7-Eleven tweaks convenience store format for India roll-out next year

Experts say the emphasis on eating out at 7-Eleven in India is linked in part to curbs on foreign direct investment in multi-brand retail in the country

The city of Mumbai will see the roll-out of the first of the global 7-Eleven stores in February-March next year, but the format will be different from a conventional convenience store that stocks everyday items and is open round-the-clock for contingency buying. 

The 7-Eleven that Future Retail, which is the master franchisee of the brand in India, is putting together will be mainly “eating joints”, providing “hygienic food" for consumers in high-traffic areas such as offices, business parks, and colleges.   

“Typically, you find people eating out at roadside joints and eateries in Mumbai. We believe there is a customer base out there in the city for a 7-Eleven where we can serve breakfast, lunch, and dinner in an organised manner. This will be hygienic food at an affordable price. 

“We will also stock fruits, juices, snacks, and condiments for those wanting to consume on the go,” said Kishore Biyani, founder and chief executive officer, Future Group. Future Retail is part of the Future Group.

While India will be the first market where 7-Eleven will compete with eating joints rather than kiranas, the Future Group is also expected to limit the brand's presence to Mumbai city in the first phase. The group is looking at 5-7 stores in the first phase and is expected to monitor the stores carefully. Biyani says the format requires attention and that taking it to multiple cities may not work in the initial phase of the brand's launch. India is the 18th market for 7-Eleven, which has Japanese ownership, but is headquartered in the US. Worldwide, 7-Eleven has 67,000 stores and is the biggest in its space, operating as standalone outlets or attached to petrol pumps, malls, and shopping centres.

Experts say the emphasis on eating out at 7-Eleven in India is linked in part to curbs on foreign direct investment (FDI) in multi-brand retail in the country. On the other hand, India permits 100 per cent FDI in food retailing through the approval route, sector analysts said, making it easier for brands such as 7-Eleven to operate without a hitch. Abneesh Roy, executive vice-president, research (institutional equities), Edelweiss, said the franchise deal with 7-Eleven would give Future Retail an additional revenue basket. “Products of Future Consumer will also have a wider and larger touch point, which will benefit the group,” he said.

  

New model

• 7-Eleven will not target kiranas in Mumbai, its first city of launch
• Instead, it will compete with roadside eateries, providing food in an organised manner
• High-density areas such as offices, business parks and colleges in focus
• Future Retail, 7-Eleven's master franchisee in India, will launch 5-7 stores in first phase