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PATTAYA, Thailand - Dallas-based 7 Eleven Inc, the world's biggest convenience store chain, on Thursday said it would mimic its Asian franchisees by opening smaller stores in North America to cut investment costs, Reuters reports.
7-Eleven has been closing unprofitable stores in North America, and CEO James Keyes said that within two years, small, 1,000-square-foot stores would account for around half of 7-Eleven's North American operations, against 10 percent now. Smaller stores needed around a third of the investment of the bigger stores, he noted.
"In the U.S. we've got a typical 'bigger is better' attitude, and in retail that can sometimes be costly," Keyes said.
The company has said it plans to add around 2,000 stores to its 17,500 Asian franchises next year, mostly in Japan, Korea and Thailand.
Keyes said the Asian model of closely clustered small stores was more profitable than the firm's 3,000-square-foot gasoline dispensing stores in the United States.
"Success of the chain in Asia has far exceeded success of the chain in the United States. In Thailand, they're building stores in a concentrated mass to be able to support network distribution systems to give them daily delivery of fresh foods," he said.
Keyes said expansion in Asia was easier than in North America because Asia had a strong tradition of small shopkeepers, many of whom were eager to be part of 7-Eleven's franchise.
7-Eleven is concentrating on breaking into China. Its Taiwanese and Japanese franchise operators are searching for a Chinese partner to open stores in Beijing.