7-Eleven to buy Stripes

mjhale
Shift Manager
Shift Manager
Posts: 429
Joined: October 2nd, 2016, 4:02 pm
Has thanked: 1 time
Been thanked: 47 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by mjhale »

In the immediate DC area 7-Eleven exists because there is no other large scale convenience store competition. This is mainly because there isn't a lot of land available for the Sheetz or Wawa style super pumper plus convenience store. And what land that is available is expensive. With that said Sheetz and Wawa are hitting the outer suburbs with a lot of stores. They are both inching closer to the closer in suburbs. Wawa opened a store in western Fairfax County last year and Sheetz is building a store just outside Fairfax County in Loudoun County near Dulles Airport though it has a postal address of Herndon. In the areas where Sheetz and Wawa compete with 7-Eleven Sheetz and Wawa are definitely the stores that folks go to. I can think of several 7-Eleven stores with Wawa or Sheetz near them that have resorted to selling only 87 octane gas I guess to save money. Most 7-Eleven stores around here, even the newer ones, are drab bordering on dirty and unappealing except for the most basic of convenience store items. Their prepared food items are just gross and why anyone eats them I don't know. The older stores, especially the ones that go back to the 1960s and 1970s, haven't been remodeled in years. I think that at least around here the 7-Eleven franchises are going on the fact that they basically have a captive audience and no competition other than the small convenience store that might be at the gas station nearby. The only way these franchises are going to "wake up" is if Sheetz or Wawa develop some sort of convenience store only model without gas and open those in areas where building a full on model wouldn't work. Sheetz has been experimenting with convenience store only heavy on MTO program stores in Morgantown, WV and State College, PA. I'd be curious to see how a model like that would work in the solidly middle income to upper income areas around DC.
BillyGr
Store Manager
Store Manager
Posts: 1579
Joined: October 5th, 2010, 7:33 pm
Been thanked: 58 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by BillyGr »

mjhale wrote:I can think of several 7-Eleven stores with Wawa or Sheetz near them that have resorted to selling only 87 octane gas I guess to save money.
We have a couple places here (not 7-Eleven) that did the same - at least one it was due to having smaller tanks, so they could get a better deal if all were filled with the same thing, rather than 87/89/93, and thus offer a better price to customers (which they are often the lowest in the area, so it seems to be working).
TW-Upstate NY wrote:At least where I live here in New York State, zip code key ins are the exception and not the rule. The only place I ever had to do that was Hess and now that they've become Speedway that practice has continued. And now that I think of it, interestingly enough I was in Ohio some years ago and purchased gas at a Speedway in Canton and was not asked for a zip code when using a credit card. Don't think I've ever been asked for one except for the example I've cited and that includes a lot of out of state driving over the years.
I've seen it a few places (Pilot does it as well as the old Hess/Speedway) - we also ran into a couple places travelling (one in MD, one in NY closer to NYC). It seems to be just a precautionary thing to be sure it's really your card, but it doesn't fully work when you can simply go inside and have it charged manually and just sign (which could match the signature or not).
(Note - only found that out since we forgot that the card was in a different zip code than ours, as the one in charge of the group account lives in a different town, which is why it wouldn't work @ the pump when it asked for a zip, but would if that question wasn't asked :)
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by pseudo3d »

wnetmacman wrote:
storewanderer wrote:I had always heard good things about Stripes and its food service offering. 7-Eleven US will destroy anything good about Stripes, if they rebrand it (my only experience with Stripes was in Lawton, OK with some old former Circle Ks and I felt they were about on par with a US 7-Eleven: not very good). The problem with 7-Eleven is their franchise model in the US is one that does not lend itself to quality operations.
This is exactly what I'm afraid of. We just got Stripes here in the last few months, and it's leagues beyond the next best thing here.
storewanderer wrote:Also 7-Eleven cannot purchase the Oklahoma Stripes due to the pre-existing situation they have in Oklahoma with the "other" 7-Eleven (ironically, the OKC 7-Elevens operated by that third party are actually quite good, much better than the regular US 7-Eleven).
This may be why they've bought the Stripes name.
storewanderer wrote:It will be interesting to see how they handle the fuel. The problem with 7-Eleven is while I am sure they would like a fuel brand, numerous of their sites in current configuration do not meet minimum branding requirements for any of the major oil companies. Things like no public restroom, nonexistent cleanliness standards, combined with many sites that only have 2 gas pumps are things that the major oil companies simply have no incentive to brand.
Sunoco may be very willing to look beyond all that for the name recognition.
storewanderer wrote:In my market, 7-Eleven has been hurt significantly by the expansion of Maverik. While 7-Eleven has 50+ stores in this market and Maverik only has 7 stores, it is surprising how much it has hurt them. They have removed fuel from some sites, some sites only offer unleaded and no longer offer all grades of fuel, and traffic is dismal in many of the sites. When you go to a market that has a strong Quik Trip, Wawa, or Sheetz presence, there are few to no 7-Elevens and the few that exist are typically in lousy neighborhoods and do not offer fuel. There are two classes of c-stores in the US: ones that have nice clean stores, 100% corporate operated networks, large format stores, and expanded food offerings (Quik Trip, Wawa, newer Maveriks, Sheetz, etc.) then there are the F-Grade c-stores like 7-Eleven that are dirty, limited food options, poor service, and not very safe feeling.

7-Eleven's Japan-based management needs to take a look at their stores in the US and what type of operation they have here with their franchise network and the poor standards. I think they would be very ashamed. Any monies they invest to expand in the US will be wasted because the better c-store operators can simply find a lot nearby or across the street, build one of their A-grade stores, and kill traffic at the nearby F-Grade 7-Eleven.
We haven't had 7-Eleven here (Louisiana, Texas outside Dallas) since the 80's. While some badly remodeled relics remain, it would be like a new entry here.
storewanderer wrote:I have noticed Circle K seems to try to make trade offs for its not very good stores (though I find them a lot better than a 7-Eleven) by having some better prices; things like any size drink 79cents-99cents depending on market, frequent $1 coffee promotions in the afternoon, etc. The other thing is the newer Circle Ks that are new construction and corporate operated are very nice; they are not as good as the A-Grade operators I mentioned above, but they are definitely a solid B-Grade and far better than a 7-Eleven. It will be interesting to see how they handle Corner Store. 7-Eleven has badly botched its small Corner Store acquisition in California.
Circle K is trying to improve, though it seems like Couche-Tard is only interested in numbers. The drink prices you mention are attractive, but if I can get cheaper gas and foodservice offerings with it, I pass their stores every time. Corner Store isn't even acting like the change is coming. Based on the Corner Stores here, it won't be a big change, save for a few rebuilds where the CS stores are too small even for Circle K, and some overlap divestitures.
They still won't be operating the Stripes stores in Oklahoma, as it appears to be the "200 stores sold in a separate transaction". 7-Eleven Oklahoma must have gotten a heck of a deal to keep the "real" 7-Eleven out of Oklahoma indefinitely, and I'm sure that the contract (which 7-Eleven probably eternally regretted) stated that 7-Eleven couldn't backdoor their way into the state via a different name.

My guess is since Sunoco is not selling the APlus name (and keeping their Hawaii stores), those Oklahoma Stripes stores will be rebranded to APlus if the main stores (and the Stripes name) gets sold to 7-Eleven first. More likely is that Sunoco will sell the North Texas/West Texas/Oklahoma/NM stores first (probably because of overlapping markets) to third parties, then probably have to divest more when the FTC comes around. The question is how long will they remain Stripes, they bought a number of Speedy Stop locations and rebranded them as TETCO (for most of them you can still see the signage shape of Speedy Stop) and ultimately reset them as 7-Eleven stores but never actually gave them 7-Eleven brands. Given that they've been dragging their feet for the last couple of years, maybe the Stripes buyout will cause them to consolidate the two brands in Houston as 7-Eleven, but I don't know since they haven't done a lot of native expansion there otherwise (Circle K has been busy planting new stores over the last two or three years in Houston, marking their official return, therefore, they're probably going to rebrand Corner Store as Circle K WELL before 7-Eleven makes a major move).
Assets being sold to 7-Eleven include approximately 1,110 convenience stores in 19 geographic regions primarily along the East Coast and in Texas, and the associated trademarks and intellectual property of the Laredo Taco Company and Stripes. As part of the transaction, SUN will enter into a 15-year take-or-pay fuel supply agreement with a 7-Eleven subsidiary under which SUN will supply approximately 2.2 billion gallons of fuel annually. This supply agreement will have guaranteed annual payments to SUN, provides that 7-Eleven will continue to use the Sunoco brand at currently branded Sunoco stores and includes committed growth in future periods.

Approximately 200 convenience stores in North and West Texas, New Mexico and Oklahoma will be sold in a separate process.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: 7-Eleven to buy Stripes

Post by storewanderer »

The Oklahoma Stripes did not compete with Oklahoma 7-Eleven and have already been sold. I don't know who bought them, but they've already been sold. Pretty low end sites, very old former Circle Ks I believe.
jamcool
Store Manager
Store Manager
Posts: 1019
Joined: March 5th, 2009, 10:27 pm
Been thanked: 50 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by jamcool »

Meanwhile QT is planning to expand into San Antonio and Austin...where Corner Stores and Stripes have large numbers of stores. No doubt QT is going after those chains customer base with its "QT Kitchens" concept.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by pseudo3d »

storewanderer wrote:The Oklahoma Stripes did not compete with Oklahoma 7-Eleven and have already been sold. I don't know who bought them, but they've already been sold. Pretty low end sites, very old former Circle Ks I believe.
It looks like there were maybe in three cities and haven't expanded much. I did see a map of these stores, didn't look like they went beyond longitudinally Wichita Falls. Makes me wonder what they'll do for things like Llano which has an (old) 7-Eleven across from a (relatively new) Stripes, if they'll divest one or just close one. Are you sure they were already sold...? I can't seem to find anything regarding them.
jamcool wrote:Meanwhile QT is planning to expand into San Antonio and Austin...where Corner Stores and Stripes have large numbers of stores. No doubt QT is going after those chains customer base with its "QT Kitchens" concept.
Probably, especially if Circle K botches the Corner Store Market concept.

The Stripes acquisition seems like a way for 7-Eleven to avoid building new stores. They never built any new stores in Houston like they said they would a few years ago and even a recent growth spurt in Waco starting about five years ago (where they built at least four new stores from the ground up) seems to have petered out. I just hope that 7-Eleven builds stores at the same pace as Stripes and not them languish...for the last few years, Stripes seems to have been really up and coming, building new stores at a good (but not unmanageable) clip and buying out Sac-N-Pac, which seems to have been clustered around the Austin/San Antonio area.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: 7-Eleven to buy Stripes

Post by storewanderer »

QT will dominate pretty badly over Circle K and 7-Eleven. Which 7-Eleven is it in those two markets? Is it the real one or the Alon licensee?

It isn't even about the QT kitchen concept. It is about QT in general. Large lots with easy in/out. Quick operating gas pumps. Large stores with pleasant and very efficient employees. Clean stores. QT usually doesn't have the lowest prices, but the minimal difference they charge is worth the reliable experience and product selection offered.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by pseudo3d »

storewanderer wrote:QT will dominate pretty badly over Circle K and 7-Eleven. Which 7-Eleven is it in those two markets? Is it the real one or the Alon licensee?

It isn't even about the QT kitchen concept. It is about QT in general. Large lots with easy in/out. Quick operating gas pumps. Large stores with pleasant and very efficient employees. Clean stores. QT usually doesn't have the lowest prices, but the minimal difference they charge is worth the reliable experience and product selection offered.
The modern Waco 7-Eleven stores were all new-builds in the last five years (despite 7-Eleven originating in Texas and being plentiful in Dallas, the bankruptcy of Southland and the sale of markets afterward decimated the chain's presence in Texas)...but as far as I know they built several new stores in 2012-2013 and then just stopped, especially as Stripes and Corner Store rolled ahead. The Llano store is much older, it is an Alon. I believe that the 7-Eleven in Llano was the same "market" as Waco, as the 7-Eleven stores were once in Fina stores (or a gas station that became Fina), then those became Circle K around 1990, then Skinny's sometime later in the 1990s, then the gas station brand became Alon (at which point the Skinny's brand largely disappeared, not sure if any left). Many of the former Skinny's have since closed, but I think the Llano store was spared the sale to Circle K.

Circle K only seems like its an advantage because they actually took control and started rebranding chains, with the Tiger Tote conversions complete, and their base of Corner Store (which is still expanding) will give them further advantage. 7-Eleven has the brand in Waco (though Circle K, thanks to legacy Diamond Shamrock Corner Store stores will outnumber them) but has built no new stores in the last few years, and has stores in the Houston market (and Bryan-College Station) that between TETCO and Stripes will give them a solid store base (probably not enough to outstrip Circle K thanks again to the heavy Corner Store base) but their inattention is going to put them in an increasingly disparate second place (in B-CS the combined Stripes/TETCO stores will be enough to beat Circle K, but that's only a part of the market, and that's IF they actually do something about it).

But both the Corner Store acquisition and the Stripes acquisition are just empire-building with probably not enough talent to actually execute what those chains were doing.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: 7-Eleven to buy Stripes

Post by storewanderer »

The key difference between Circle K and 7-Eleven is that while Circle K generally runs its acquisitions as corporate operates sites, 7-Eleven, historically, has taken and re-franchised stores as fast as they possibly can. They have continued that path in recent years with their purchase of Corner Stores in California (the few they kept...), as well as when they bought a string of stores from the former Pacific Convenience and Fuels (Circle Ks that were previously owned by Conoco) in California, Oregon, and Washington; they couldn't get those things franchised fast enough.

The problem with Circle K is they can only be as good as what they bought. Their Kangaroo Express locations are a mix of bad and worse. The ones in the Wichita, KS market mostly operating as "PRESTO" (Kangaroo never even bothered to rebrand them) were absolutely terrible. I will be surprised if Circle K keeps those. I know the ones in rural Western Kansas are similar if not worse (not all of those even have pay at the pump). Partially rebranded, dirty little sites, with low customer counts, messy and sloppy, with unclear price labeling, really something that they should be embarrassed of. Given that Corner Store has historically been run well, I would expect those stores to continue to run well under Circle K.

So how will 7-Eleven handle Stripes? Are they going to run a bunch of corporate sites now or get these things franchised out as fast as they can, their typical way of handling US acquisitions?

The 7-Elevens operated by Alon are not even on the 7-Eleven website/store locator since that is a licensee. The website also notes that there is a licensee in rural Utah and those stores are not on the store locator either. Those rural Utah ones are definitely not standard 7-Elevens. Different point of sale, a little more limited food/drink programs, but a far larger mix of c-store items, candy, etc. to reflect larger store sizes.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: 7-Eleven to buy Stripes

Post by pseudo3d »

storewanderer wrote:
So how will 7-Eleven handle Stripes? Are they going to run a bunch of corporate sites now or get these things franchised out as fast as they can, their typical way of handling US acquisitions?

The 7-Elevens operated by Alon are not even on the 7-Eleven website/store locator since that is a licensee. The website also notes that there is a licensee in rural Utah and those stores are not on the store locator either. Those rural Utah ones are definitely not standard 7-Elevens. Different point of sale, a little more limited food/drink programs, but a far larger mix of c-store items, candy, etc. to reflect larger store sizes.
The Stripes stores, due to the Laredo Taco Company program, tend to be much larger than typical 7-Eleven stores. Since 7-Eleven is buying LTC as well, I'm not sure if they'll adapt and be better suited to take on the larger stores or stunt growth and build smaller 7-Eleven stores. Under Sunoco, Stripes continued to grow its prototype, with new-builds about 6,800 square feet instead of the typical 2,500 square feet 7-Eleven format. Stripes also owns a 12,000 square foot store they acquired from an independent (which I highly doubt will be taken over by 7-Eleven, at least, not without major changes). If 7-Eleven wants to take Circle K head on, then the best move would be to build larger-format 7-Eleven stores in Stripes markets while avoiding direct competition with them (this includes College Station, Waco, and Houston, the markets I'm most familiar with), then start reflagging TETCO, then ease Stripes into the 7-Eleven programs and name when the time is right.

The components for making 7-Eleven into a viable and major chain in most of Texas are there, it's up to them to act on it.
Post Reply