7 Eleven Convenience Store Analysis

Food & Beverage Cost Control

Submitted by:

Group Members:

James Arellano

Yolo Magayon

John Roger Abarca

Carmela Basco

Marco Polo Dominique Agosto

3rd Year BSHM

Submitted to:

Dr. Richard Entrata

I
HISTORY OF 7/11

The 7-Eleven chain dates back to 1927, when four icehouse firms in Dallas united to become
the Southland Ice Company, which primarily offered block ice for food preservation to families
without electric refrigerators. One of the ice establishments began selling food products either
after the merger or shortly before it. Southland Ice quickly expanded into general shopping,
erecting eye-catching Native American totem poles in front of several of its locations and
adopting the moniker Tote'm Stores, which served as a clever appeal to shoppers to "tote" their
products away.

In 1931, Joe C. Thompson, Sr. was appointed president of Southland Ice. The firm declared
bankruptcy during the Great Depression. It started with an increased focus on food and drink,
particularly following the passing of Prohibition in 1933, when beer and liquor were first sold.

With over 54,200 shops in 16 countries, 7-Eleven is the world's largest convenience store
company. With over 1300 outlets in the Philippines, 7-Eleven, controlled by the Philippine Seven
Corporation, maintains a market share of around 60%. The focus on consumers has been the
key to this company's success. The organization is constantly striving to deliver the finest
service possible by focusing on quality, timeliness, selection, and value.

Seven Corporation of the Philippines (PSC) has obtained a license agreement  from Southland
Corporation of Dallas, Texas for the use of the Seven-Eleven Convenience Store System in the
Philippines. The company's main mission was to introduce Filipino consumers to a whole new
retail concept. The first headquarters was on the 9th floor of the Century Tower Building in
Salcedo Village, Makati City. The so-called Fiveman team consisted of Francisco R. Sibal,
Executive Vice President. Ramon de Jesus, General Manager; Jose Branch, Sales Manager.
Wilfredo Villanueva, Accounting Manager, Teodoro Wenceslao, Store Operations Manager. In
October 1985, the first Seven-Eleven convenience store  opened on the corner of Harrison
Street and Libertad Street in Pasay City. 

Management has also developed a clever leasing program where lenders share the store's
profits if one store exceeds its target sales volume. This was an effective way to raise money to
build more businesses. 

TYPE OF RESTAURANT

Convenience shops are often franchised marketplaces that are open for a long period of time.
There are 8,760 hours in a year for convenience shops to operate. There are places and
enterprises that make the best use of all those hours. Convenience shops have grown in
popularity across Asia as consumers' need for ready-to-eat meals, beverages, and a wide range
of fast-moving consumer goods products has grown. In fact Hokkaido, Japan has 2,971 stores
(as of March 2018), which equates to 55.5 stores per 100,000 inhabitants or one store per 1,801
people. Tokyo, predictably, has the most retailers in total, with almost 7,280 locations, or 53.44
stores per 100,000 people. Although the Philippines can’t exceed that number, you can always
find convenience stores such as 7/11 in every city or province.
ORGANIZATIONAL STRUCTURE 
 
Menu
SEATING CAPACITY

As pandemic occurred most of the food establishments limit their seating capacity for the time
being. As a convenience store, potential causes of exposure include extended contact with a
customer with COVID-19 and touching your nose, mouth, or eyes after handling objects, cash,
or merchandise that consumers with COVID-19 have touched. As stated in MEMORANDUM
CIRCULAR NO. 21-19 Series of 2021, Dining facilities, restaurants, and other food preparation
establishments may provide indoor dine-in services at the premises. Should have only capacity
of 20% and a capacity of 50% for brunch or outdoor dining. But most customers of convenience
stores are in and out and they do not stay for a long period of time. However in the Philippines
most 7/11 provide seats for everyone whether you only stay for the air conditioning or need a
place for meet ups. On regular days before the pandemic they have seats that can
accommodate 10-15 individuals. 
COMPETITORS 

MINISTOP MINISTOP is a 24-hour convenience store chain

and a MINISTOP Co. franchise. Ltd., one of Japan's
major convenience store companies. The store sells
a wide range of commodities as well as a large
selection of ready-to-eat foods.

LAWSON Lawson is more than just a fast stop for food; you
can also transfer cash, pay utilities, and conduct
other operations such as withdrawing cash, check
balances, pay bills, fund transfer, and prepaid
autoload.

FAMILY MART Family Mart lives true to its aim of providing its
valued customers with fresh and high-quality items
delivered quickly and courteously in a safe, clean,
and appealing atmosphere.

ALL DAY All Day is a fast-growing, Filipino-owned

convenience store business with approximately 100
locations countrywide. Aside from an intriguingly
diverse grocery variety, the restaurant offers
economical fast food meals such as siopao,
hotdogs, pizza, sandwiches, salads, desserts, and
soft-serve sundaes. It also provides services such
as bill payment for major utilities and service
providers, as well as cellular phone load.

ALFAMART Alfamart is the first and only Super Mini-mart in the

Philippines that is found in communities. Alfamart
offers Filipino families basic goods, fresh meat,
poultry and vegetables as well as food-to-go
products. It also offers services such as ATM, bills
payment and prepaid load.
TOTAL MANPOWER

Cash counter service

 Customer service at the cash register, checkout duties, bagging, selling cash register
items (such as fast food), and processing services such as utility bill payment and
package delivery requests are the key responsibilities.

Ordering, product display planning and POP (Point of Purchase) creation

 Not only do you display things correctly, but you also arrange them to develop effective
marketing. This adds interest to your work and increases its effectiveness. As a result,
you individually develop and progressively assume greater responsibilities.

Maintenance personnel

 We all share cleaning duties according to the maintenance plan in order to maintain the
business looking nice and pleasant for customers and employees. Look at the shop
through the eyes of the customers to discover how you might improve it.

Those are the employees that are needed for 7/11 convenience stores, but sometimes if the
location is vulnerable to criminals the establishment hires guards for the safety of customers
and the employees.

Food Cost
 Product Retail Price

Crunch Time French fries

₱35
Crunch Time Potato Chips
₱44
Big Bite Siopao ₱30-₱42
Big Bite Hotdog ₱39-₱65
Nugets ₱85-170
Crunch Time Fried chicken
₱119-330
Dimsum Pork and chicken Siomai per pack
₱99
Bigtime meals Katsu Curry
₱79
Beef Gyudon and Chicken Teryaki
₱85
Busog Meal Shawarma Rice
₱49
Bigtime Meals Burger Stake
₱69
Busog Meal Sisig ₱29
Busog Meal Tuna Omelete ₱29
Busog Meal Bopis ₱29
Busog Meal Bopis Jumbo Giniling ₱52
Beverage Cost

Product Retail Price

Big Gulp ₱29-₱60
Iced coffee ₱24.00
Slurpee ₱29-₱60
Juice ₱31-₱39
Soft Drinks ₱20- ₱44
Water ₱18-₱60
City Blend Hot Coffee ₱20-₱39
Delight ₱39
Vitamilk Energy ₱15-₱30
Carlo Rossi Sangria 750ml ₱280
Companero Light 700ml ₱95
Emperador Deluxe 700ml ₱209
Franzia Red Wine 750ml ₱294
Fundador Light 1L ₱390
GSM Blue 350ml ₱52
Mojitos Gold Tequila 75cl ₱290
Mojitos Silver Tequila 75cl ₱200
Novellino Wild Blackberry 750ml ₱260
SWOT ANALYSIS

7-Eleven generates revenue through the sale of snacks, drinks, and other products to
customers via its retail stores as well as sales made via its online store and delivery services. It
also generates income from franchising fees from various companies and business owners that
operate stores worldwide. SWOT analysis is a strategic planning tool that can be used by 7-
Eleven managers to do a situational analysis of the company. It is a handy technique to
evaluate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) 7-Eleven is
facing in its current business environment.

STRENGTH WEAKNESS

- Good customer service - Higher capital is required

- Store is well equipped and well - Margins are low

man powered
- Competition is tough
- Regular and more customer are
available - Margins are low

- Clean and organized space - Competition is tough

- Complete items - Poor maintenance on the quality control

of a product

- Customer’s credit

OPPORTUNITIES THREATS
 - The location is in highway and - Government is considered as a threat
crowded place in the city because of the possibilities of
demanding a renovation due to road
- The goods serve as our daily widening
household stocks.
- There are different convenience store
- You can save based on retail in the like
earnings Alfamart,Lawson,FamilyMart,and

- It enhances managerial skills Ministop.

- Threats from the natural disasters like

typhoon and climate change.

Utilities

The water can be used in our business facilities daily will cost 2,500 monthly water bills amount
we pay in water utilities company. Our electricity bills almost 90 thousands monthly has become
one of the basic necessities of our business facilities, not just household but it extends its service
to large scale industries. We use electricity for all-purpose be it our electric appliances or huge
machines in industries. Having such importance in our lives and business, it is also crucial to pay
bill on time to enjoy uninterrupted power supply. Now no more waiting in long queues outside
the bill payment center or you don't have to even take out time especially from your tight
schedule to head to the center, all you need to do is make use of online payment services.

Advertisement

7-Eleven partnered with consumer product company Danone to bridge the gap between online
marketing and offline purchases. To do this, the companies tested Facebook’s Collaborative
Ads for the first time with the aim of optimizing ad delivery. Danone ran ads for the vitamin water
directly on 7-Eleven’s Facebook Page, using a video ad in collection format to promote the
product and offer vouchers that could be redeemed in 7-Eleven’s stores. The collection ad
format automatically displayed the product, using the offline product catalogue that 7-Eleven
had previously uploaded. The ads also included a call-to-action button that offered directions to
the nearest 7-Eleven store, where people could redeem the voucher using their loyalty card.
The ads were shown to Custom Audiences consisting of members of the 7-Eleven loyalty
program who had purchased B’lue, as well as to a lookalike audience based on them, and was
targeted to 20- to 30-year-olds in the Philippines.
Rent and Labor Cost

The rent is almost 230,000 monthly before establishing the business, the initial store supplies
(Php 170,000.00), initial merchandise (Php 800,000.00), construction costs (about 2.03 Million
Pesos), advance rent and deposit (depending on the lease terms) are all settled - total cash
outlay will range from 3.5 to 5 million pesos.

Depreciation

At 7-Eleven, we're continuously looking for ways to assist Franchisees in expanding their
businesses. Did you know that multi-unit franchisees own approximately 56 percent of 7-Eleven
franchises. Not only that but the majority of them began with just one store. We mean it when
we say we're a company built for growth.

Average 7-Eleven Service Crew monthly pay in the Philippines is approximately Php 9,276,
which is 29% below the national average. An initial investment of between 600,000 and 3.5
million to 5 million is what is required to become a 7-Eleven Franchisee, so it is certainly a big
decision to make. 7-Eleven's offer is a compelling one for many potential Franchisees.

Repair and Maintenance

All pre-operating expenses shall be for the account of the Franchisee, such as but not limited to:
a) rent and other administrative charges, b) utilities, c) security services, and d) all other costs
actually incurred during the construction of the Store until the Store is finally turned-over shall
be for the account of Franchisee.

Average Daily Sales

Our average daily sales 60 thousand per day even though the average size of a deal in your
sales pipeline can vary greatly depending on a variety of factors such as the product or service
available and the offer provided by a prospect or sales rep, you still need to determine the
average size of the deal in order to make a quick but credible sales forecast and strategy 

Daily Transaction Count

A normal 7-Eleven store sees roughly 900 to 1,000 people each day before the pandemic, with
each consumer paying an average of P64. Due to the lockout and mandated quarantines,
however, the average number of clients per day dropped to 532, while the average transaction
jumped to P89.02.As for the breakdown of 7-Eleven’s business, general merchandise accounts
for 78.88 percent of sales, food service and cup drinks at 17.60 percent, while bills payments
and ICT services at 3.52 percent.

Monthly Income
Money you make will depend on a lot of factors, including how well you:

Satisfy your customers’ needs by providing product assortment, value, quality, service, and a
clean, safe and friendly environment

Implement all 7 Eleven operating principles

Recruit and develop a top-rate, customer-focused store staff that can effectively communicate
with your customers

Monitor your sales trends while managing your expenses

In most states, the 7 Eleven Franchise Disclosure Document (FDD) provides some historical
financial performance data for existing stores.

Our target profit possible 90 thousands monthly

PERSONAL OBSERVATION AND ANALYSIS

When a pandemic erupted a lot of businesses suffered, they were forced to close their stores
especially establishments in the hospitality industry. 7 eleven is one of them if we remember
their store was open 24 hours everyday. People always come and go here because of the fact
that they almost have the things that we need on a daily basis from personal hygiene, bill
transactions to food on the go. Fresh meals with hot beverages, sweets, refreshments, practical
goods, and hygiene products are among the items available at 7 eleven. 7 eleven is a well-
known brand because of its capacity to implement successful improvements that define the
demands of the local consumer. With its facilities, everyday fresh items, and high-quality
customer service, 7 eleven is capable of meeting a strong demand in convenience retail.

Employees at 7 eleven are efficient and effective because the company hires exceptional and
competent employees who are capable of monitoring day-to-day workflow and are keen to work
tirelessly while promoting a positive shopping experience for their consumers. Employees are
trained by attending four to eight weeks of training prior to starting work. Employees are trained
in engaging workshops, and software training modules are used to train them regarding
customer service requirements. Furthermore, personnel at 7 eleven are instructed and trained
to have strong communication skills with consumers in order to maintain 7 Eleven's positive
reputation.

Despite the pandemic 7 eleven is expected to open at least 200 more stores this year. This
shows that the marketing strategy of the establishment is very effective to the consumers. Jose
Victor Paterno (PSC president and chief executive officer) stated that the company's financial
performance from April to May 2021 will be better than the previous year's second quarter due
to the government relaxing quarantine regulations to help the economy.

CONCLUSION 
Seven-Eleven was able to modernize the convenience store by using a tailor made information
system, continuous innovations and always placing high priority on the community and its
culture. • Seven-eleven continues moving forward in its role as a distribution group that can
respond to customer expectation through continuous innovation and group synergy. We have
nothing but a bright future in store for potential partners like you if we want to keep offering
modern convenience to current and emerging markets. Our personnel, we believe, are one of
the most significant resources in our company. We ensure that our personnel has a career
rather than just another job because of this belief. As we progress toward our objectives, the
members of our family expand as well. Yes, this is obvious, however I'm still not sure if the
problem is with the storeowners or with 7-Eleven.They are not only losing money, but they are
also putting an unneeded load on the environment. I am certain of this. I believe the number of
straws tossed is more than the number of people. Because 1 million bottles is a modest number
compared to the number of travelers, the calculation shows. Those who are unaware of the
method will not have enough time to react in the initial few moments. This happens to them on
occasion, and the number of people throwing away straws is rising with each passing year. The
outcome will be different for them. Also, take a look at the demographics and conduct a
comprehensive analysis. When it comes to calculating the percentage within each age group,
the overall percentage is likely to be greater.to the number of people who really toss away the
straws because fewer children are being born. The tendency would be age-related: as people
become older, they use the straw less and use it more. It's more than likely that they'll discard it.
Because the majority of responders in the larger scale survey were women because they come
from a relatively homogeneous group, the overall result suffers a little, yet there is still a
difference pattern. Aspect of the environment they are not in tune with their end users and may
be in violation of the law telling their customers (the store owners) to do things that are unethical
conduct business the way they do only to sell them the straws, or they will lose money. If the
business owners do not have to pay for the straws, they will save money (It is either one way or
the other). The enormous number of people who rely on straws for beverages could possibly be
a factor to consider by determining whether beverages are more or less likely to attract a buyer
wants a straw and which are not.
Recommendation

 7-Eleven and other organizations that are conducting business in the same manner should stop
with this and let the consumer have an option where they can choose to pick the straw by
themselves. This is likely to decrease the irritation level, make either 7-Eleven or the store
owners save money and decrease the unnecessary environmental impact that exists today. It
will also make them follow their policies better. They could also set up a system were the clerk
knows what beverages are likely to be bought from individuals that wants the straw compared to
which ones are not and have a distribution based on that. The service that I will recommend is
they need to not allowed the self-service during the pandemic because we don't know how they
touch the food by using their hands or not or they make that they used a plastic to cover their
hands because some people not using the tongs, especially if the customer is a teen or they
come by group of a teenager. We suggest to 7 eleven give also more chairs and table to have
many capacity to dine in in their store. Being one of the customer of 7/11 store I can say that
their workers are responsible, having huge patient and pleasant. All I can suggest is that they
will provide comfort room for their customers. Also, to have more tables and chairs so that there
will be no customers that will stand due to insufficient chairs especially in kiosk machine
sometimes the system is unavailable. My needs and wants are not satisfied. My suggestion is
the top/best product they’ve selling should increase its supply. Since other stores are having
other solutions 7-eleven stores should also have similar options instead of the procedure they
have today. Because a lot of straws are thrown away without never used being touched by 7-
Eleven and other businesses that use the same procedure stop doing this and adapt the needs
of your customers. The amount of irritability and the fact that the fact that the majority are
unconcerned and desire a change indicates that they would gain from it replacing the system
with one in which the user can take the straw by himself. If this is the case, they are violating
their own policies and should be punished. Change the procedure immediately. If this is not the
case, they are losing money and causing an inconvenience. They are having an unnecessarily
bad influence on the environment, which is also against their policies.