Inside 7-Eleven’s new drive-through concept

Date : 24 March 2021

Charles Chan

Senior Retail Analyst

7-Eleven has opened its third Evolution Store in Dallas and sixth in the U.S. This time, the store is connected to Laredo Taco Company and features a drive-through concept.

7-Eleven's sixth Evolution Store 

Source: 7-Eleven / M Booth

The store serves tacos on handmade tortillas with chorizo, barbacoa, and carnitas. More than 30 drink options are also available, including Slurpees and hot and iced coffee. Customers can try different flavoured sodas (not available in typical 7-Eleven stores), e.g. ginger beer, black cherry, pineapple coconut, diet key lime, and diet cherry vanilla. The drive-through operates from 5 am to 10 pm Sunday through Thursday, and through 11 pm on Fridays and Saturdays.

Source: 7-Eleven / M Booth

Customers inside the store can enjoy wine-based frozen margaritas on tap, flavours available include classic, strawberry, watermelon, sangria, melon and pear.

Source: 7-Eleven / M Booth

Source: 7-Eleven / M Booth

Source: 7-Eleven / M Booth

Our view

7-Eleven first launched the Evolution Store concept in March 2019 (originally known as Lab Store). The format is designed and serves as a real-time testing ground, where customers can try the retailer’s latest initiatives. The features that resonate with shoppers are refined, before being incorporated into 7-Eleven’s current and new store standards. Some of the key features of 7-Eleven’s Evolution Store concept can be found here. Its latest location is the first of its kind for 7-Eleven in the U.S. However, drive-through it is not new in convenience retail. Wawa recently opened its first drive-through in Westampton, N.J., and a standalone drive-through in Falls Township, Pa.

While in the Middle East, especially in UAE, convenience stores with drive-throughs have traded for many years and are widely popular. Forecourts and the infrastructure are built for cars. Forecourts are also larger and given the hot climate, and the fact that cars are an essential part of life, curbside pick up and drive-throughs are well-established even for small independent operators.

In Brazil, the largest convenience store chain in the country AmPm operates some digital drive-through forecourts that allow customers to make purchases without leaving the vehicle. To access the menu, customers scan a QR Code at the forecourt, order and pay via mobile, and then the items are delivered to the customer’s car by a store employee.

In Asia, CU in South Korea has launched a new drive-through service that allows shoppers to place and collect orders from their cars. Overall, however, drive-throughs in convenience have not quite taken-off in the region. Forecourts tend to be much smaller, with relatively few missions outside of fuel, and the proportion of standalone convenience stores verses forecourts are heavily skewed to the former – North America is vice versa. In dense urban cities and markets like Hong Kong, for example, a staff member will help fill up the car and take any orders for products across the driver side window. As such, there is no designated space to drive-through, and food and drink missions are clearly secondary. 

7-Eleven’s six-point growth plan in North America

  1. Provide consistent customer experiences
  2. Propose new food and beverage experiences
  3. Optimise product selections
  4. Promote digital strategies
  5. Modernise stores
  6. Expand the store network

On private label, 7-Eleven achieves US$1bn in sales and this grew at CAGR of 22%. Private label has an average margin of 55% and Proprietary Beverages (cold-pressed juices, smoothies, etc) average 62% margin.

On digital strategies, its 7Rewards loyalty program has 40m registered members. Last year, the retailer launched mobile-checkout, digital wallet and fuel loyalty. 7Now 30 minutes delivery is available at approx. 2,000 stores, and volume on the platform has increased 400% since February 2020. While transaction size is also roughly double the average in-store basket.

Subject to regulatory approvals, 7-Eleven’s acquisition of Speedway is expected to complete within the next couple of months.

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