How 7-Eleven plans to put the bodega out of business (NYC)
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The company comes to New York armed not just with data-processing tools but also with a system called the Business Conversion Program, whose stated goal is to entice mom-and-pop shops into becoming 7-Elevens. Will bodegas be able to compete when they rarely even use scanners to keep track of inventory? When they hire extra labor just to sell sandwiches for a pittance? When they stock outdated and unpopular items like canned clam sauce and mackerels?
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e pedestrian traffic, [and] the need for convenience.” 7-Eleven is betting that time-starved New Yorkers will come to appreciate the convenience of its more-than-just-sandwiches spread of fresh food, which has, to 7-Eleven’s credit, expanded considerably from its stoner-pleasing roots. While the company is still talented at making food cylindrical in a way God never intended, and Buffalo-ing things that the Lord might never think to Buffalo, it has also introduced fruit and yogurt cups, salads, and other healthier items. “If we went into Manhattan twenty years ago with our normal offerings, I don’t know if it would be as appealing,” says Duffy. A company exec told the trade publication QSR (which stands for “quick-service restaurant”) in 2008 that 7-Eleven wanted its stores’ prepared-foods sections to start resembling those at high-end local grocers. “Nice wines, fresh-baked pizza—it’s not what you think of when you think of convenience stores,” one franchisee said. “But it is what they’re becoming.”
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7-Eleven isn’t trying to put Fernandez’s constituents out of business so much as it is trying to win them over. That’s what the Business Conversion Program is for. In a traditional 7-Eleven franchise store, franchise fees run approximately $200,000 to $400,000. If the company deems you worthy of a franchise, it’ll find you a location so long as you have the money. But stores that already own or lease their own space can buy rights to become a 7-Eleven for just a $25,000 fee. 7-Eleven also offers franchisees loans through its own private program, which could appeal to would-be entrepreneurs at a time when banks are often unwilling to lend.
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The company hopes that early adopters like Jemal will trigger a cascade of conversions; 134 stores by 2017 is the target for Manhattan, but more could be easily added. In America, 7-Eleven is still largely seen as a symbol of suburbia, but it’s achieved urban density elsewhere. Copenhagen, for example, is frequently described as having a 7-Eleven on every corner. (In total, there are 197 7-Elevens in Denmark, a country of only 5.5 million people.) The company’s successful expansion in densely populated East Asia preceded its takeover by a Japanese group. According to 7-Eleven itself, the company was once hesitant to open urban stores because it wasn’t confident that urban customers would be interested in the limited product selection of smaller stores; the Retail Information System, it says, solves that problem. (The company also believes that its expanded fresh-food offerings will appeal to time-pressed city-dwellers used to buying food and necessities in the same place.)
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http://nymag.com/news/features/7-eleven-2012-5/
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