Pizza and Cupcakes Keep 'em Coming to 7-Eleven as Cigarette Business Slides

Pizza is in and smokes are out at 7-Eleven.

As the preferences of its customers change, the convenience store chain is looking to give them new reasons to drop by. For years, much of its business revolved around selling beer and cigarettes to men and soft drinks and snacks to teens who didn’t have the inclination to waste time at a supermarket.

Yet, changing attitudes about drinking and smoking took a bite and 7-Eleven began to recast itself using food. Its initial efforts might not have been sophisticated – to this day, The Simpsons gets laughs out of the desiccated hot dogs, vividly colored Squishies that are the bill of fare at the show’s Quickie Mart convenience store – but they laid the groundwork for something important. They provided 7-Eleven a method of adapting to a changing market.

The food initiative at 7-Eleven is two-pronged. A foodservice component is rolling out on a market-by-market basis across the United States, and it just hit Dallas-Fort Worth, or at least 115 stores in the metropolitan area. A core menu includes Four Cheese and Pepperoni Pizza, sold whole or by the slice, all-white-meat Chicken Tenders, three varieties of chicken wings and a couple of breakfast items: a Breakfast Sausage, Egg and Cheese Quesadilla and hash-brown potatoes. Prices start at 79 cents for two hash browns and range up to $9.99 for a large pizza.

What makes the provender possible is the TurboChef Oven, a device that combines radiant heat, microwave and convection cooking methods to deliver a traditional baked product 12 times faster than a conventional oven.  Sounds like an artifact out of ‘50s science fiction, but it’s in service today at 7-Eleven turning out hot pizza in 90 seconds or a plate of chicken wings in under three minutes.

“Taste testing with consumers proved the products to be a big hit,” said Mike Hansen, 7-Eleven’s fresh foods manager responsible for launching hot foods in the company’s central division. “This product is not reheated in a microwave but, instead, actually oven-baked like a pizzeria.”

The Chef of the Future stuff might appeal to the guys and teens that the hot food program is designed to entice. The company’s customers want their needs attended to NOW, and TurboChef gives them that.

The 7-Eleven food expansion also has included more varieties of sandwiches, lighter fare, salads, fresh fruit, veggie trays, grilled items and, most recently, fresh bakery goods.

In an extension of its growing line of 7-Select private-label products, the retailer is rolling out 15 bakery items to 5,700 participating stores, including snack cakes and pies, mini-donuts, breakfast pastries and two-packs of chocolate cupcakes. The single-serve items are launching at a discounted price of 99 cents through the end of the year, after which the price kicks up to $1.19 for everything but the 10-ounce bags of mini-donuts, which are priced at $1.99.

The bakery system works chain wide because 7-Eleven has been working with a major distribution partner, McLane, to extend its capacities and get the bakery goods into stores in the proper condition.

Margaret Chabris, a spokesperson for 7-Eleven, said:

All the bakery items are shipped ambient to the regional McLane distributor or consolidator where they are frozen.  They thaw as they are shipped to 7-Eleven stores. Ninety percent of our stores receive [them] through our daily distribution system.  The stores that do not will receive the bakery products through McLane.

So, 7-Eleven is adding new products and developing new capabilities as it works to replace cigarette revenue and establish new businesses. To fill that same gap, other C-store companies have added gourmet coffee, elaborate sandwich programs even perishable food in a throwback to the original convenience store conception as a place to purchase a few everyday necessities between supermarket visits. The beer and smokes business – and soft drinks and snacks – proved more lucrative for convenience stores, and they’ve thrived on it. However, consumers need new reasons to come in as they ammend their habits. Pizza and cupcakes may help keep former smokers in the habit of dropping by 7-Eleven, but they many not win it a lot of new business. So look for the company to keep experimenting with varied, perhaps healthier, but still convenient, food operations to hold onto existing customers and win new ones.