How will 7-Eleven recover in 2025? Former CEO focuses on these key points
After experiencing financial setbacks, the closure of 444 stores, and acquisition turmoil in 2024, how 7-Eleven will recover in 2025 has drawn significant attention. Former CEO James Keyes reflects on the bankruptcy lessons of 1990, emphasizes the importance of change, and focuses on whether the company's newly launched "New Standard" large-format food store can succeed. Human capital strategist Michael D. Brown focuses on store experience differentiation and talent recruitment challenges. Meanwhile, the direction of Couche-Tard's acquisition offer and Ito-Kogyo's management buyout proposal are also key points of industry observation.
When predicting how 7-Eleven will perform this year, former CEO James Keyes looked back at a period more than three decades ago when the convenience store retailer faced similar headwinds. This comes after the company experienced a difficult year in 2024.
In 1990, Southland Corporation, 7-Eleven's former parent company, filed for Chapter 11 bankruptcy protection after failing to recover from the 1987 stock market crash. Southland eventually sold off a significant portion of its assets—including nearly 500 convenience stores to Circle K—to reduce its debt. 7-Eleven was losing ground in the big cities where it had a foothold.
Keyes, who was then vice president of 7-Eleven's national gasoline business, attributed the company's struggles to its inability to evolve with the times and meet customer needs.
"As human beings, we tend to hold on to what works in the present," Keyes said in an interview. He served as 7-Eleven's CEO from 2000 to 2005. "That's where 7-Eleven was in 1990... They were unwilling to adapt to other convenience needs, and that resistance to change is exactly what can cause a company to fail."
The bankruptcy also allowed Seven-Eleven Japan—now a subsidiary of 7-Eleven's parent company, Seven & i Holdings—to acquire a 70% stake in Southland. Keyes said the new ownership enabled 7-Eleven to transform its products and brand.
"We started traveling the world looking for convenience products," he said. "That's when the first ATMs went into all the stores, and it was also when we started introducing fresh food after being inspired by our Japanese franchisees."
About 35 years later, 7-Eleven finds itself in trouble again.
While the company is not on the verge of bankruptcy, it has just come off a year marked by significant financial setbacks, facing increasingly tough economic challenges driven by inflation. Additionally, 7-Eleven faced a takeover attempt by Alimentation Couche-Tard over the summer. This triggered a potential management buyout by its shareholder Ito-Kogyo Co., which is affiliated with Junro Ito, vice president and representative director of Seven & i.
In 2025, the convenience store retail world will be watching 7-Eleven closely. Here's what experts will be focusing on as the company seeks to bounce back.
Building the 'New Standard' Experience
7-Eleven's struggles last year culminated in October when it revealed it would close 444 underperforming convenience stores in the U.S. Due to economic headwinds, 7-Eleven cut its fiscal 2024 operating income forecast by nearly 28%, from $2.9 billion to $2.1 billion, CEO Joseph DePinto said at the time.
Although the announcement shocked the industry, Keyes said he wasn't too surprised. Retailers like 7-Eleven that are active in mergers and acquisitions often end up closing inefficient stores that are poorly located or may overlap with other locations.
"This is something the industry has been going through," he said.
The former 7-Eleven CEO said he isn't too focused on the impact these closures will have on the company's 2025 performance. Keyes is focused on what comes next.
Less than two weeks after announcing the store closures, 7-Eleven outlined plans to open more than 600 larger, food-focused stores in the U.S. by the end of 2027. These stores will showcase a new prototype the company internally calls the 'New Standard' store. Compared to the rest of its locations, these stores offer a wider product assortment and a broader food and beverage offering, in addition to in-store seating and electric vehicle charging stations.
Since 2010, 7-Eleven has more than doubled its store count in North America. But Keyes said that as the company focused on scalability, it relied more on its efficient central kitchen system to supply food to stores rather than preparing fresh food on-site.
Keyes said he is interested in seeing how 7-Eleven develops its food service to make it the centerpiece of this new store design and the company's overall value proposition. He believes it won't be easy.
"In-store fresh food preparation has always been a complex thing," he said. "It adds a layer of complexity for small-format stores and is difficult to execute because it inherently limits your menu."
Michael D. Brown is a human capital strategist who spent nearly 20 years in sales and operations roles in the retail divisions of BP and Shell. He said he wants to see how 7-Eleven promotes an end-to-end food experience at its New Standard stores. He added that since 7-Eleven stores have historically been designed to get customers in and out as quickly as possible, the company must now change that perception and build entirely new messaging.
"What makes it so special that I'm willing to pay an extra dollar rather than go to Panera Bread?" Brown said of the New Standard stores.
Brown, who is currently senior managing partner at Global Recruiters in Buckhead, Georgia, also said he is curious how 7-Eleven will recruit and retain employees for these stores. Because the stores are larger and focused on fresh food, New Standard locations will require more staff—and more staff qualified to work in food service.
"For these new store formats, it's not just about training someone to work at the register," Brown said.
Brown stressed that he also wants to see 7-Eleven create a unique experience through its New Standard stores to enhance the company's reputation. He compared 7-Eleven to Buc-ee's and Wawa, which have built strong fan bases with their massive restrooms and submarine sandwiches, respectively.
Brown believes 7-Eleven has not yet created that kind of memorable experience in its stores. But it has the opportunity to change that with the new locations.
"I certainly want to know what the experience will be and what will differentiate them from competitors," he said.
Couche-Tard's Takeover Bid and Management Buyout
Both Keyes and Brown said they are also eager to see whether 7-Eleven will be sold to Couche-Tard or undergo a management buyout.
Keyes, who spent twenty years at 7-Eleven and served as CEO for five, said both paths highlight the confidence that Couche-Tard and Seven & i have in 7-Eleven's vision and future. He added that while either deal would be difficult to finalize, either one would reflect the natural evolution of 7-Eleven as a company and global brand.
"I admire [Couche-Tard Chairman] Alain Bouchard's confidence in and desire to acquire 7-Eleven, but I also admire Junro Ito's confidence in 7-Eleven's future," Keyes said.
Brown, meanwhile, is watching to see if these deals actually happen, noting that all the noise could distract 7-Eleven from its focus on the in-store experience. He added that 7-Eleven's New Standard store format and increased focus on food service could be a signal to shareholders that the company wants to remain independent.
"I think 7-Eleven will be under pressure to make a bolder case for why staying the course is the better option rather than letting outsiders come in to create better shareholder returns," he said.
Brown said the discussions around a sale to Couche-Tard or a management buyout could also affect how current and potential employees view 7-Eleven, as some employees may not want to stay at a retailer on the brink of such significant change.
"If it's not Couche-Tard today, who will it be tomorrow?" Brown said.