7-Eleven's first store in India will be launched in Andheri East in Mumbai. (Representational image)
Reliance Retail, the retail arm of oil-to-telecom conglomerate Reliance Industries, October 7 announced its plans to launch US-based convenience store chain 7-Eleven in India. The company is set to launch the first store under the brand in Andheri East and many more stores in the Greater Mumbai region soon. Reliance Retail’s announcement to introduce 7-Eleven stores in the country comes on the heels of the Future Group’s termination with the store chain.
The Future Group, which runs hypermarket stores such as Big Bazaar, Nilgiris and Foodhall, had entered into an agreement with 7-Eleven in 2019 to open the company’s stores in India with plans to open the first one in Mumbai in 2020. However, this fell through with the group calling off its agreement with 7-Eleven earlier this week. The debt-ridden group is embroiled in a legal battle with e-commerce major Amazon over its deal with Reliance Retail. Reliance Retail had bought the retail businesses of Future Group in a Rs 24,713 crore deal last year.
7-Eleven started in 1927 as an icehouse and sold block ice for food preservation to households without electric refrigerators, according to Encyclopaedia Britannica. The company currently operates 77,000 stores across the world in 18 countries. Experts indicate the launch of 7-Eleven stores could cement Reliance Retail’s place in the grocery segment. Here’s all you need to know about the convenience store chain and where it falls in Reliance Retail’s strategy in India.
The inception of the ‘world’s first convenience store’
According to the company’s official website, John Jefferson Green and Joe C. ‘Jodie’ Thompson, one of five founding directors of the Dallas Southland Ice Company, came together to sell daily essential items such as milk, eggs and branded goods at Thompson’s ice dock in Dallas, Texas. This marked the birth of the “world’s first convenience store”, according to the company. They later started selling gasoline in 1928 and then beer and liquor, too, in 1933 after the prohibition on alcohol was repealed in the US. In 1937, the duo started to expand with new stores and added product lines. In 1946, the company changed its name from Tote’m Stores to 7-Eleven as it extended its hours of operation from 7 AM to 11 PM, an unheard-of practice in those days.
Expansion beyond Texas, then the US
7-Eleven started began expanding to other locations in the US beyond Texas in the 1950s. In 1963, the company opened a store in Austin, which stayed open at all hours, and soon several of its other stores followed suit. The company started international operations by launching in Canada in 1969 and by the 1980s it was present in Australia, Sweden, Taiwan, Hong Kong and Singapore, among other countries.
A US-based company with a Japanese owner
Southland Corp, the company that owned 7-Eleven, signed a licensing agreement with Japanese department store chain Ito-Yokado to open stores in Japan in 1973. The company expanded its businesses to other categories such as auto parts, petroleum, etc. It became heavily indebted in the late 1980s and was forced to sell the new businesses. However, despite these efforts, it went bankrupt in 1990. Its Japanese licensee then bought 70 percent stock of the company and became its majority shareholder. In 1999, the company was renamed 7-Eleven Inc. In 2005, the company became a wholly-owned subsidiary of Seven & i Holdings.
The model of operation
7-Eleven operates company-owned as well franchise-owned convenience stores across the world located in airport terminals, train stations and other transportation hubs, universities, malls, hotels and stadiums. Its stores on average are sized at 2,500-4000 sq ft. The company stocks essential items ranging from food and snacks to soft drinks, groceries, confectioneries, over-the-counter drugs, toiletries, newspapers, and so on. In the US, several 7-Eleven stores are also a part of gas stations. According to Statista, the company operated the largest number of stores, 20,988, in Japan as of 2020, followed by over 11,000 stores in Thailand and over 10,000 stores in South Korea. The United States had about 9,364 7-Eleven stores in 2020. The convenience store chain is known for offering on-the-go food products and beverages. The company claims it was the first to offer on-the-go coffee to consumers.
Reliance Retail’s game plan for the chain
In 7-Eleven’s signature style, Reliance Retail, too, plans to offer a range of beverages, snacks and delicacies customised for the Indian palate along with daily essentials at affordable prices. According to analysts, Reliance Retail’s agreement with 7-Eleven could further strengthen its grocery play. Abneesh Roy, executive director, Edelweiss Securities, said the agreement between the two companies has several advantages as many urban consumers in India are already aware of the brand and it will offer a differentiated assortment and global scale of 7-Eleven to Reliance Retail. He also indicated that Reliance Retail could potentially use 7-Eleven stores as locations under its omnichannel plans.Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.