7-Eleven CEO speaks out on Shell split: Impact “will not be material”

Following its split from Shell after a partnership lasting over a decade, 7-Eleven has unveiled its growth plans for the year ahead.

In an interview with Marketing, Steven Lye, CEO for 7-Eleven Singapore, said that the convenience chain has had a good synergistic partnership with Shell over the years. As such, "There were no contentious issues or expressions of dissatisfaction with our performance from Shell."

When asked about the impact of separation on the 7-Eleven business, Lye said that with store growth plans for 2018 underway, the impact from the separation “will not be material”. He explained:

Even with the closure of these stores, 7-Eleven still remains the largest convenience store chain network in Singapore.

While he said that 7-Eleven has contributed to the growth of Shell’s business with positive increase in sales, profitability and customer count, he did not comment on the financials or footfall increase. In terms of the benefits 7-Eleven saw, Lye said that the stores saw “double digit growth in profitability”, on average, for the Shell /7-Eleven stores over the length of the partnership.

Lye added: “We respect their business decision not to renew the alliance arrangement, which lasted [over] 10 years and only affects 7-Eleven’s operations in Singapore, in view of its plans to align its operations here with its long-term global business strategy to manage its own retail operations. We wish them well in their endeavours."

Read also: Shell-7-Eleven split: Why breaking up was the right move by Shell

Growth plans underway

The news comes as the convenience chain remains on track with rolling out its growth plans in Singapore. Currently, the company is targeting to open 30 new stores by end of 2017, with additional plans in the pipeline to open 50 new stores next year. 7-Eleven declined to comment on the financial sum set aside for the move.

According to Lye, part of this strategy includes opening more stand-alone stores as well as bringing in "exclusive and premium range" of products to the store. Meanwhile, the stores will also be expanding on its ready-to-eat offerings.

Banking on the local population's love for all things Japanese, 7-Eleven will also better align its store concepts to those in Japan. As such, the company has over the years included initiatives such as increasing its merchandise mix to include imported snacks from Japan, which are exclusive to 7-Eleven Singapore. Moreover, 7-Eleven is also rolling out a new single payment terminal system in store that combines different payment modes into one single terminal. This is to ensure faster and easier e-payment processes for customers.

“These offerings are currently only available at 7-Eleven convenience stores and customer reaction has been positive and encouraging,” Lye added.

Meanwhile, next door in Malaysia, 7-Eleven also launched 2000 store last year, with a revamped and modern convenience store format. The new generation 7-Eleven convenience stores encourages customers to see 7-Eleven as a lifestyle concept where they can enjoy the range of products on offer by spending time at the store, similar to a neighborhood café. Much like in Singapore, 7-Eleven Malaysia also increased its range of product and services to customers by providing Touch ‘n Go reload services, bill payment for utility providers, online purchases payment through MOLPay, point-of-sales activated gift cards and parcel locker services in partnership with BoxIt.

Its fate in Indonesia however, was not as bright as outlets shuttered from 30 June 2017 onwards, after eight years in Jakarta.

On the loyalty front in Singapore, the convenience chain is also launching its new 7Rewards mobile app to drive footfall and increase visits to its stores by offering loyalty rewards to repeat customers. According to Lye, the results from its loyalty programmes were well received.

As such, 7-Eleven has increased the frequency from an annual programme to twice a year - commencing 2017. This includes an upcoming Winnie The Pooh collectibles loyalty programme, which follows its Sanrio and Line characters collectibles loyalty programme which ran in stores from May to July this year.