As 7-Eleven Inc. prepares to take part in a retail real-estate convention this week, it’s making it known to the real-estate industry that it is focused on aggressively growing its store base to expand its convenience offering in the U.S. and Canada.
While many retailers are contracting or limiting expansion, 7-Eleven announced in a press release Friday that it is aggressively growing and expects to add more than 200 new stores this year. Plans call for the company to accelerate store development over the next several years through organic growth, acquisitions and its Business Conversion Program.
7-Eleven has a multi-pronged approach to growth that includes in-line, end-cap space in shopping centers, freestanding stores, urban locations in light industrial sites, city residential areas and suburbia.
The company, which operates and franchises more than 6,200 stores in the U.S. and Canada, opened 170 stores in 2008.
“7-Eleven is looking to partner with property owners on new site development to determine how both parties can succeed for the long term and survive or even thrive in these difficult market conditions,” said Dan Porter, 7-Eleven’s vice president of real estate. “The company is investment-grade and, therefore, an attractive tenant for landlords.”
7-Eleven’s latest growth vehicle, as previously reported in CSP Daily News is its Business Conversion Program, where the company looks for existing independent retail-store operators who want to convert to the national chain and become a part of 7-Eleven’s franchise system.
The convenience-chain leader invests an average of $280,000 into these conversions. If the existing owner holds the lease or owns the building, they retain the responsibility for the real estate. There are now 110 outlets that have been converted to 7-Eleven stores since the program started in 2006.
“7-Eleven’s system is more than just a trademark,” said Porter. “It’s the entire brand with a complete turn-key franchise system, including our proprietary retail information system, equipment, training, consulting support, a distribution network with daily delivery of fresh-foods, advertising, bookkeeping, payroll preparation, vendor payments and quarterly audits.”
Typical 7-Eleven stores have 1,800 to 2,200 square feet of selling space within densely inhabited areas that have strong daytime traffic. The company also wants to be part of re-gentrification in its growth markets.
Among 7-Eleven’s growth markets are: New York; New Jersey; Baltimore; Washington, D.C.; Tidewater, Va.; Miami, Orlando, Tampa and Ft. Myers, Fla.; Dallas-Ft. Worth; Chicago; Denver; Salt Lake City; the San Francisco Bay area; Seattle; Los Angeles; San Diego; and Alberta and British Columbia, Canada.
“7-Eleven is expanding amid the gloom of retail retrenching,” said Porter. “There is opportunity for our company to fill the void at once vibrant locations that are going vacant. We are flexible in that we will buy a site and remodel, sign 10-year shopping center, building or ground leases with options to renew or purchase a site at the right location and build a ground-up store.”
To support its growth plans, 7-Eleven is reviewing its portfolio of leased stores and their rental rates. 7-Eleven’s real-estate development team is evaluating individual sites to ensure rates are in line with current market values and identifying opportunities to work with landlords who may be experiencing lease defaults or retail flight by their current tenants.
“By moving rents to market values, we will further support our efforts to develop new locations bringing more jobs, taxes and commerce to local communities,” said Porter. Click here to read CSP Daily News’ previous coverage of the lease evaluation.
7-Eleven and its real-estate team will participate in the International Council of Shopping Centers’ (ICSC) Global Retail Real Estate Convention May 17-20 at the Las Vegas Convention Center. The 7-Eleven booth is fabricated to look like a 7-Eleven store.
Based in Dallas, 7-Eleven Inc. operates, franchises or licenses approximately 7,800 7-Eleven stores in North America.
