Future Retail to manage world’s largest convenience store chain 7-Eleven in India

By: | Published: March 1, 2019 5:39 AM

The Japanese-owned, US-headquartered 7-Eleven generates almost a third of its sales in the Asian countries.

Kishore Biyani, founder & group CEO, Future Group, said the maiden store will be opened in Mumbai, where the enterprise is headquartered. (Representational photo)

The world’s largest convenience store chain, 7-Eleven, on Thursday signed a master franchise agreement with Kishore Biyani’s Future Group, which will open and manage the former’s brand stores in the country.

Future Retail’s subsidiary SHME Food Brands will open new stores as well as convert existing locations to the 7-Eleven brand, beginning this year. With over 67,000 stores worldwide, this partnership with Future Retail marks
7-Eleven’s first entry into the country.

Kishore Biyani, founder & group CEO, Future Group, said the maiden store will be opened in Mumbai, where the enterprise is headquartered.

The Japanese-owned, US-headquartered 7-Eleven generates almost a third of its sales in the Asian countries.

“7-Eleven Inc is among the most iconic global brands in the food retail landscape. We are proud to bring this globally trusted convenience store to India and build new pathways together that will offer Indian customers greater convenience and choices, within their own neighbourhood,” Biyani said in a statement.

He said the 7-Eleven convenience store is all “about offering fresh foods, lot of category around beverages, chocolates, confectionary, ice-creams, tobacco”. With cafe also being part of the stores, breakfast, lunch and dinner will be in the offing for customers at affordable prices, Biyani added.

Through this partnership, the strategy is to leverage India’s growing young population that seeks convenience, Biyani said that it is distinct from Future Group’s small-store strategy which focuses on adding more members. “This (7-Eleven) is a different strategy, it is a convenience store. The category overlap is very minimal. This (7-Eleven) is more about fresh food and that (Easyday and Nilgiris) is more about ingredients which goes into your homes. That (Easyday and Nilgiris) sells grocery, home and personal care. This (7-Eleven) store does not sell,” Biyani said.

Last year, Biyani had said that Future Group aims to open 10,000 small stores in the country to increase revenues from small stores to Rs 60,000 crore by 2021-22 from the estimated revenue of Rs 5,000 crore this financial year.

“Till now in India, many players have tried convenience store but have failed to scale up profitably. 7-Eleven is globally huge brand in this space and understands how it works. We expect to see good response for 7-Eleven especially in metros, Tier 1 and Tier 2 where initial leg of expansion will happen. This gives Future Retail an additional revenue basket,” said Abneesh Roy, senior vice-president at Edelweiss Financial Services.

Biyani said that although the agreement with 7-Eleven allows sub-franchising, the company is not looking at it currently.
In the convenience store space, Biyani’s latest enterprise with 7-Eleven will be pitched against the twenty-four seven convenience store chain promoted by Modi Enterprises and In & Out, which is run by state-owned Bharat Petroleum Corporation.

Future Group runs around 1,444 stores in 409 cities and generates bulk of its revenues from food and grocery retailing. It has three smaller store brands, Easy Day, Heritage Retail, and Nilgiri’s, which were acquired by it in the last few years. They contribute around 15% to its overall sales. Future Group plans to have 10,000 small stores in the next few years.

In the three months to December, Future Retail reported an increase of 9.9% in its net profit at Rs 201.43 crore. Revenues for the company stood at Rs 5,301 crore compared with Rs 4,693.39 crore in the year-ago quarter.

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