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    7-Eleven's Joe DePinto Cites Private Label, Supply Chain Overhaul as Keys to Survival

    Walgreens focused on convenience, says executive at IRI Summit.

    LAS VEGAS -- 7-Eleven has found a strong niche with its newly developed private label line of 180 SKUS, including its own brand water and chips, said CEO Joe DePinto at Information Resources Inc.’s annual summit, which started here Monday.

    DePinto also noted value-minded shoppers are driving an unprecedented lift in sales of center store staples at 7-Eleven.

    "Once-slow-selling items like flour, pasta, ramen noodles, macaroni and cheese, and frozen items are some of our fastest-growing," said DePinto, who added six of the retailer’s best-selling chips SKUs are 7-Select brand, and unit sales of private label water are up 60 percent.

    Shoppers also appear to be buying more larger-sized and bulk items to save money. 7-Eleven responded by merchandising more 18-packs of beer in place of 6- and 12-pack sizes, according to DePinto. "As a result, sales in that category have grown," DePinto said.

    According to a report on Morning News Beat (MNB), DePinto also told audience members 7-Eleven is reorganizing its supply chain, where high costs—compared with the grocery, drug and mass merchandiser channels—have put c-stores at a competitive disadvantage. 7-Eleven, he said, is moving into a consolidated delivery model, which it already was doing in fresh foods, for heavy liquids and frozen foods.

    CSNews Online last week first reported the largest convenience store chain was expanding its line-up of products sold under the 7-Select brand, including juice, jerky, animal crackers, Gummi worms, paper goods, personal care items, sports drinks, sandwich bags, office supplies, batteries, cooking oil, motor oil, and more. Click here to read more.

    DePinto outlined the strategy behind the retailers efforts to reshape the convenience store industry’s distribution model in an exclusive interview with Convenience Store News in July 2008. The thrust of the plan is to eliminate redundancies in the current distribution model by simplifying store operations and consolidating DSD (direct-store delivery) distribution. The company already consolidated its fresh foods delivery system and is using the same approach with other major product categories by reducing the number of deliveries each store gets and the number of vendors delivering to each store. For the entire story, click here.

    Another speaker, Kim Feil, vice president and chief marketing officer at Walgreen Co., said the giant drug store chain was working to differentiate itself in a crowded marketplace. For a lot of people, "we’re a convenience store with a pharmacy in it," she said, according to the MNB report by Kevin Coupe.

    Among several tactics, Walgreen is reorganizing its stores around customer purchasing needs, bringing together, for example, items that people might need if they have a cold, rather than having them scattered around the store. MNB also reported Walgreens wants to break down the barriers between the various ways that people can buy—online, phone, mail and in the store.

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