SAN DIEGO — 7-Eleven is turning its attention to the United States, mimicking its success in Japan. Some of the stores’ items are already available in Southern California.
Known for its high-quality food, often delivered fresh daily, the convenience store in Japan is popular with tourists, but also with Japanese shoppers who can enjoy a quick dinner after a long day.
In view of declining revenues from the tobacco and gasoline trade in the USA, the owners of the Japanese retailer 7-Eleven want to adapt some of their American branches more closely to the Japanese model: They want to set up a multi-million dollar distribution system for fresh food at many of their locations.
Several items found in Japanese stores have turned up in Orange County, including the fluffy egg sandwich. Americans who have traveled to Japan are excited. A fake onigiri (rice ball) that tricked San Francisco residents into thinking it was available at their 7-Eleven caused an uproar.
Still, convincing Japanese fans is a very different thing than convincing the American public that 7-Eleven offers more than Slurpees and hot dogs.
Q: Can 7-Eleven change its image in the U.S. and become more like its stores in Japan?
Economists
Caroline Freund, UC San Diego School of Global Policy and Strategy
YES: 7-Eleven can and should rebrand itself. In Japan, you can get a healthy and delicious lunch for under $5, including incredibly fluffy egg salad sandwiches and tasty teriyaki rice balls. The trick will be to expand the U.S. customer base without alienating Slurpee/hot dog fans. One example could be the world’s largest snack maker, PepsiCo, which is pursuing a dual strategy of adding healthy options while improving its core products.
Kelly Cunningham, San Diego Institute for Economic Research
JA: The great thing about the free market or “capitalist” economy is that businesses innovate and adapt to consumer demand and desires. Successful businesses sell their goods or services at prices that consumers are willing to pay. Businesses fail when revenues don’t cover all the costs of producing and delivering their products. Japan’s innovative system of overseeing a wider and more diverse range of products sold in its revived 7-Eleven stores could work well for American consumers.
James Hamilton, UC San Diego
JA: Americans are more health conscious today than they used to be. Just because you need something quick to eat doesn’t mean it’s unhealthy. It can be difficult to find healthy, fresh food, especially in inner cities. I think it’s great that a major corporation is taking steps to change that. Let’s offer people an alternative to pizza and chips and see if they take it.
Norm Miller, University of San Diego
NO: Americans are slow to experiment once a stereotype is established. Our current image is of a place where you can get an oversized, sugary Slurpee that would kill most diabetics and a hot dog made from mysterious animal parts. In Japan, 7-Eleven stores are larger, sell everything from concert tickets to paying utility bills, and constantly rotate menus with fresh food. Maybe if they changed the name to “Convenience Oasis” and bought some refrigerated trucks?
David Ely, San Diego State University
JA: Convenience stores are under pressure to find new revenue streams to offset declining sales of tobacco products and gasoline, so 7-Eleven needs to change. Given the positive experience in Japan, expanding the food offerings for 7-Eleven’s domestic stores is a logical step. This change is supported by the increasing application of data analytics, which now allows the company to make decisions about which products need to be stocked in stores to maximize sales.
Ray Major, economist
YES: The convenience store model is outdated and profitability is declining as consumers turn to online shopping and delivery services. Declining gasoline sales are also negatively impacting net income. Competition from many other similar companies like AM/PM further reduces profit potential and has created a saturated market that leaves little room for growth through expansion. Reinventing 7-Eleven through product differentiation and adding new and interesting food items can breathe new life into an otherwise outdated business model.
Alan Gin, University of San Diego
JA: It may take some time, but there is room for it in the fast-food market. People still lead busy lives and sometimes want to eat quickly and conveniently. The 7-Elevens would give people an alternative to fast food and fast-casual restaurants, both in terms of location and the type of food offered. In Japan, the food can be very good and there are many options, but it might take some education to get U.S. consumers to try it.
MANAGEMENT
Phil Blair, Manpower
YES: 7-Eleven needs to develop a very sophisticated marketing plan to completely change its image. Today, the company is known for fast, cheap food that often looks stale and comes from a mini-grocery store. It wants to become a company like Whole Foods, known for fast, quality food that employees can bring home to their families. 7-Eleven also currently depends on two dying products: cigarettes and gasoline. The company needs to evolve from its current blue-collar clientele to a more white-collar clientele. The locations, staff, and image of the stores also need to be updated.
Gary London, London Moeder Advisors
NO: I didn’t even know that the sushi version was available in American convenience stores. A few years ago, the English chain Fresh and Easy tried to enter the USA. It turned out to be a miserable failure: it was neither fresh nor easy. It’s best not to confuse passing fads with long-term trends.
Bob Rauch, RA Rauch & Associates
JA: Like stores and restaurants across the U.S. that have added healthy options to their menus, 7-Eleven can expand its offerings and broaden its customer base. There are many locations where the company can offer new food and beverage options. The company needs to capitalize on food and beverage as tobacco and gasoline sales decline. It already has a loyal customer base—people like convenience—but 7-Eleven needs to expand.
Austin Neudecker, Weave Growth
NO: Changing the perception of a long-standing brand is expensive and difficult. In Japan, 7-Eleven is known for its urban locations, cleanliness, and decent, fresh meals. In the U.S., the store is often associated with gas stations, convenience, and affordability, but unhealthy products and minimal service. To change that, 7-Eleven would need to make significant investments in equipment, product selection, and staff, in addition to a massive marketing push. Advertising campaigns, initial promotions, and a loyalty program could change minds over time, but it’s doubtful before they’re financially on the ground.
Chris Van Gorder, Scripps Health
JA: I think 7-Eleven can change its image if the Japanese offering becomes popular with a larger US population. This is especially true if the food is fresh and unique, as is the case with 7-Eleven in Japan. The best thing to do would probably be to test the concept in the market, and of course it may not be well received in every market. But I think introducing new food ideas is always worth a try.
Jamie Moraga, Franklin Revere
NO: Changing the image in the U.S. would require significant marketing and rebranding efforts. Products like the stores in Japan might appeal to a specific niche market or social media influencers, but that would likely not last. The broader U.S. market traditionally views 7-Eleven as a convenience store with Slurpees, candy, and scratch-off tickets. It’s not the place the U.S. citizen thinks of when looking for high-quality, freshly prepared food.
Haney Hong, San Diego County Taxpayers Association.
JA: Right now, most of us probably think that the only place you can get a good sandwich relatively cheap is at a grocery store or regular deli – although I think with the cost of doing business in California, you’re still paying $20 at lunch at grocery stores and delis. If 7-Eleven can get away with offering fresh food at convenience store prices, it may well change its image and become more like stores in Japan.
