7-Eleven is closing more than 400 locations

New York
CNN
—

Several hundred “underperforming” 7-Eleven locations in North America will close, the supermarket announced.

Seven & I Holdings, the chain’s Japan-based parent company, revealed in an earnings report Thursday that 444 7-Eleven locations are closing their doors due to a variety of issues, including slowing sales, declining traffic, inflationary pressures and a decline in cigarette sales . purchases.

A specific list of closure locations was not immediately released. The chain has more than 13,000 stores spread across the United States, Canada and Mexico, making the number of closures 3% of the portfolio.

In his In its earnings release, Seven & I said that while the North American economy is robust overall, it has noted “more cautious consumption policies” among middle and low income earners due to persistent inflation, high interest rates and a “deteriorating ‘economy. employment climate.

A combination of these factors led to a 7.3% drop in traffic in August, capping six consecutive months of declines.

The chain also pointed out that cigarette purchases, once the largest sales category for convenience stores, have fallen 26% since 2019. A clear shift in sales to other nicotine products, such as Zyn, cannot make up the difference.

7-Eleven told CNN in a statement that it is “continually evaluating and optimizing its portfolio” and that the closed stores are part of its growth strategy, adding that the chain “continues to open stores in areas where customers are looking for greater convenience”

The 444 closures are a “gentle pruning of the chain to keep it efficient and profitable,” said Neil Saunders, retail analyst and managing director at GlobalData Retail.

“The closed locations have likely suffered a disproportionate decline in visitors and customers as consumers grapple with rising food prices and cut back on the amount they buy,” Saunders told CNN. “In some areas, increased competition from online and discount stores will also have taken its toll as consumers look for lower prices.”

Meanwhile, 7-Eleven said it will continue to invest in food in the United States as it is now the top sales category and a big draw for customers. Competitors like Wawa and Sheetz achieve higher customer satisfaction scores for their overall offerings, while 7-Eleven scores much lower, according to a recent study.

The company’s latest financial results come amid a takeover bid from Circle-K owner Couche-Tard, which increased its offer by $8 billion this week to $47.2 billion.