August 15, 2024
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Will 7-Eleven’s Booze on Tap Be a C-Store Game Changer?
7-Eleven has secured liquor licenses for almost all of its nearly 60 locations in the province of Ontario to not only sell beer and wine for takeaway starting Sept. 5 but also offer in-store consumption soon after, according to the Toronto Sun.
Customers will be able to enjoy their drinks on-site with a requirement that the location has a dining section with at least 10 seats separated from the rest of the store by a meter-high wall. From noon to 11 p.m. daily, alcoholic beverages will be served alongside the chain’s regular menu of prepared food, including chicken wings, pizza, hot dogs, and sandwiches.
7-Eleven’s shift comes as Ontario’s government passed legislation to enable C-stores, supermarkets, and gas stations to begin selling alcohol starting Sept. 5. Expansion of in-store drinking is planned in other provinces for 7-Eleven as local regulations are expected to become less restrictive.
Selling beer and wine complements moves by 7-Eleven, along with Sheetz, Wawa, Kum & Go, Casey’s, and other C-stores, to upgrade their foodservice offerings in recent years to drive traffic, as traditional offerings of “cokes and smokes” have lost appeal and fuel margins have eroded. In July, 7-Eleven started serving chicken nuggets for the first time as part of its summer offerings, as well as a breakfast skillet taquito, Philly cheesesteak taquito, and personal breakfast pizza.
“We look at ourselves as a restaurant first that sells convenience store items,” Marc Goodman, 7-Eleven Canada’s VP and general manager, told CityNews Toronto. “Traditional convenience store items like cigarettes and other products have continuously declined year after year. And so as an industry, we need to go and re-shape ourselves.”
Between 2019 and 2023, C-stores’ visit share relative to the other discretionary dining categories — which include breakfast, coffee, bakeries, and dessert shops; restaurants; and fast food and QSRs — climbed from 24.2% to 27.1%, according to a white paper from Placer.ai. The visit share of breakfast, coffee, bakeries, and dessert shops also increased slightly during the period.
Meanwhile, restaurants’ relative visit share shrunk from 13.8% to 11.7%, and fast food & QSRs’ share slipped from 51.8% to 50.6%.
“The continued growth of C-stores between 2021 and 2022, and again between 2022 and 2023, indicates that many diners are now embracing C-store food out of choice and just due to necessity,” the study said. “The rise of the breakfast, coffee, bakeries and dessert shops category alongside C-stores in the past five years may also highlight the current appetite for affordable grab-and-go food options. And with C-store operators embracing the shifts brought on by the pandemic and actively expanding their food options, diners are increasingly likely to consider C-stores for their portable meals and packaged snacks.”
According to the 2023 Convenience Store News Foodservice Study, 48% of C-stores currently offer in-store seating, while 38% provide some sort of outdoor dining area. Another 8% planned to add either outdoor or indoor seating this year or both. However, Pennsylvania’s Rutter’s is the only one known for securing a license to sell beer and wine for on-premise consumption.
BrainTrust
Perry Kramer
Managing Partner, Retail Consulting Partners
Georges Mirza
VP Product Management & Advisory, ComTask
Gary Sankary
Retail Industry Strategy, Esri
Recent Discussions
Discussion Questions
Could having alcoholic beverages on tap be a major customer traffic driver for 7-Eleven?
Do you see this as a strategy that other convenience store operators should follow?
Poll
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This is kind of Foxtrot-esque – trying to turn a convenience store into more of a community hub and social gathering place. However, given the ambience of most 7-Elevens, I am not sure how successful it will be. They’re not exactly the kind of space where people would want to sit down for a quiet and relaxing drink, Maybe as beverage while grabbing a quick bite to eat will work, and help drive some incremental revenue.
I don’t know that any consumer would consider 7-11 a restaurant. In a couple countries in Asia, 7-11 is *the* place to get quality quick eats and booze, so it’s not that this will automatically be unsuccessful. It will depend on where these stores are located within Ontario and if those locales lend themselves nicely to the upgrade in positioning.
A + for creativity and trying a new approach. However, it will need close monitoring as it seems like it could be a slippery slope. It is one thing for a group to grab the beverage of their choice and drink it where they want which mostly limits 7-11s liability to age validation. Now they are in a new world of training servers, increased liability exposure and labor around cleanliness and sanitation. Believe it or not those taps and everything that goes with them has a high maintenance labor cost as well as reducing the existing cooler space for to go items.
It will be an interesting experiment to monitor and see if it is going to drive any significant profitable food service traffic and also watch to see if in any cases it drives away some.
This won’t be a major driver of new customer traffic for 7-11, but if the seating area is separated away from noise and drafty entrance doors, and it feels more like a space to relax to enjoy wings and a beer, then sales and customer visits has upside. There are currently several new store examples in the south and southwest of the US where 7-11 has transformed the experience with a look and feel of a cool QSR concept, and much more customer centric than ever.
Beer is problematic in a retail establishment; there’s a huge amount of cleaning involved. I wonder how extensive the beta test has been.
This is Ontario, which, of course is Canada, which is equally “of course” not the U.S.. The chance of it happening in a systematic way south of the 49th Parallel is slim-to-none; I would call that a fact, independent of what I may think about it personally.
It is an opportunity to expand product offerings/services and increase foot traffic. I consider this to be a limited test to specific-sized stores, but it is certainly worth testing and exploring.
Well, as long as they don’t sell beer in the drive-thru…
But seriously, in-town locations with walk-in clientele might make something of this, if they are truly re-imagining the concept. The question in my mind is whether those 7-Elevens can pivot from a quick-trip destination to a “third place” where customers can feel comfortable sitting down for a quality quick meal and a delightful beverage – beery or caffeinated.
Since Starbucks has largely abandoned its third-place positioning, the door is open a crack south of the U.S. border. (Less sure they can draw customers away from Timmie’s though.) Convenience stores that turn themselves into neighborhood hubs with free WiFi and comfortable seating may win some trips that can partly make up for the decline in tobacco sales.
The addition of alcohol and beer-on-tap might be beneficial to 7-11, at least until all competitors do the same thing. The real concern I have is that 7-11 stores do not have the right atmosphere or furniture to accommodate a beer-on-tap service. Does the customer walk around the store with a glass of beer in hand?
In stores like Whole Foods or certain upscale gas stations, the customer experience is designed to seamlessly integrate beer-on-tap with the shopping environment. These stores often provide seating areas, high-top tables, and a more relaxed ambiance to enhance the drinking experience. If 7-11 wants to compete, they will need to consider similar enhancements to their store layout and atmosphere. Db
“We look at ourselves as a restaurant first…” Really? The margins in this restaurant business must be outstanding.
I’m trying to think when I might stop at a 7-Eleven and sit down and have a beer. Maybe when I’m on a road trip and have been driving for three or four hours and have several hours to go. There must be an easy on-off from the highway. But wait! I’m driving!
Aren’t there better places in Ontario to stop and have a brew?
Alcoholic beverages on tap seems like an odd service for convenience stores. While it might be successful in other countries, I don’t think Canadians or Americans will find convenience stores as an appealing environment to sit down and have a beer. As Perry Kramer stated, it is a creative idea, but “just because you can, doesn’t mean you should.”
Having worked directly with 7-Eleven in years past, visiting hundreds of stores in Mexico, the US, and Asia-Pacific, I’d say the idea has merit for some of the store locations but not all. For example, many of the stores in AP are small footprint stores with extremely high traffic. Fresh food and beverages are prolific revenue drivers, but there is barely enough room for extra inventory let alone a separate seating area to consume an alcoholic beverage. My advice would be to test in Mexico, where many of the new concept remodel stores are big, bright with plenty of space for indoor and outdoor seating. A large screen TV + on-tap beer + soccer could prove to be a winning formula.
Makes total sense. Has to either be a brand new format with the customer experience in mind, or if a remodel, must be added space and a new floor plan. No way the concept works in the cramped space of many existing locations.
I’m always an advocate for retailers, focusing on what they do best. Serving alcohol and all the risks and issues associated with that seems to be overreach at best.
It is still a 7-eleven. Meaning-unless you are going in, grabbing a beer, and leaving in your car (another possible bad decision), you are having a beer in…..a 7-eleven.
Innovative? Sure. However, they did to do a much bigger makeover in order to make beer by the tap interesting, or enjoyable.
Others can follow suit-I am eager for the gas station TV ads at the pump to start imploring me to drink more (not) – but this is not going to move the needle much if at all.
Testing is always good and warranted. The real test is whether shoppers will like it enough to justify the costs needed.
It’s difficult to imagine a 7-Eleven as a restaurant or as akin to your local bar or pub. Given the loosening of the regulatory requirements, I understand the need to add beer. However, since other convenience stores are doing the same, there’s no marked advantage accruing to 7-Eleven. There’s nothing differentiable here, which suggests that the locations will encounter additional operational complexity and potentially negative margin impact.
If you operate a C-Store and find yourself needing to drive more traffic, then you aren’t conveniently located and need to relocate. Focus on a clean store, clean bathrooms, and a quick checkout. That will get you far as a C-Store. I don’t see this as a viable strategy for others to emulate nor do I see it even being a trend (at least I hope not).
The complex state by state alcohol regulations across the US will stop this from becoming a major game changer, but it does point to the continued “upscaling” and redefining of what a traditional C-store looks and feels like. The larger story here is the ongoing shift in this food channel away from cokes and smokes, and sales data proves customers are taking notice.
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This is kind of Foxtrot-esque – trying to turn a convenience store into more of a community hub and social gathering place. However, given the ambience of most 7-Elevens, I am not sure how successful it will be. They’re not exactly the kind of space where people would want to sit down for a quiet and relaxing drink, Maybe as beverage while grabbing a quick bite to eat will work, and help drive some incremental revenue.
I don’t know that any consumer would consider 7-11 a restaurant. In a couple countries in Asia, 7-11 is *the* place to get quality quick eats and booze, so it’s not that this will automatically be unsuccessful. It will depend on where these stores are located within Ontario and if those locales lend themselves nicely to the upgrade in positioning.
A + for creativity and trying a new approach. However, it will need close monitoring as it seems like it could be a slippery slope. It is one thing for a group to grab the beverage of their choice and drink it where they want which mostly limits 7-11s liability to age validation. Now they are in a new world of training servers, increased liability exposure and labor around cleanliness and sanitation. Believe it or not those taps and everything that goes with them has a high maintenance labor cost as well as reducing the existing cooler space for to go items.
It will be an interesting experiment to monitor and see if it is going to drive any significant profitable food service traffic and also watch to see if in any cases it drives away some.
This won’t be a major driver of new customer traffic for 7-11, but if the seating area is separated away from noise and drafty entrance doors, and it feels more like a space to relax to enjoy wings and a beer, then sales and customer visits has upside. There are currently several new store examples in the south and southwest of the US where 7-11 has transformed the experience with a look and feel of a cool QSR concept, and much more customer centric than ever.
Beer is problematic in a retail establishment; there’s a huge amount of cleaning involved. I wonder how extensive the beta test has been.
This is Ontario, which, of course is Canada, which is equally “of course” not the U.S.. The chance of it happening in a systematic way south of the 49th Parallel is slim-to-none; I would call that a fact, independent of what I may think about it personally.
It is an opportunity to expand product offerings/services and increase foot traffic. I consider this to be a limited test to specific-sized stores, but it is certainly worth testing and exploring.
Well, as long as they don’t sell beer in the drive-thru…
But seriously, in-town locations with walk-in clientele might make something of this, if they are truly re-imagining the concept. The question in my mind is whether those 7-Elevens can pivot from a quick-trip destination to a “third place” where customers can feel comfortable sitting down for a quality quick meal and a delightful beverage – beery or caffeinated.
Since Starbucks has largely abandoned its third-place positioning, the door is open a crack south of the U.S. border. (Less sure they can draw customers away from Timmie’s though.) Convenience stores that turn themselves into neighborhood hubs with free WiFi and comfortable seating may win some trips that can partly make up for the decline in tobacco sales.
The addition of alcohol and beer-on-tap might be beneficial to 7-11, at least until all competitors do the same thing. The real concern I have is that 7-11 stores do not have the right atmosphere or furniture to accommodate a beer-on-tap service. Does the customer walk around the store with a glass of beer in hand?
In stores like Whole Foods or certain upscale gas stations, the customer experience is designed to seamlessly integrate beer-on-tap with the shopping environment. These stores often provide seating areas, high-top tables, and a more relaxed ambiance to enhance the drinking experience. If 7-11 wants to compete, they will need to consider similar enhancements to their store layout and atmosphere. Db
“We look at ourselves as a restaurant first…” Really? The margins in this restaurant business must be outstanding.
I’m trying to think when I might stop at a 7-Eleven and sit down and have a beer. Maybe when I’m on a road trip and have been driving for three or four hours and have several hours to go. There must be an easy on-off from the highway. But wait! I’m driving!
Aren’t there better places in Ontario to stop and have a brew?
Alcoholic beverages on tap seems like an odd service for convenience stores. While it might be successful in other countries, I don’t think Canadians or Americans will find convenience stores as an appealing environment to sit down and have a beer. As Perry Kramer stated, it is a creative idea, but “just because you can, doesn’t mean you should.”
Having worked directly with 7-Eleven in years past, visiting hundreds of stores in Mexico, the US, and Asia-Pacific, I’d say the idea has merit for some of the store locations but not all. For example, many of the stores in AP are small footprint stores with extremely high traffic. Fresh food and beverages are prolific revenue drivers, but there is barely enough room for extra inventory let alone a separate seating area to consume an alcoholic beverage. My advice would be to test in Mexico, where many of the new concept remodel stores are big, bright with plenty of space for indoor and outdoor seating. A large screen TV + on-tap beer + soccer could prove to be a winning formula.
Makes total sense. Has to either be a brand new format with the customer experience in mind, or if a remodel, must be added space and a new floor plan. No way the concept works in the cramped space of many existing locations.
I’m always an advocate for retailers, focusing on what they do best. Serving alcohol and all the risks and issues associated with that seems to be overreach at best.
It is still a 7-eleven. Meaning-unless you are going in, grabbing a beer, and leaving in your car (another possible bad decision), you are having a beer in…..a 7-eleven.
Innovative? Sure. However, they did to do a much bigger makeover in order to make beer by the tap interesting, or enjoyable.
Others can follow suit-I am eager for the gas station TV ads at the pump to start imploring me to drink more (not) – but this is not going to move the needle much if at all.
Testing is always good and warranted. The real test is whether shoppers will like it enough to justify the costs needed.
It’s difficult to imagine a 7-Eleven as a restaurant or as akin to your local bar or pub. Given the loosening of the regulatory requirements, I understand the need to add beer. However, since other convenience stores are doing the same, there’s no marked advantage accruing to 7-Eleven. There’s nothing differentiable here, which suggests that the locations will encounter additional operational complexity and potentially negative margin impact.
If you operate a C-Store and find yourself needing to drive more traffic, then you aren’t conveniently located and need to relocate. Focus on a clean store, clean bathrooms, and a quick checkout. That will get you far as a C-Store. I don’t see this as a viable strategy for others to emulate nor do I see it even being a trend (at least I hope not).
The complex state by state alcohol regulations across the US will stop this from becoming a major game changer, but it does point to the continued “upscaling” and redefining of what a traditional C-store looks and feels like. The larger story here is the ongoing shift in this food channel away from cokes and smokes, and sales data proves customers are taking notice.