What was once aspirational back in the day is now a reality as foodservice is the No. 1 c-store category in both sales and gross profit. To gain perspective on how far the industry has come, I reached out to Des Hague and Jeff Hamill, who were senior executives for the world’s largest convenience chain at the turn of the new millennium.
7-Eleven Japan (SEJ) acquired Dallas-based 7-Eleven, Inc. in 1990, and Hamill, a 7-Eleven merchandising veteran at the time, said “we were really focused on bringing the vision that they created in Japan, where fresh food defined the store … that's what we were trying to emulate.”
- 7-Eleven is No. 1 on CSP’s 2023 Top 202 ranking of U.S. convenience-store chains by store count.
Even with the success in Japan and the systems to support a top-tier foodservice initiative, little progress was made during those first years. Hamil recalled that in the early ‘90s, 7-Eleven was “doing the right things” with training using the time-intensive Tanpin Kanri (TK) process for daily ordering and delivery. But it was not without its hiccups. “But how we were doing it was so authoritarian, I think we chased a lot of good talent away,” he said.
A Fresh Approach
As Y2K grew closer, CEO Jim Keyes took a different approach and brought in foodservice professional Hague to kickstart the struggling program.
“I was walking into an office where there had been eight leaders in the last seven years, where the merchandising team and franchisees had looked at fresh food as the misbehaving stepchild,” Hague said. “I didn't have any of that old baggage.”
What Hague heard from leadership was: “‘Hey, come on in. We're a 32,000-store chain. We want you to innovate and make us a leader in foodservice,’” he said. “If I hadn’t heard those words, I would have never joined. There were obstacles, there were past failures. I couldn't change the past; I could only change the future.”
A seasoned c-store and 7-Eleven vet like Hamill was the perfect partner for the young-but-experienced foodservice leader like Hague. “Jeff was my partner in crime and a liberating force,” Hague said. Together, they broke the code by focusing on data and customer tendencies on key categories. What stood out to Hague is that “60% of the consumers coming into 7-Eleven were buying a beverage, so we were going to leverage the beverage. Jeff wins, I win, the franchisee wins.”
As the data began to validate the emerging plan, Hamill emphasized the importance of aligning the entire system to see the opportunity. “We're trying to convince franchisees, we're trying to convince management, we're trying to convince all of teams, all our partners to embrace the facts,” he said. “We were becoming one team with our suppliers, with our partners.”
Go-Go Get Your Own Drink
The first big success came with the launch of Go-Go Taquitos, which did wonders for basket sizes.
“Only 17% of taquito customers bought three taquitos,” Hague said. “So, if we could drive them to three taquitos, then they would still buy their own drink and chips. Instead of having a meal deal at $1.99, they're buying three taquitos at $1.99 to $2.49 and then adding a drink and chips on their own. The average basket size more than doubled on millions of transactions.”
A smiling Hamill noted, “We leveraged the beverage with food and it's 1 + 1 = 11. “
Bigger, Fewer, Better
Both Hamill and Hague recalled institutional obsession for new food items. The results were not pretty, so Hague took the bold move to edit the 24 sandwich types that had been sold down to “an assortment that was fewer but better.”
“We focused on five signature sandwiches that would stand up against the best sandwich shops around the world,” he said. “Rave-able and crave-able was our mantra. That moved the needle five X.”
Hearing from these two c-store leaders made it clear that what was true 25 years ago still holds true today for any category: Look to experts and veterans, lead with data, collaborate with all stakeholders, challenge the status quo, focus on what the customer wants, and rally the whole system to legendary greatness.
Joe Vonder Haar is the co-founder and managing partner of iSEE Store Innovations LLC. He can be reached at jv@iseestoreinnovations.com.
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