Here's a timely article talking about the difference between 7-Eleven stores in North America versus Japan, and why the Canadian company, Alimentation Couche-Tard, wants to buy the Japanese company for $47 billion:

So far, owner Seven & i Holdings Co. hasn’t been able to replicate that success at its 13,000 US and Canadian stores, better known for their constantly rolling hot dogs and 30-ounce soft drinks than their fresh food or their ability to inspire effusive posts from social media influencers. The Tokyo-based company, which has been closing underperforming North American stores faster than it’s been opening new ones, is now the target of a $47 billion takeover bid by a Canadian rival that says it can do a better job translating that overseas magic to the market.

I have no idea if this will happen, but Couche-Tard has been trying to buy the company since 2005. If successful, this will create the largest convenience store operator in the world. It will also go down as one of the largest foreign takeovers in Japan. (On a related note, Couche-Tard tried to buy French grocery chain Carrefour SA in 2021, but that was blocked by the French Finance Minister.)

What is clear, though, is that there's an obvious user-experience gap between the stores in Japan and the stores in Canada and the US. As we talked about here, convenience stores in Japan serve solid food and act very much as community hubs. I didn't know this until right now, but in Japan, people also use these stores to do things like send parcels and pay utility bills, and top chefs regularly judge the food.

However, this is based on a supply-chain network that is, at least right now, unique to Japan:

In Japan, which is much smaller, the chain relies on a robust supplier network, where inventory and food preparation take place at more than 150 factories churning out breakfast, lunch and dinner. Product lineups and displays change quickly based on consumer tastes, with each store responsible for analyzing the sales of every product and adjusting orders to reduce waste and control inventory. It’s a management method known as tanpin kanri, which was even taken up as a Harvard Business School case study. “Japan’s convenience stores’ food preparation central kitchens and logistics infrastructure would be more challenging to establish and operate efficiently over vast areas in the US,” Boston says.

There appears to be universal consensus that the key to unlocking additional value is more fresh food and overall better offerings. And presumably Couche-Tard is of the opinion that it will be a better operator and that it can figure out whatever supply chain is needed. Time will tell. But I find it interesting that all of this is arguably about creating a kind of "local corner store" that better serves people's needs.

Cities used to have these in spades. But then we zoned them away, scaled everything up, and optimized around rolling hot dog cookers and big gulps. So in many ways, this story is about a return to fundamentals. It's about figuring out a way to serve quality products to local neighborhoods, in a globalized world. That sounds simple enough, but it's clearly not easy.

Cover photo by Lisanto 李奕良 on Unsplash