NEW YORK -- Jim Keyes, president and CEO of 7-Eleven Inc., spoke at Merrill Lynch's Retailing Leaders: Household Products and Cosmetics Conference in New York on Wednesday, highlighting the company's successful transformation of its business model. "We are transforming dramatically what was a good business into what we believe can be a great business with growth opportunities, now that we've fixed the business model to be able to continue improving our traditional business while adding new segments like fresh foods or services," Keyes said.
According to Keyes, proof of success is evident in the company's operating statistics, namely that it is in its 34th quarter of improved same-store sales. The key to 7-Eleven's successful model, Keyes explained, has been to enact a centralized business strategy to leverage the company's buying power. "We decided to concentrate all of our stores in geographic areas that allow us to support our stores with a much more effective daily distribution system -- a nationwide network of commissaries, bakeries, fresh food, facilities in each market," Keyes said. "So it's a hub-and-spoke system that is dramatically different."
Another successful strategy for the company has been its 12-week training programs designed to put more decision-making tools in the hands of store operators, according to Keyes. "It's a centralized entrepreneurialism that we're trying to foster as individual stores make individual product decisions," Keyes said. "We have technology to have every item, every day, measured and tracked in eachstore. Yet our challenge remains the people?giving our folks the training and tools necessary to make better buying decisions."
In addition to its focus on same store-sales, Keyes said an equally important aspect of the business model is the company's ability to be "proactive" by implementing new products and partnering with manufacturers to extend product life cycles.... [continues]
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