Seven-Eleven Japan's Strategic Initiatives for Growth and Value Enhancement
2023-07-25
Seven-Eleven Japan recently held a meeting to discuss the Strategy Committee's role within the company and to address the Group's strategic priorities and portfolio structure. The primary objective of this meeting was to enhance the company's corporate value through various initiatives.
During the meeting, several key drivers of the business were highlighted. These included the performance of domestic operations, currency fluctuations, profitability of the fuel business, merchandise development, sales promotion, fair initiatives, merchandise exhibitions, cost effectiveness, managing cost increases, and the Four-part Vision.
The company outlined its plans for product and service expansion, which encompassed several exciting initiatives. One of these is the introduction of a modernization program for coffee at all eligible stores by fiscal year 2025. Additionally, Seven-Eleven Japan aims to expand and improve the assortment of bakery merchandise to pair with coffee. They also plan to bring 150 new items to market in fiscal year 2023 to expand their private brand lineup. Furthermore, the company is undergoing a fundamental transformation of their Superstore operations to reduce dependence on the fuel business and achieve specific financial targets by fiscal year 2025. This transformation involves generating initiatives and ideas through subcommittees and teams and integrating them into their plans. The company is closely monitoring the progress of strategic priorities, including the growth strategy for convenience store operations and the fundamental transformation of Superstore operations.
Looking ahead, the company's outlook for the quarter and year is positive. Despite a decrease in sales volume per store in the first quarter of fiscal year 2023 compared to the previous fiscal year, it still represents the second-highest level ever. The cents per gallon have shown a considerable recovery from first quarter levels, and preliminary data suggests that cents per gallon for the second quarter of fiscal year 2023 exceeds the plan and is higher than the same period in fiscal year 2022. The company expects profits in the fuel business to remain above pre-COVID-19 levels in the medium-term. Additionally, Seven-Eleven Japan has successfully contained the increase in selling, general, and administrative expenses despite rising costs resulting from inflation in the U.S. economy.
The company is making steady progress on its strategic initiatives, as evidenced by the active engagement of the Strategy Committee in discussions related to strategic priorities and the analysis and evaluation of the portfolio structure. This progress is contributing to the enhancement of Seven-Eleven Japan's corporate value.
In terms of capital spending plans, the company has outlined several key areas of focus. These include a modernization program for coffee, initiatives to improve and expand the assortment of bakery merchandise, expansion of private brands, and a fundamental transformation of Superstore operations. Additionally, Seven-Eleven Japan plans to strengthen its fresh food offerings and reduce dependence on the fuel business. More details regarding these plans will be provided in the earnings announcement for the second quarter.
Overall, Seven-Eleven Japan's recent earning call meeting shed light on the company's strategic priorities and initiatives aimed at enhancing its corporate value. With a positive outlook for the quarter and year ahead, the company is making steady progress towards its goals and remains committed to delivering value to its stakeholders.