Improving Operational Efficiency in Convenience Stores: A Case Study of Seven & i's Strategies
Explore how Seven & i tackled foot traffic slowdown and enhanced operational efficiency in its convenience stores. Learn about their innovative strategies and the impact on customer traffic.
Photo by Aaron Piang on Unsplash
Photo by Aaron Piang on Unsplash
Understanding the Foot Traffic Slowdown
Seven & i faced a significant foot traffic slowdown ranging from 3.6% to 8% during fiscal 2024, with the latter resulting from an outage related to cybersecurity. This decline in customer visits posed a notable challenge for the company, echoing a broader trend in the industry.
Photo by Aaron Piang on Unsplash
Strategies to Improve Customer Traffic
To combat the foot traffic decline, Chief Financial Officer Yoshimichi Maruyama emphasized the importance of enhancing customer traffic. Seven & i initiated several key strategies, including the addition of Raise the Roost Chicken & Biscuits and Laredo Taco Company restaurants within their stores. The incorporation of Quick-Service Restaurants (QSRs) has been particularly effective, with sites featuring QSRs experiencing over 50% higher traffic on average.
Photo by Aaron Piang on Unsplash
Innovative Initiatives and Expansion Plans
Seven & i outlined ambitious plans to augment its network by adding 50 QSRs in fiscal 2025, indicating a commitment to diversifying offerings and attracting more customers. Additionally, the company focused on enhancing delivery services and expanding its private label items to cater to evolving consumer preferences.
Operational Enhancements and Positive Outcomes
While foot traffic remained a concern, Seven & i officials acknowledged positive developments in various operational aspects. By optimizing gross profit margins and effectively managing SG&A expenses, the company witnessed notable profit growth. Overseas convenience store operations, including North America, demonstrated resilience with EBITDA meeting expectations and exceeding net income projections.
Impact on Customer Traffic and Growth
The implementation of strategic measures yielded tangible results for Seven & i. North American stores reported a 5.3% increase in basket size and a significant 18.3% surge in same-store delivery sales during fiscal Q1. These achievements underscore the efficacy of the company's efforts to enhance operational efficiency and revitalize customer traffic.