7-Eleven Corporation: Human Resource Management Strategies and

Impact on the Convenience Store Industry

Abstract

This study examines the problems faced by 7-eleven in regard to human resource management.
The paper covers aspects, such as the company’s operations model, business strategies, financial
performance, and corporate social responsibility. It emphasizes the current status quo in the
country it operates in and the significance of 7-Eleven's franchise system in driving global
expansion, empowering local entrepreneurs to own and operate individual stores. The paper
includes a SWOT analysis, revealing 7-Eleven's strengths, weaknesses, opportunities, and threats
while addressing challenges faced in the United States and Australia, such as labor shortages and
wage concerns.

Keywords:
7-Eleven, Multinational retailer, Convenience stores, Franchise system, Market presence,
Business strategies, Corporate social responsibility, Labor shortages, Wage concerns, Global
expansion

I. Introduction
7-Eleven is a multinational retailer with over 80,000 convenience outlets, predominantly in
North America and Asia. These establishments are often small and provide a limited selection of
food, beverages, and fast-moving merchandise, all while being open for an extended period.
While it is a Tokyo-based Seven & i Holdings subsidiary, its main offices are in Dallas.
Convenience stores stand as beacons of efficiency, offering various goods and services that cater
to our every need. They stand ready to serve the Mission from the early hours of dawn until the
late hours of the night. to make customers' day more awesome by delivering fast, personalized
convenience — when, where, and how they want it., convenience stores have been steadfast
companions through every twist and turn of our lives. This paper discusses 7-Eleven's history
and significant events, operations, and strategies in penetrating the global market, its global
presence in providing service, its corporate responsibility to the environment, and its challenges
as it expands through new cultures and backgrounds. Trying to understand just how much of a
powerhouse 7-Eleven is compared to similar organizations shedding light on what it took to
establish itself as a significant global player in the convenience store industry (Lewis, 2023).
HR policies, talent acquisition, employee turnover rates, training and development initiatives,
employee engagement, diversity and inclusion efforts, and overall workforce management.
Statement of the Problem:
7-Eleven Corporation, a prominent player in the convenience store industry, confronts challenges
in optimizing its Human Resource Management (HRM) strategies to maintain competitiveness
and market presence.
Analyzing the impact of HR on 7-Eleven is crucial in fostering a harmonious and positive work
environment. According to Comparably (2023), the employees of 7-Eleven provide their CEO,
Joseph M. DePinto, with a rating of 54/100. However, the HR team rates 7-Eleven poorly,
placing it in the bottom 5% among companies of similar sizes. The human resources department
at 7-Eleven evaluates the overall culture at 49/100, slightly lower than the company-wide
average of 53/100. Notably, the Product department (73%) achieves the highest culture score,
with Engineering (71%) and Marketing (66%) following closely behind. Employees rate their
experience at 7-Eleven as a C-, indicating less satisfaction. The company's culture ranks in the
bottom 10%, leadership in the bottom 10%, environment in the bottom 30%, and happiness in
the bottom 5% when compared to similarly sized companies.
This study specifically addresses the strategies applied by 7-eleven management to answer this.
The study seeks to achieve the following objectives:
1. To determine the problems in the HR management specific in a country.
2. To analyze the strategies adopted by 7-eleven to solve the problems.
3. To give insights on how to answer the problem.
II. Business Strategies
Product. Sandwiches, salads, pizzas, munchies, bakery goods, ice cream, petrol, wireless
accessories, and personal care products are all available at 7-Eleven. Customers benefit from a
one-stop shopping experience available throughout the day due to the company's extended
operation hours.
Pricing. Compared to other retailers, 7-Eleven maintains competitive prices for products like
coffee, chips, bread, and eggs, similar to other convenient stores. However, privately labeled
items such as Slurpees and Big Gulp are significantly more expensive due to their popularity and
exclusivity. Customers are willing to pay a premium for the convenience of one-stop shopping
and extended store hours, making them happy with 7-Eleven's offerings.
Place. 7-Eleven's journey from a Dallas-based store to a global presence signifies remarkable
growth and expansion. The company's primary trade channel comprises its network of retail
stores, strategically situated in high-traffic areas for easy customer access. The firm expanded
internationally in 1969, and currently, it operates over 80,000 outlets in 19 countries. The rise of
e-commerce has prompted 7-Eleven to expand its trade channel by offering online delivery
services. Customers can now conveniently order products through the website or mobile app.
Engaging in wholesale and distribution channels, 7-Eleven collaborates with suppliers to
maintain a steady supply of goods for its stores. Additionally, the company forms partnerships
with other businesses, promoting exclusive products and engaging in cross-promotions with
retailers.
Promotion. 7-Eleven uses an omnichannel approach for promotions, including internet
platforms, events, and physical locations. To promote the advantages of Slurpee beyond
refreshment, the firm launches a 'shoulder' campaign. In honor of 7-Eleven Day, the stores give
free Slurpees to entice more consumers. To lure new consumers, tiny Slurpees are given out
alongside fuel purchases. Customers are given special offers such as gift cards, the 7-Eleven
Universal Fleet Card, and Prepaid Cards. The firm participates in activities such as the Shelter
Makeover Project, Unisel Voice for Refugees, and Slurpee Tasting Test to raise brand
awareness. A new advertising campaign depicting the brand's progression through the years was
unveiled in 2021.
People. 7-Eleven employs over 45,000 people, providing incentives like health and dental care
packages, profit sharing after one year, and an Employee Assistance Program to support
employees facing financial or legal difficulties. Beyond its staff, the corporation undertakes
projects such as the A-Game project, which attempts to educate and develop young people, and
the Operation Chill project, which tries to reduce crime and enhance ties between police and
youth.
Process. With over 80,000 retail locations worldwide, 7-Eleven is a substantial global
convenience store chain. Customers may discover various food and beverage options, and most
establishments are open 24 hours a day, from breakfast to midnight. Cash or credit/debit cards
are accepted, and a bill payment app is accessible. Prepaid and gift cards are also accepted.
Customers may use the 7-Eleven smartphone app to order items and pay bills. 7-Eleven
collaborates with logistics firms such as DoorDash and Postmates to improve customer service to
provide on-demand delivery. 7-Eleven stayed open as an essential retailer throughout the Covid
pandemic, aiding the community.
Physical evidence. 7-Eleven runs convenience stores in 18 countries worldwide, with a new
store opening every two hours. The retail chain presently has over 80,000 locations. It provides
diverse products for various meals and snacks, including everyday items such as coffee, chips,
and bread, and notable brands such as Slurpees and Big Gulp. Some establishments offer chairs
for customers to enjoy food as they shop. 7-Eleven created a smartphone app that allows online
meal ordering, bill payment, and reward point redemption to appeal to tech-savvy customers.
The app proves the company's dedication to consumer convenience and modernization.
Franchise System
Seven-Eleven's success is only possible with its franchise network, as it is difficult for one
business to develop an indestructible empire of over 80,000 convenience stores internationally.
The franchise system is critical to Seven-Eleven since it significantly contributes to its
expansion. Business operations and responsibilities are separated between the corporate office
and the franchised stores. Everything is based on a highly transparent accounting system to
maintain a reasonable balance and control over the company's reputation and brand.
Franchisees can concentrate on store operations and sales thanks to the comprehensive support
system that Headquarters has prepared. In exchange for 43 % of gross income, Headquarters
constructs product development and delivery systems, offers Point-of-Sale (POS) ordering
systems, consulting services, accounting services, and audit services, installs and remodels
facilities, covers the cost of electronic data processing and promotion (advertising) costs, pays
80% of utility costs, and pays 15% of the cost of disposing of unsold goods. As is evident, the
franchisor's corporate office does everything possible to support the franchisee so that it can
focus solely on store operations such as hiring employees, maintaining store appearance, and
providing customer service.
There are two types of contract agreements: type A and type C. Under both conditions, the
agreement term is 15 years, and the Headquarters pay 80% of utility expenditure and 20% by the
franchisee. The difference lies in the ownership of the store and deposit upon signing the
agreement; in type A agreement, the store is possessed by the owner, and the owner has to
deposit P1,200,000, which includes – P200,000 for training fee, P400,000 for store opening and
preparation charge, and P600,000 investment in store opening, whereas in type C agreement the
store belongs to the Headquarters and operated by the business owner who has to deposit
P1,000,000 – P200,000 of training fee, P200,000 for store opening and preparation, and
P600,000 investment in store opening (Abdurakhmonov & Maksumov, 2018).
Regarding loyalty, 7-Eleven has taken the lead, with significantly higher membership numbers
than its competitors in 2019. The company's outstanding performance in loyalty programs earned
it prestigious awards, including the Convenience Store News Technology Leader of the Year,
Loyalty360 Technology and Trends Platinum Award, and the International Business Gold Stevie
Award for Integrated Mobile Experience (Caporaso & Commerce, 2020).
III. Market Presence
This section explores the remarkable growth and presence of 7-Eleven stores worldwide,
highlighting the key factors contributing to its widespread success and unwavering popularity
among customers worldwide. As of 2023, the global presence of 7-Eleven stores stands at an
impressive 83,485, representing a notable increase of 5,072 stores compared to the 2022 data of
78,413 outlets. Among the countries hosting these stores, Japan leads the way with an impressive
count of 21,350, followed by Thailand with 14,265, and South Korea with 13,838 stores for 2023
(Similar Web, 2023).
Strategies for Market Entry and Expansion:
Franchising: 7-Eleven's franchise model allows local entrepreneurs to own and operate
individual locations, allowing for quick development into new regions. The brand's reputation
and assistance help franchisees.
Localized Offerings: To create familiarity and relevance in each location, the corporation tailors
its range to meet local tastes.
Strategic Partnerships: Working with local investors and businesses helps 7-Eleven manage
legislation and understand customer behavior, allowing for a seamless market entrance.
Comparative analysis of strengths and weaknesses (SWOT)
This section provides a SWOT analysis of 7-Eleven, exploring its strengths, weaknesses,
opportunities, and threats in the highly competitive convenience store market.
Strengths:7-Eleven possesses several key strengths: It enjoys solid global brand recognition,
solidifying its position as one of the most renowned convenience store chains worldwide. Its
franchise system empowers local entrepreneurs to own outlets, facilitating rapid business
expansion. The core concept of convenience is deeply embedded in 7-Eleven, providing
customers easy access to a diverse range of products. The company's extensive geographical
presence further enhances customer accessibility. 7-Eleven's effective marketing strategies
ensure significant brand visibility and familiarity among customers.
Weaknesses: Despite its widespread presence and popularity, 7-Eleven, like any other business,
is not without its shortcomings and weaknesses. The products sold in 7-Eleven outlets are
relatively costly compared to supermarkets, primarily due to high-profit margins. The business
faces challenges with high employee turnover rates, mainly because of shift work, which may
discourage some employees from staying long-term. The store's limited assortment of products
restricts customer choices and brand preferences, making it less attractive to shoppers seeking a
diverse range of products.
Opportunities: 7-Eleven has several opportunities to capitalize on. Firstly, expanding the
selection of fresh food can attract customers looking for quick meal options. Secondly,
implementing discounts and freebies through business partnerships can strengthen customer
loyalty. Lastly, the advantage of 24/7 convenience sets 7-Eleven apart, providing an opportunity
to serve late-night customers when few other stores are open.
Threats: 7-Eleven encounters various threats that demand attention. Firstly, intense competition
from numerous convenience stores and small-box retailers, like KK Mart. Secondly, quick-
service restaurants (QSR) such as McDonald's offer alternative quick meal options, potentially
diverting customers. Thirdly, concerns about potentially less fresh food in 7-Eleven may affect
margins and customer preferences. Lastly, the limited availability of fresh food suppliers
presents a threat to maintaining diverse and fresh product offerings.
IV. Financial Performance
As of the latest financial reports, 7-Eleven's revenue for the trailing twelve months (TTM) is
$86.83 billion. In 2022 the company's revenue increased to $87.60 billion from $69.15 billion in
2021. Revenue represents the total income generated from selling goods or services without
subtracting expenses.
Regarding earnings, the company's current earnings (TTM) stand at $2.69 billion. In 2022, 7-
Eleven's earnings increased to $2.94 billion from $2.81 billion in 2021. The earnings mentioned
here refer to the company's Pretax Income. As for total assets, 7-Eleven reported $77.40 billion
in the latest financial reports. In 2022, the company's total assets amounted to $75.60 billion; in
2021, it was $65.22 billion. Regarding total debt, 7-Eleven's latest financial reports indicate a
total debt of $28.84 billion. In 2022, the total debt increased to $25.07 billion from $16.53 billion
in 2021. The net assets of 7-Eleven amounted to $26.76 billion, per the latest financial reports. In
2022, the net assets were $26.58 billion; in 2021, they were $25.60 billion. Finally, the current
EPS (TTM) for 7-Eleven is $2.06 B, higher than the EPS of $1.51, in 2022 and $1.91 B in 2021.
These figures illustrate the financial performance of 7-Eleven, showcasing revenue, earnings,
total assets, total debt, net assets, and EPS over the three years from 2021 to 2023.
PESTLE Analysis is a strategic tool to assess the external factors that can impact a business or
organization. While its primary usage revolves around marketing and branding, its scope extends
to encompass the elements influencing human resource management. Let us analyze the
PESTLE factors for 7-Eleven:
Political Factors: Political factors encompass the intricacies of government policies and
regulations that exert their influence on the retail and convenience store operations of 7-Eleven.
These emanate from the corridors of power and encompass the degree of their sway over an
organization or business. From an HR perspective, examples include shifts in tax regulations or
employment laws and the inception of new rules that mandates 7-eleven to comply.
Economic Factors: The economic factors affecting 7-Eleven encompass the prevailing
economic conditions and trends in the markets it serves, such as GDP growth, inflation rates, and
unemployment rates. These may include the cost of raw materials or the logistics of cross-border
trade. In regard to human resources, staffing emerges as a conspicuous example.
Social Factors: Social factors encompass various aspects that influence 7-Eleven's operations.
These include demographic trends, such as population growth, age distribution, and urbanization,
which significantly shape consumer demand. Moreover, consumer preferences and cultural
factors are vital in determining product choices and store offerings. Additionally, health and
lifestyle trends are essential factors influencing the demand for specific products within the
market.
Technological Factors: Technological factors encompass the impact of technological
advancements on various aspects of 7-Eleven's operations. This includes store operations,
inventory management, and customer experience as new technologies are integrated.
Digitalization and e-commerce trends significantly influence convenience store sales with the
rise of online shopping. Additionally, the implementation of mobile apps and online ordering
systems contributes to enhancing customer convenience and satisfaction.
Legal Factors: The legal aspect involves adhering to local and international laws and
regulations governing retail operations. This includes compliance with employment laws
affecting labor practices and adhering to regulations related to intellectual property protection
and anti-monopoly guidelines. On the other hand, the environmental factor involves ensuring
compliance with environmental regulations and adopting sustainability practices in the countries
where 7-Eleven operates. The company must also consider consumer awareness of
environmental issues, leading to increased demand for eco-friendly products. Implementing
energy efficiency and waste management practices in-store operations is crucial to address
environmental concerns effectively.
Environmental Factors: 7-Eleven considers environmental factors that influence its business.
These pertain to 7-Eleven's influence on the environment and its ecological footprint, both
locally and on a global scale. 7-Eleven is placing sustainability and Corporate Social
Responsibility (CSR) at the forefront. Furthermore, there is mounting evidence that employees
prioritize these aspects highly as well. Individuals desire to work for socially responsible
organizations, and HR must effectively convey the evidence of robust social and environmental
values to the company's workforce and prospective candidates who contemplate joining the
organization.

V. Operational Efficiency
Supply Chain Management
7-Eleven's supply chain management is highly sophisticated, relying on advanced technologies
and data analytics to accurately forecast product demand. The company optimizes inventory
levels by analyzing historical sales data and customer behavior, ensuring products are readily
available in stores. Real-time data monitoring allows swift identification of fast-selling items,
enabling quick restocking and avoiding stockouts.
The company prioritizes strong supplier relationships, collaborating closely to negotiate
favorable terms and maintain quality control. This ensures a steady supply of high-quality
products to meet customer needs. 7-Eleven's efficient distribution network also strategically
located distribution centers and warehouses to minimize transportation costs and delivery times.
Advanced routing and logistics systems optimize product delivery to each store, reducing waste
and enhancing replenishment processes.
By focusing on advanced technology, data-driven forecasting, supplier partnerships, and an
efficient distribution network, 7-Eleven maintains a responsive and agile supply chain. This
ensures well-stocked stores with fresh products, meeting customer preferences and reinforcing its
position as a leading global convenience store brand.
VI. Corporate Social Responsibility (CSR)
7-Eleven partners with Conservation International (CI), a nonprofit organization dedicated to
promoting a healthier, more prosperous, and more productive planet through scientific research,
policy initiatives, and partnerships, to set measurable CSR goals, focusing on people, products,
and the planet. The company aims to reduce its carbon footprint and enhance community
engagement in the United States and Canada by targeting energy, packaging, and philanthropy.
7-Eleven's specific goals are to:
 Reduce its energy footprint in stores and offices by 20 percent by 2025;
 Reduce its packaging footprint by 20 percent by 2025; and
 Increase corporate giving to 1 percent of operating net income annually, beginning in
2017.
The Philippine Seven Corporation (PSC) has the PhilSeven Foundation, Inc. (PFI) as the
corporate social responsibility arm in the Philippines. PSC established PhilSeven Foundation,
Inc. (PFI) to support its corporate social responsibility programs. PSC can help sustain
communities in the Philippines by giving back to the community where it operates. Its current
programs include disaster and calamity relief for DSWD volunteers, 7-Eleven run, which
proceeds will be used for various programs, and Christmas Caravan, which donates goods to
various sectors such as persons with disabilities, underprivileged children, etc.
VII. Challenges and Recommendations/Suggestions
United States of America
On behalf of the National Coalition of Associations of 7-Eleven Franchisees (NCASEF), U.S. 7-
Eleven franchise owners conducted a survey in 2021 that found that 92% of 7-Eleven franchise
owners increased hourly pay rates. Nevertheless, even with this, they still face severe
understaffing despite the wage hikes. Opting for 50% of Franchise operators to often work extra
shifts to cover the shortage. The 7-Eleven franchise system is facing several significant labor
market challenges. The labor cost has risen by 27%, putting financial strain on franchisees.
Moreover, an 11% need for an available, qualified, and reliable workforce exacerbates the
situation.
Additionally, during overnight hours, there is a concerning 11% lack of customer traffic,
impacting store operations further. Compounding these issues is a slight decline in customer
count due to the emergence of newer competitive stores nearby, at 0.26%. One contributing
factor to the staffing difficulties is that only 20% of franchisees can offer competitive wages
based on the gross profit split with 7-Eleven. This split, or royalty, can sometimes exceed 59%,
limiting the resources available for higher wages. Despite efforts to pay beyond minimum wage,
97% of franchisees still need help adequately staffing their stores. To address the labor market
challenges, most (90%) franchisees are turning to 7-Eleven's recruitment tools, such as
HireRight, which are offered to assist with hiring. Nevertheless, these challenges have pushed
96% of respondents to lower their hiring standards, posing potential risks to the overall quality of
the workforce. As franchisees grapple with these labor-related difficulties, finding sustainable
solutions remains a crucial priority for the 7-Eleven franchise system (CS News, 2021).
A group of 7-Eleven franchise owners is pleading with its corporate backers to reverse a recent
order to resume 24-hour operations, saying their inability to recruit labor at current wages makes
longer hours impossible and unsafe.
Based on the interview done by NBC News (2021), A group of 7-Eleven franchise owners urges
corporations to reverse the 24-hour operation order due to a labor shortage and safety concerns.
The reason? 7-Eleven stores need help recruiting labor at current wages, making longer hours
unsafe and impractical, especially amidst the pandemic, reducing hours leading to staff cuts and
added pressure on franchise owners. The result? Due to increasing demand and lifting
restrictions, businesses nationwide find hiring front-line clerks and service personnel
challenging. Over 40% of small businesses report difficulties filling positions.
Lower-wage workers face difficulties returning to work due to family obligations and Covid-19
concerns; according to the Census Bureau, of the 10 million Americans officially considered
unemployed, over 4 million say Covid-19 concerns keep them from seeing work. There is also
competition for extended unemployment benefits. Combined unemployment benefits can equal
$600 a week, or about $16 per hour, more than many entry-level jobs pay, making recruitment
challenging. Businesses sign bonuses to attract workers (U.S. Bureau Of Labor Statistics, 2022).
Australia
Average workers at 7-Eleven Australia get paid half the $24.50 an hour rate, maybe less, and get
deportation threats if they complain. Most of these workers are students who face intimidation
and exploitation when they seek fair wages. A joint investigation into 7-Eleven stores by Four
Corners and Fairfax Media has found systemic underpaying workers and manipulating payroll
records.
What was found were doctored timesheets and rosters, store financials with possibly understated
wage bills, store reviews, and documents relating to payroll compliance from head office
suggesting issues within 7-Eleven Australia. Within days of the scandal breaking, the company
faced the crisis and conducted an independent review of wages and franchisees.
A whistleblower, a former worker of 7-Eleven Australia, and a consumer advocate revealed
harsh working conditions and corruption within 7-Eleven. With all the revelations, the head
office begins investigating franchisees' payroll compliance following media investigations
exposing business model issues, wage fraud, and franchisee relationships (Ferguson & Danckert,
2015).
One solution initiated by 7-Eleven was implementing a biometric time-recording system called
Kronos, which mandates franchise employees clock on using their thumbprints. The system uses
facial recognition to verify shift lengths and detect payroll errors. With this implemented, pay
rates and slips are now centrally managed, preventing franchisees from altering wages (Karp,
2020).
Insights and Suggestions
Recognizing that the lack of staffing is detrimental to the continued operations of 7-Eleven stores
is a prevalent problem for franchisees. Addressing the issues relating to human resources in 7-
Eleven stores requires a multi-faceted approach that combines innovative solutions and
employee-focused strategies. Here are some realistic solutions to tackle the issue.
1. Employee Development and Training: Invest in employee development and training
programs to enhance skills and boost career growth prospects within the company.
Offering opportunities for advancement and professional development can increase
employee motivation and reduce turnover.
2. Technology Integration: Leverage technology to streamline store operations and reduce
the burden on staff. Self-checkout kiosks and mobile ordering systems can minimize the
need for additional staff during peak hours, while also improving the overall customer
experience. Also to include is the integration of maybe self-checkout machines that
would rely on the customer self-checking and paying for their own commodities.
3. Collaboration with Educational Institutions: Partner with local educational institutions to
establish internship programs or job placement initiatives. There can be a lot of benefits
to this first of all to the student that will be doing their OJT, this will give them work
experience and foster engagement with the company. Engaging with schools and colleges
can help 7-Eleven identify potential talent and foster long-term relationships with future
employees.
4. Referral Incentives: Encourage current employees to refer potential candidates by
offering referral bonuses or incentives. Employees are more likely to recommend
individuals who fit the company culture and can contribute to the team.
5. Staff Retention Programs: Develop retention programs that recognize and reward
employees for their loyalty and commitment. Employee recognition, performance
bonuses, and employee appreciation events can foster a positive work environment and
boost employee morale.
6. Work-Life Balance Initiatives: Prioritize work-life balance initiatives to enhance
employee well-being and job satisfaction. Encourage managers to be supportive and
understanding of employees' personal needs and provide resources for stress management
and mental health support.

VIII. Conclusion
In conclusion, the analysis of 7-Eleven's business strategies and market presence reveals a
comprehensive picture of a global convenience store giant that has tread the path many have
tried but failed to master the art of convenience. With an extensive network of stores in 19
countries, 7-Eleven's franchise and licensing model has propelled its rapid expansion, solidifying
its position as a prominent player in the international convenience store industry.
The company's relentless focus on operational efficiency and supply chain management ensures
that 7-Eleven stores are consistently well-stocked and capable of efficiently meeting customer
demands. This operational prowess translates into a reliable and consistent shopping experience
 across its global locations, fostering customer loyalty and trust. However, it is only sometimes
smooth sailing. 7-Eleven has faced internal and external problems, most recently and
prominently their staffing and human resources deficits and fraudulent actions toward them.
As a global convenience store chain that operates 24/7, maintaining a sufficient and skilled
workforce to cover all shifts can be a demanding task. The continuous operation of stores
requires a dedicated team of employees to ensure that customers receive the service and
convenience they expect. However, in certain regions, due to the lack of incentives, promising
long-term benefits, or fraudulent wage rates, the employment turnover increases, leading to
potential strain on existing employees and impacting the overall customer experience. This
shortage has prompted the company to explore innovative solutions and implement strategies
such as promotional campaigns, improved employment benefit plans, employee training
services, and other means to attract and retain talent while also considering technology-driven
approaches to ease the burden on staff during high-demand periods.

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