Protecting Our Brand Versus Protecting Our Numbers


No one can argue that we have a great brand. People like it, it’s established, our clientele is established, and the public in general believes in our brand. But it seems that lately our focus has shifted from our brand to “the numbers.” All we care about is achieving our numbers—store count, foot traffic, product assortment, and such—and now our brand is suffering as a result.

One area of focus has been increasing customer traffic into our stores in order to improve our numbers, and SEI wants to lower prices to accomplish that. But corporate is not improving our stores, so while the numbers may be going up, our brand is going down. Our competitors—like Wawa and Sheetz—are building brand new stores, but we are not uplifting the image of our existing stores. Indirectly, we are hurting our brand because we are not uplifting the image of our brand. There is such a huge difference between the newer 7-Eleven stores and the older ones. If you go to Philadelphia, for instance, you’ll see some stores from the 1960s and SEI is not spending a penny on updating them. If you go to another area, you’ll see a beautiful, modern, brand new 7-Eleven store. Our image is not consistent.

A good example of a company that is more focused on protecting its brand is Starbucks. They don’t lower their prices to bring in more traffic. They are consistent. Every location looks relatively the same. Their customer service is consistent. Even though they bring in new items, their guest count is consistent. They are more concerned with protecting their brand than they are with the numbers. In fact, a few years ago when Starbucks was struggling, it closed about 1,000 locations in order to save their brand.

We, on the other hand, launched Expand the Assortment (ETA) and that is nothing but adding more numbers. At first ETA was about bringing in a few new products to expand our offerings. Now it’s about bringing in more products and making our assortment bigger. In my opinion we spent $1 million in ETA not to build the brand, but to increase the numbers. It didn’t help. If you look at it from the franchisee’s point of view, the average store used to have $65,000 in inventory. Now we have $100,000 in inventory. With the increase in inventory, our turnover is slower and our gross profit has decreased. I used to have a 38-39 percent GP and now I have 35-36 percent GP. My GP has declined because someone thought ETA would improve the numbers.

There is a big disconnect between some folks in corporate and the reality of our stores. Until we stop caring about the numbers game and start uplifting our brand, only then will the brand’s future prevail. That is the direction we should be heading.