This week, 7-Eleven’s parent company announced receiving a buyout offer from a Canadian competitor, sending shockwaves across Japan.
This event marks a historic moment, as no Japanese company of such magnitude has ever been acquired by a foreign entity.
Traditionally, Japanese firms have been more inclined to invest in foreign businesses.
As the largest convenience store chain globally, 7-Eleven boasts 85,000 outlets in 20 countries and territories.
It has achieved remarkable success by positioning itself as a go-to option for quick, affordable, and tasty meals, particularly in regions like Japan and Thailand, where the demand is high.
“We have more stores than McDonald’s or Starbucks,” stated Ryuichi Isaka, CEO of Seven & i Holdings, prior to the acquisition news.
Of the 85,000 stores, about 25% are located in Japan, while approximately 10,000 are in the United States.
A Major Player in the Market
In comparison, Quebec-based Alimentation Couche-Tard operates nearly 17,000 Circle K stores in 31 countries, with over half located in North America.
Following news of the buyout proposal, Seven & i was valued at over $30 billion.
7-Eleven shares surged more than 20% on Monday but retraced some gains the next day.
Analysts attribute the affordability of Seven & i to the weakening Japanese yen against the US dollar and other currencies.
This trend, alongside government efforts to encourage mergers and acquisitions in Japan, seems to be taking effect, according to industry experts.
However, the proposal remains preliminary and may face scrutiny from competition authorities due to its potential scale.
7-Eleven has capitalized on its diverse food offerings, including rice balls, sandwiches, cooked pasta, fried chicken, and dumplings.
While convenience stores traditionally serve snacks, in Japan, 7-Eleven has become a culinary destination for both locals and tourists.
Its food selections have garnered a massive following on social media platforms throughout Asia.
Visiting a 7-Eleven store is even considered a must-do activity in Thailand, where its ham and cheese toastie gained viral attention.
Isaka aims to replicate this success in the US and European markets as investor pressure mounts to streamline operations and focus on the core 7-Eleven brand.
The company has been revising its strategy to enhance the fresh food offerings in more locations.
“Stores that prioritize fresh food attract significantly more customers,” Isaka noted.
“We aspire to grow with high quality, not just in quantity. Customer satisfaction is paramount, and we aim to boost sales across all locations.”
Revisiting American Roots
Seven & i Holdings has been on a purchasing spree, acquiring over 200 US stores from Sunoco for approximately $1 billion earlier this year.
In April, the firm reclaimed over 750 stores from a franchisee in Australia.
For most of its nearly century-long history, 7-Eleven operated as an American brand.
Founded in 1927, it initially sold blocks of ice before transitioning to essential goods like eggs, milk, and bread.
At that time, store hours were from 07:00 to 23:00, providing the brand with its name.
As the brand expanded, 7-Eleven began franchising internationally.
In 1974, Japanese retailer Ito-Yokado launched the first 7-Eleven in Japan and acquired a 70% stake in the US parent company in 1991.
The founder of Ito-Yokado, Masatoshi Ito, who passed away in 2023 at age 98, is credited with transforming 7-Eleven into a global powerhouse.
In 2005, Ito-Yokado rebranded to Seven & i Holdings, paying tribute to both its legacy and Ito, the honorary chairman.
Now, as the company weighs the option of maintaining Japanese ownership or returning to North American origins, analysts speculate if this trend could prompt more Japanese corporations to consider acquisition offers.
There appears to be a “greater willingness among Japanese boards to accept foreign investment and be open to overseas approaches,” experts observe.
Such dynamics may encourage more foreign investors to explore opportunities within Japan’s corporate landscape.
