Are convenience stores still convenient? 7-Eleven takes on the on-demand invasion

DALLAS — When consumers can have almost anything delivered from Amazon.com within an hour, order via Dash buttons or through Amazon Echo’s virtual personal assistant Alexa, what does the traditional convenience store still have to offer?

Joe DePinto, chief executive officer of 7-Eleven, has been in charge of the world’s biggest convenience store chain since 2005, during this age of Amazon and a time when credit card-accepting gas pumps mean no one has to come inside the store.

“The landscape is changing so fast. Yes, there’s Amazon and there’s GrubHub . ... It’s all about immediate consumption,” DePinto said. “We have to be prepared and ready in ways that our customers want. And the last four or five years, we’ve had our heads down, grinding it out. And we’re doing a lot of things right.”

He’s focused on what you want to eat when you’re dieting, and when you want to splurge. He cares about how much you’ll pay for a single roll of paper towels, and that pure alkaline water is a thing with athletes.

Stopping at the corner store on the way to and from work, school and play is still a habit for many, and 7-Eleven wants to remain as relevant as it was 90 years ago when it got its start in Dallas.

“As long as we don’t all become hermits there will always be a need to get out, get gas and grab something to go,” said Craig Rosenblum, senior director at food retail consultancy Willard Bishop.

The industry has roughly doubled in size over the last three decades and ended last year with 154,535 stores in the U.S.

7-Eleven “is still the face of the industry,” said Jeff Lenard, vice president at the National Association of Convenience Stores.

Its Slurpees and Big Bite hot dogs have left a good taste in the mouths of millennials. More than 50 percent of 7Eleven’s customers are millennials, and now they’re old enough to buy beer and wine.

“This generation grew up with a different convenience store,” Lenard said. “Young people see the convenience store as a place where they can pick up a good sandwich. Older generations think of the bathroom key attached to an old hubcap or a block of wood. That’s not as appealing.”

While there are strong regional convenience stores chains, such as Texas-based Buc-ee’s and the East Coast’s Wawa and Sheetz chains, on a national level, it’s a landscape that 7-Eleven has owned long since it invented the Slurpee in the 1960s.

Amazon is testing its own convenience store concept, Amazon Go, which has no cashiers or checkout lines.

Like all retailers, DePinto said he’s watched Amazon’s video about its store that’s been viewed 8.4 million times since December. Even WalMart, which has been in the gasoline business since the 1990s, is testing a couple of convenience store concepts to add to its pumps across America.

No one expects Amazon to get into the gasoline business, but convenience stores sell Americans 80 percent of their gasoline.

7-Eleven has grown from 29,000 worldwide stores in 2006 to 61,500 in 2016. U.S. store count increased over the last decade from 5,500 to 8,900.

Last year, 7-Eleven’s combined U.S. and Canada sales were estimated at $25 billion, with 60 percent or $15 billion coming from inside the store and 40 percent from gasoline pumps, according to recently published list of top food retailers from Supermarket News.

Worldwide 2016 sales exceeded $89 billion. All the international licensing in 17 countries, with the exception of Japan, is handled by 7Eleven in suburban Dallas.

It already has the young millennial customers that all retailers are chasing.

Healthy and cheap are two words that aren’t often associated with convenience stores. But 7-Eleven says it’s doing its best to change that.

DePinto, 54, has fundamentally changed 7-Eleven into a retailer that owned half its stores, to a company supporting stores that are 90 percent owned by entrepreneurs.

“We’re providing independent business owners with the tools to be successful,” DePinto said. “We want them to be strong and proud of the brand.”

7-Eleven started building its private label program in 2004 with a few paper products and batteries. In 2008, it added some snacks, potato chips, candy, nuts and beef jerky.

Now it has 800 proprietary store-branded products. Franchisees can pick and choose from a mix to tailor their stores to their neighborhoods. On average about 15 percent of the items in a 7-Eleven store will vary.