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The Big Gulp

How 7-Eleven plans to put the bodega out of business.

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Midday on a Wednesday, Norman Jemal and his 7-Eleven field consultant, Kunta Natapraya, huddle around a computer in the back storeroom-office of Jemal’s 28th Street franchise, poring over a tiny-fonted spreadsheet. Before them lie the stories of thousands of snacks consumed. Along with a sugar-free Slurpee Lite, 7-Eleven corporate is about to roll out an empanada, and Jemal and Natapraya need to make room for it by eliminating another occupant of the hot-food case here at 28th Street and Third Avenue, one of Jemal’s three Manhattan 7-Elevens. Natapraya is something like a convenience-store social worker. He visits New York’s 7-Eleven stores on a weekly basis to help franchisees improve their bottom lines and is their main point of contact with corporate.

Eventually, the data turn up a clear laggard: the spicy beef patty. (The best performer was the $1 pizza slice.) Jemal had guessed it would be the mild beef patty. Close, but guesses won’t do—the spicy patty, whatever its merits, will be replaced by a different meat pastry. Next, the pair starts crunching the numbers on Slurpees—how much have their recent efforts improved Jemal’s bottom line on the iconic product? Last July, 28th Street sold 8,000 Slurpees for an average price of $2 each. On its best day, it sold 291. (Slurpees, Natapraya tells me, have “unbelievable” sales numbers in Manhattan.) But back then Jemal’s gross profit on the drinks was a paltry 62 percent—he was losing too many bins of syrup to expiration because of overordering. Natapraya says that through more timely Slurpee-syrup orders, the two have raised gross profit to nearly 80 percent, which could generate $165 in previously untapped profit every day during the upcoming summer. That’s $5,000 a month extra on Slurpees alone, to be shared between ­Jemal and the 7-Eleven company.

Jemal and Natapraya have been so successful at raising profits through efficient ordering that corporate asked them to give a presentation on the matter for a nationwide call, in which 7-Eleven bigwigs learned how the pair increased revenue without charging a dime more to the consumer by leveraging 7-Eleven’s proprietary Retail Information System. The RIS, as it’s lovingly called, is operated via a device that looks like a massive PalmPilot, a large tablet computer with a stylus. If you have five Buffalo-style pasta salads on Monday night and aren’t sure whether to reorder, it’ll tell you, for example, how many Buffalo pasta salads typically sell in your area on warm Tuesdays.

There’s nothing revolutionary about basing decisions on sales data, but 7-­Eleven managers can get at that data much more easily than their counterparts at unwired corner bodegas, and the company believes that’s a huge advantage. As a 7-Eleven proprietor in New York City, ­Jemal—a gregariously goofy 29-year-old—is currently the member of a fairly small club. But the company, the Dallas-based subsidiary of Tokyo-based Seven & i Holdings Co., Ltd., has its sights set on Manhattan, which at the moment has nineteen stores. If 7-Eleven gets its way, hundreds of Big Bites, hot-dog-shaped cheeseburgers, and Buffalo chicken taquitos will be rotating silently in more than 100 locations on the island by 2017. The company comes to New York armed not just with data-­processing tools but also with a system called the Business Conversion Program, whose stated goal is to entice mom-and-pop shops into becoming 7-Elevens. Will bodegas be able to compete when they rarely even use scanners to keep track of inventory? When they hire extra labor just to sell sandwiches for a pittance? When they stock outdated and unpopular items like canned clam sauce and mackerels?

The company couldn’t ask for a more enthusiastic candidate than Jemal to join the vanguard of its invasion. “Other franchises pitch their name,” he says. (He researched several franchise chains before opening his first store.) “7-Eleven, which I think has a great name, pitched their system.” Jemal, who’s from Long Branch, New Jersey, grew up in the retail world. His family owned the Wiz chain of electronics stores, which was famous for its somewhat ridiculous commercials (“Nobody Beats the Wiz!”). Dazzled by the Retail Information System, and enticed by the dearth of 7-Elevens in New York—“It was just crazy to me that such a void existed, because it’s hard to find the void in this day and age”—Jemal has also opened stores at 33rd and Madison and, as of last month, on St. Marks Place.

“It’s part of an overall growth strategy,” explains Sean Duffy, corporate’s senior vice-president of development. “We saw an opportunity in Manhattan—huge traffic counts, huge pedestrian traffic, [and] the need for convenience.” 7-­Eleven is betting that time-starved New Yorkers will come to appreciate the convenience of its more-than-just-­sandwiches spread of fresh food, which has, to 7-Eleven’s credit, expanded considerably from its stoner-pleasing roots. While the company is still talented at making food cylindrical in a way God never intended, and Buffalo-ing things that the Lord might never think to Buffalo, it has also introduced fruit and yogurt cups, salads, and other healthier items. “If we went into Manhattan twenty years ago with our normal offerings, I don’t know if it would be as appealing,” says Duffy. A company exec told the trade publication QSR (which stands for “quick-service restaurant”) in 2008 that 7-Eleven wanted its stores’ ­prepared-foods sections to start resembling those at high-end local grocers. “Nice wines, fresh-baked pizza—it’s not what you think of when you think of convenience stores,” one franchisee said. “But it is what they’re becoming.”


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