CHICAGO -- White Hen Pantry's jingle has urged consumers, When you run out, run out to White Hen. After White Hen management spruced up its stores in the Midwest and added to its fresh-food services, 7-Eleven Inc. bought the chain in August 2006. And now consumers aren't sure what they'll find when they run out.
While 7-Eleven studies White Hen's business model and speaks respectfully of the historic chain, officials are resolute about one thing: White Hen will at some point bear the 7-Eleven moniker on its storefronts. What remains open is whether 7[image-nocss] -Eleven will adopt an approach that keeps the White Hen name in the stores in some fashion.
Much as BP, when it acquired the venerable Amoco brand, opted to preserve it as a fuel brand while labeling the stations BP, Dallas-based 7-Eleven is considering its options.
Our plans are to move toward the 7-Eleven brand and business model, Jeff Schenck, senior vice president national franchise, told CSP Daily News. We didn't buy the brand to fly two flags. What we're trying to do is create this synergy of what they do really good and what we do really good and try and incorporate that into our business model as a 7-Eleven.
For 7-Eleven, the acquisition doubled its presence in the Chicago area and pushed its Boston count to nearly 200 stores. It dovetailed nicely with 7-Eleven's franchisee philosophy and underscored 7-Eleven's focus to build store density in areas served by its combined distribution centers, according to company management.
Now 7-Eleven has dispatched a veteran team to plumb the depths of White Hen's operation and to offer a report on what should be preserved, if not expanded, in the 7-Eleven network.
Leading the 13-member integration team is Nancy Smith, head of 7-Eleven's Great Lakes division. Through mid-November, 7-Eleven had met several times with White Hen franchisees to offer them a future as 7-Eleven franchisees. None had signed on, but it was very early, she said; if any choose not to join 7-Eleven, the company will honor the White Hen franchise agreements.
Many White Hen franchisees have a tremendous amount of tenure, said Smith, so the stiffest challenge may simply be convincing them that change can be good. Changes could include rebranding, remodeling and a switch to 7-Eleven's proprietary retailer initiative system (RIS) for SKU management. She ruled out any possible closing of the acquired stores.
Three years down the road, four years down the road, the pole sign, the store, the brand in Chicago, will be 7-Eleven, Smith said. Inside of that, we're going to be talking to customers about what they value at White Hen, what they value at 7-Eleven, what can we learn from the White Hen fresh food program. Is there a brand inside White Hen that we can continue to use? Could there be something else that the customers told us they really value that we hang onto? I think that's very possible.
The small number of corporate White Hen sites could be used as models of the future look, she said. From 2003 to 2005, White Hen invested $50,000 in each store for upgrades and expansion of fresh-food offerings, including adding ovens to heat its sandwiches. Its 2004 store revenuesincluding the 56 stores in New Englandwere $270 million, while the parent company made $40 million in revenue.
We're just now 90 days into it, Smith said. I always tell people, we think we've worked hard, but the hard work is really ahead of us.
We'll be running hard in '07. The big work is, you start looking at the potential to rebrand stores, she continued. The big work is looking at layouts and equipment and construction opportunities. That's roll-up-your-sleeves work. All the training that we're doing with White Hen field counselors, introducing them to 7-Eleven and what [RIS] is and the way we run our business, there's a tremendous amount of time being put into that as well.
Schenck, who used to head 7-Eleven's Great Lakes division, said, What we're looking for in a franchisee is a hybrid of mom-and-pop supported by a global systemsomebody that brings that shopkeeper mentality but is willing, able and cooperative to working within a system.
Senior vice president of merchandising Cynthia Davis said 7-Eleven is respectful of the following White Hen had built with its made-to-order sandwich program, but isn't sure the heated-sandwich option fits the 7-Eleven philosophy of in-and-out convenience or its infrastructure of commissary-produced food designed to ensure quality and slash labor needs.
They sell more food than we do, so we're not going to take that away from those franchisees by any stretch of the imagination. More importantly, we're not going to take it away from the customers. But we also need to make some decisions to make the franchisees profitable, said Davis.
Watch for more on 7-Eleven and its internal and external changes in the January issue of CSP Magazine.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.