of its current discussions with ACT at this time.”
“The Company will continue to act in the best interest of its shareholders and other stakeholders of the Company,” it stated.
The Japanese firm announced recently that it plans to establish an intermediate holding company that will watch over its supermarket food business, specialty stores, and other businesses, collectively referred to as the SST Business Group. A total of 31 companies will be brought under the group.
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Related:
https://www.nbcnews.com/business/business-news/walgreens-close-1200-stores-three-years-rcna175451
Walgreens said Tuesday it plans to close 1,200 stores over the next three years as it seeks to further downsize its footprint amid flagging sales and changing consumer behavior.
The pharmacy chain said 500 of the closings would occur over the next 12 months. It estimates a quarter of its 8,700 stores in the U.S. are unprofitable.
Walgreens announced the closures as part of its fiscal fourth-quarter and full-year earnings, which beat Wall Street's expectations. In a statement, CEO Tim Wentworth acknowledged the company was in the midst of a "turnaround" that would "take time."
"We are confident it will yield significant financial and consumer benefits over the long term,” Wentworth said.
In June, Walgreens said it planned to close a “significant” number of its underperforming stores by 2027. Tuesday’s announcement appears to be the company’s first exact estimate of how many locations it will shutter.
Bidenomics, FTW!
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CVS is in worse shape than Walgreen's...
Always remember, Operation Valkyrie was an act of sedition.
Warning: I post things that interest me. Read and comment at your own discretion. -
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Related:
https://www.nbcnews.com/business/business-news/walgreens-close-1200-stores-three-years-rcna175451
Walgreens said Tuesday it plans to close 1,200 stores over the next three years as it seeks to further downsize its footprint amid flagging sales and changing consumer behavior.
The pharmacy chain said 500 of the closings would occur over the next 12 months. It estimates a quarter of its 8,700 stores in the U.S. are unprofitable.
Walgreens announced the closures as part of its fiscal fourth-quarter and full-year earnings, which beat Wall Street's expectations. In a statement, CEO Tim Wentworth acknowledged the company was in the midst of a "turnaround" that would "take time."
"We are confident it will yield significant financial and consumer benefits over the long term,” Wentworth said.
In June, Walgreens said it planned to close a “significant” number of its underperforming stores by 2027. Tuesday’s announcement appears to be the company’s first exact estimate of how many locations it will shutter.
Bidenomics, FTW!
Unsustainable business model.
I'm surprised it took this long. They've saturated the area with stores - there's one on every corner (I can think of six within a ten minute drive of my house) and they're way more expensive than the competition. Customer service is lousy; it's almost impossible to find someone to help you.
Recent example..Mr wtg had knee replacement surgery and I was looking for some Mederma scar gel. Checked four stores.
Target - $16.89
Walmart - $18.12
Mariano's (local Kroger grocery located next door to Walgreens) - $21.99
Walgreens - $24.99Found this to be the case all during COVID when I was looking for OTC meds, etc.
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@wtg said in Closing:
and they're way more expensive than the competition. Customer service is lousy; it's almost impossible to find someone to help you.
Yeah good points. It's like they cut costs by having minimal staff (it always seems like there's one employee there) and all the products cost much more than competition, I had the same experience as you when I was trying to find a shoe insert... $15 most places, $24 at Walgreens. It is a tough business model... then again, they often have medical/care related goods that you can't find in most big box stores. I'm hoping the one near me doesn't close.
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I can't remember the last time I went in any of these stores. We get prescriptions from Stop & Shop who are way better than either CVS or Walgreens. There's a small local privately owned corner shop I use if we want something from around the corner.
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DON’T let them eat cake.
- RFK Jr -
CVS is in worse shape than Walgreen's...
Is it really? I knew Walgreens was going to close a bunch of stores. I hadn’t heard about CVS.
Talking about breaking it up...
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They were really focused on inter-divisional synergies when I talked to them a year ago. It’s a way for them to justify all the M&A by showing the whole is greater than the sum of its parts.
We brought them an idea of using the retail pharmacy to boost their speciality pharmacy business. Basically use info from the retail side to find people with AATD, each of which could potentially bring 150k annually in top line revenue for CVS specialty.
In the end their lawyers killed the idea because the in-home test we were proposing had big pharma branding.
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Sad.
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Growing up in Virginia I thought 7-11s were nationwide since they're so ubiquitous in the mid-Atlantic.
In Taiwan, there are so so many also. More than 5000 in a country that is not too much bigger than Vermont. But 7-11 Taiwan has the best steamed buns (and tea eggs)!
(Japan has over 21,000 7-11's)
