Why did Japanese chain 7-Eleven shut 31 stores in India despite its ‘long-term’ ambitions?
Japanese convenience store chain 7-Eleven may have failed in its second attempt to enter India's retail market through a franchise model, but it has no plans to give up on the country.
At the end of September, Reliance Retail, which operates 7-Eleven stores in India under a master franchise agreement, shut all 31 outlets across the country, a spokesperson for the Japanese company told CNBC in an email.
Despite the closures, 7-Eleven remains interested in expanding its presence in India. The company's spokesperson said it still aspires to serve Indian customers and “looks forward to exploring several options to advance our presence in the market over the long term.”
7-Eleven partnered with Reliance Retail in 2021 after its earlier agreement with another Indian company, Future Retail, came to an end.
According to CNBC, in a regulatory filing, Future Retail had said the agreement was terminated mutually because it was “not able to meet the target of opening stores and payment of franchisee fees.”
The latest store closures have raised questions about 7-Eleven's future in India. However, analysts told CNBC that the move could signal a change in its business strategy rather than a complete exit from the country.
This comes at a time when another Japanese convenience store chain, Lawson, is also preparing to enter the Indian market.
The closures do not mean that “7-Eleven is giving up on India,” Sohrab Bararia, a partner at consultancy firm Grant Thornton Bharat, told CNBC.
“It seems more like a rethink of the current franchise arrangement, particularly given the losses under the existing model,” he added.
The publication stated that 7-Eleven could consider moving away from the franchise model and directly managing its stores in India.
Lawson is reportedly planning to establish a local subsidiary and operate stores directly from 2027, Birla said. He added that 7-Eleven could consider a similar approach.
Earlier this year, several Japanese media reports said Lawson planned to open its first five stores in Mumbai in 2027, with a target of 100 stores across India by 2030.
According to these reports, Lawson plans to establish a local subsidiary in India before February 2027. The subsidiary would own and manage the stores.
Bararia said that moving away from the franchise model could give 7-Eleven greater control over its Indian operations.
A different approach could provide room for “strategic involvement” while allowing the company to adapt its products and services to local preferences and expand its presence across India.
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