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In an interview, with Convenience Store News one year ago, 7-Eleven CEO Joseph “Joe” DePinto outlined how the world’s largest convenience store chain was refashioning itself into a more streamlined retailing machine, focused on serving franchisees with the most modern merchandising, operations and marketing programs in the market.
The three-pronged growth program involved migrating from a mix of corporate-run and franchise stores to a predominately franchised operation, incorporating more fresh foods and exclusive products, and taking a leadership role in fixing the c-store industry’s cumbersome distribution model.
A year later, the Dallas-based retailer appears to have made progress toward most of its objectives. In May 2009, 7-Eleven said it expects to add more than 200 new stores in the U.S. and Canada this year with a multi-pronged approach including in-line, end-cap space in shopping centers, freestanding stores, downtown walk-up locations, suburbia, and in light industrial and city residential areas.
As reported on CSNews.com, plans call for the convenience chain to accelerate store development over the next several years through organic growth, acquisitions and its Business Conversion Program. The convenience retailer, which operates and franchises more than 6,200 stores in the U.S. and Canada, opened 170 stores in 2008.
7-Eleven’s latest growth vehicle is its Business Conversion Program, through which the company looks for existing independent retail store operators who want to convert to the national chain and become part of 7-Eleven’s franchise system. 7-Eleven said it invests an average of $280,000 into these conversions. If the existing owner holds the lease or owns the building, they retain the responsibility for the real estate.
There are 115 locations that have been converted since the program started in 2006.
Over the years and after a few name changes, 7-Eleven has become synonymous with convenience. Through the decades, 7-Eleven store operators have kept their fingers on the pulse of their customers’ needs and rarely missed a beat in offering stable, tried-and-true products, along with off-beat, who-would-have-guessed services.
Here’s a look back at more than three-quarters of a century of products and services marketed by 7-Eleven — always with an eye on saving the consumer precious time.
CSNews is proud to have chronicled how 7-Eleven rose to its current position as the No. 1 c-store retailer in the world.
In the Beginning
Tracing the history of the convenience store industry isn’t an exact science. But there is one fact upon which most c-store operators agree: After several requests from customers in the summer of 1927, John Jefferson “Uncle Johnny” Green, the operator of an ice dock owned by The Southland Ice Co. of Dallas, began stocking bread, milk and eggs.
As summer waned and the demand for ice fell, Green noted the sales of bread, eggs and milk continued to be strong. He approached a young executive at The Southland Ice Co., Joe C. “Jodie” Thompson Jr., with a proposal; “I’ll stock milk bread, eggs, cigarettes and a few canned goods. You furnish the items, I’ll pay the power bills and keep the accounts for the business. In the spring, we’ll settle up.”
The following May, Green handed Thompson $1,000 in cash, the company’s share of Green’s profits. At that moment the convenience store became a successful business model.
The 1920s
The journey from ice company to international retailer was an interesting one. Thompson took an immediate interest in Green’s concept and added shelves to other ice stations. Sales grew as customers delighted in the early-morning to late-night hours and the extended days the stores were open, including Sunday.
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Another innovation helped identify the new concept. A Southland employee brought an authentic Indian totem pole back from Alaska and suggested the ice docks be called Tote’m Stores, because people “toted” away their purchases. The pole sign, a forerunner of a type of retail identification that would become standard, was inaugurated.
The 1930s
In the early 1930s, Southland Ice became The Southland Corp. Its founder, Thompson, determined the USA was becoming a more mobile society with a lifestyle built around the automobile. One didn’t walk to the store anymore; you went in the car.
Thompson’s style of convenience stores were open-front drive-ins, operating 7 a.m. to 7 p.m., seven days a week. People would come from miles to shop at the ice plant/retail shop combo and were discovering how a convenience store fit into their daily shopping habits. The stores then offered curb service, staples, canned goods, salt, cookies, candy and, in season, ice-cold watermelon.
By 1936, most states again permitted the manufacture and sale of liquor and beer. Customers welcomed the cold beer sold at the little ice docks/grocery shops, then called “Tote’m Stores.” [Today 7-Eleven is the largest outlet for popular brands, such as Anheuser-Busch. Alcoholic beverages accounted for 15 percent of the company’s merchandise sales in 2008.
The 1940s
The 1940s were a trying time for the entire country, and the ice industry was no exception. During World War II, Southland was kept busy supplying Camp Hood in Central Texas. During the decade Southland purchased a number of ice companies.
By 1945, all of Southland’s ice stores had open-front, drive-in units that were open from early morning to late at night and sold ice, cold drinks, groceries and sundries. They also offered curb service. The problem: except for the Tote’m Stores, the outlets operated under different names. Finally it was decided that if all of the store operators could agree to stay open from 7 am to 11 pm, the stores could be called 7-Eleven. In early 1947, the new moniker became official and the brand was born.
The 1950s
By early 1950 there were 80 7-Eleven stores operating, and the company began to expand to other Texas cities. Austin and Houston were the first new markets.
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As Southland prepared for its 25th anniversary in 1952, expansion plans drove the importance of store design, merchandising, real estate selection, employee training, advertising and promotion. At the time, Southland claimed to be the state’s largest retailer of beverages, dairy foods, bread, frozen meats and crushed ice. In 1952 the 100th 7-Eleven store opened.
In 1954, 7-Eleven ventured outside of Texas — to Florida. By that time, Thompson’s oldest son, John, was developing well in the management structure of Southland. Skeptical of having one son work for another, Thompson viewed the Florida stores — five in Miami and Jacksonville — as the proper vehicle for his younger son Jere to develop and manage.
In the mid-1950s, 7-Eleven stores offered do-it-yourself TV tube testers, new key-making machines and money orders.
In the late ‘50s, after a trip to Washington D.C., in a snowstorm, John Thompson and Clifford Wheeler, then general manager of 7-Eleven, saw the potential for c-stores in cold weather climates. In just 18 months, the company opened 20 stores in the Washington area. In June 1958, Southland celebrated the opening of its 300th store. By the end of 1959, there were 490 stores in Texas, Louisiana and on the East Coast. The 500th store opening was scheduled for early 1960 in Houston.
1960s
With America’s population shift to the suburbs, Southland readied itself for even more rapid growth. Specific plans called for 102 stores on the East Coast by the end of 1960 — along with the Washington D.C. area, the Tidewater region of Virginia, Baltimore and Philadelphia targeted.
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In June 1961, Joe C. Thompson Jr. died at age 60, his 35-year-old son John was named president three months before. By the end of 1961, there were 591 7-Eleven stores — a 20-percent increase in only 12 months. New markets, including Arizona, Colorado and New Jersey, were entered when Southland purchased a few small companies.
In 1963, 7-Eleven stores opened in Kansas City, and Salt Lake City, and the 1,000th unit was opened in Midland, Texas. In the fall of 1963, Southland offered its formal training class — a two-week store manager course.
At the end of the year, for the first time, revenues exceeded $200 million. More importantly, Southland prepared to enter a business system that would revolutionize the company and greatly influence American business — franchising.
From 1965 to 1969, 7-Eleven’s growth exploded. The chain soared from 1,519 stores on Jan. 1, 1965 to 3,537 units operating in 38 states by Dec. 31, 1969.
During that period the company reached a number of milestones. In ‘65, Southland was rated by Fortune magazine as one of the nation’s 50 largest merchandising firms. Also that year, 7-Eleven introduced the hugely successful Slurpee frozen carbonated beverage, established a real estate department with representatives in each division and began opening its Southland Chemical Division.
In 1967, for the first time, Southland’s total revenues passed the half-billion-dollar mark. The next year the company granted its first area franchise to Garb-Ko Inc. in Saginaw, Mich. Southland’s first public stock offering of 750,000 common shares was well received by the financial community in 1968.
In 1969, the “Oh Thank Heaven for 7-Eleven” ad theme was introduced nationwide. Another milestone that year: Southland established a computer systems department to develop and integrate the company’s field operations. The company also announced plans to construct to its own distribution centers.
1970s
As the 1960s ended, convenience stores were popping up on virtually every street corner in the nation. It was at the start of the 1970s that 7-Eleven and other operators began experimenting with 24-hour operations. Logically, one of the first cities to see 24-hour 7-Eleven stores was Las Vegas.
Other major developments in the early part of the decade included a substantial increase in the number of female store managers and constant introductions of new products and services, such as fast food and gasoline. In early 1970, a task force went to Orlando to set up a miniature distribution center — a warehouse providing merchandise for 22 stores. By the end of 1976, three distribution centers — In Orlando; Tyler, Texas; and Fredericksburg, Va. — would serve more than 3,300 7-Elevens.
Southland reached its first billion-dollar year in 1971, when revenues totaled $1.08 billion with profits reaching almost $17.3 million. That year the use of microwave ovens to prepare chicken, french fries, sandwiches and pastries heralded new merchandising possibilities. The Southland Distribution Centers produced and distributed a variety of salads and 6 million Smiley’s sandwiches. Also that year, Southland enlarged its test of self-serve gasoline sites.
In 1972, Southland’s common shares were listed on the New York Stock Exchange for the first time at $32-7/8 per share. By the end of the year, there were 4,455 7-Eleven stores, 42 percent of which were operated by franchisees.
Southland began seriously considering the potential of 7-Eleven going international. By the end of 1973, the company held a 50-percent interest in two United Kingdom retail food businesses with 1,096 stores, 75 7-Eleven stores in Canada and Super-7 stores in Mexico. That year, the company signed an agreement that eventually would change the future of the company drastically: Southland agreed to introduce the 7-Eleven system into Japan through an area license granted to Iko-Yokado Co. Ltd. By late 1976, 188 stores were operating in Japan.
In 1976 Southland made its most important community service commitment (in terms of dollars). The company began supporting the Jerry Lewis Labor Day Telethon with a campaign featuring store and customer donations designed to raise more than $1 million for the Muscular Dystrophy Association.
1980s
In the 1980s, 7-Eleven expanded in the fast-foods arena. The Truck Stopper and Big ‘Un sandwiches had shelf lives of a week, rather than hours.
The Super Big Gulp — a response to the nation’s increased thirst for fountain soft drinks — appeared in 1984.
In an effort to provide the customer with more quality food, the company tried some ill-fated co-op ventures with Church’s Fried Chicken, Pizza Hut and Hardee’s, experimenting with branded fast food inside a few test stores.
7-Eleven made a commitment to quality hot dogs in 1985 and moved from speared wieners that took too long to cook to the now present roller grill. 7-Eleven now sells 100 million hot dogs annually.
The company tested its own food concept called “The Works” featuring fresh-baked pastries, deli and grill items, and installed convection ovens and large warming cabinets for its “Get Hot” program of burgers, chicken and BBQ sandwiches, potato wedges and snack items, such as corn dogs and nachos, mostly found on the West Coast.
To satisfy the consumer’s love affair with fresh coffee, 7-Eleven introduced fresh-coffee grinders.
In the middle of this decade, 7-Eleven rolled out ATMs to its stores, quite an innovation at the time. The company now has the largest ATM network in the country executing 105 million transactions a year.
As the lure of instant wealth caught fire across the nation and more states launched lotteries during this decade, 7-Eleven staked its claim in the game and is now the No. 1 retailer of lottery tickets in the U.S.
1990s
In this decade, consumer expectations evolved. They demanded not only speed and ease of service, but variety, quality and value. In response, 7-Eleven became fully committed and moved headlong into the fresh foods arena, building an infrastructure to create quality products that are delivered fresh every day.
In most of its stores 7-Eleven began providing fresh and daily-coded sandwiches, fruit, bakery and breakfast items that could be purchased and put into a brief case for eating later at work or on the run.
7-Eleven quickly lead the industry with its national rollout of pre-paid services in the ‘90s offering pre-paid phone cards, pagers, telephones and cell phones for those who wanted to better manage their communications budget or who did not have credit to secure these conveniences.
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2000s
Now more than ever, 7-Eleven focused on new products and innovations to meet consumer demand for quality, assortment, value, speed and service. Each week the company introduced 25 to 50 new items. The company’s proprietary Retail Information System tracked sales, item-by-item, hour-by-hour and store-by-store to determine what sells when and where.
For those who need to cash a check any time of day, pay a bill at the last minute or send money to their kid at college, 7-Eleven developed Vcom (now owned by Cardtronics Inc.) — an in-store financial services center. This kiosk currently operates in some 2,200 7-Eleven stores across the U.S. and offers ATM transactions, money transfers, check cashing and bill payment to make shopping and accessing financial services a little more convenient.
Prepaid services moved into the area of Internet access, and the prepaid phones offered at 7-Eleven become even smaller so they fit neatly into a shirt or pants pocket.
More recently, video games and prepaid cards for Massively Multiplayer Online Games debuted in stores, and the retailer also is looking at a range of wellness products — nutraceuticals, vitamins and energy supplements in liquid form; wellness additives in film-strips, food and beverages; and digital delivery of any media that can be digitized.
And even after 82 years, you’ll still find among the staples, fresh sandwiches, new-age beverages and the product that started it all — ice — but now in a convenient-to-carry package for home entertainment.
Much of the information in this article is provided by 7-Eleven. Early history of the company is excerpted from “Oh Thank Heaven! The Story of The Southland Corp.” by Allen Liles, copyrighted by The Southland Corp. in 1977. It was originally written by Barb Francella in 1994 and updated for this special anniversary edition.