ELI GREENBLAT

• MAY 10, 2020

The Australian

ANGUS MCKAY IS KEEN FOR 7-ELEVEN TO BE ALL THINGS TO ALL PEOPLE, WITH THAT CORPORATE AND RETAIL ETHOS PROBABLY MOST APT TO DESCRIBING THE OFTEN WILDLY SWINGING CRAVINGS OF TRADIES THAT CAN START WITH BOTTLES OF WATER ON A MONDAY AND END WITH CANS OF COKE BY FRIDAY.

“WE BELIEVE CUSTOMERS WANT CHOICE, AND THEY LIKE MAKING THEIR OWN CHOICES. AND I CAN PROMISE YOU THAT A TRADIE ON A MONDAY MIGHT SAY TO THEMSELVES THEY WANT A BOTTLE OF WATER AND A MEAT PIE AND BY FRIDAY IT MIGHT BE A CAN OF COKE AND A MEAT PIE,’’ MR MCKAY TOLD THE AUSTRALIAN.

“SO YOU ARE GOING TO SEE EVERYTHING FROM REALLY HEALTHY, SOME OF THE BEST FRESH FOOD AVAILABLE IN THE COUNTRY ON OUR SHELVES, ALL THE WAY THROUGH TO THE NICEST SWEETEST INDULGENCES THAT YOU CAN FIND.’’

AND FROM LAST WEEK, A PORTION OF THAT FOOD AND OTHER MERCHANDISE HAS BEEN PACKED AND DELIVERED TO HUNDREDS OF ITS PORTFOLIO OF MORE THAN 700 NATIONAL STORES BY ITS NEW IN-HOUSE SUPPLY CHAIN, FOLLOWING A DECISION LAST YEAR TO WALK AWAY FROM ITS $800M SUPPLY DEAL WITH WHOLESALER METCASH.

THE NEW SUPPLY CHAIN FOR 7-ELEVEN OFFICIALLY WENT LIVE IN ITS FIRST PHASE WITH STORES IN VICTORIA, NSW AND QUEENSLAND RECEIVING THEIR FIRST DAILY ORDERS — NAMELY AMBIENT FOOD AND DRINKS.

THE NATION’S BIGGEST CONVENIENCE STORE RETAILER WILL THEN EXPAND THE CATEGORIES IN A PHASED APPROACH OVER THE MONTHS AHEAD, AND IS AIMING TO HAVE SNACK FOOD, CONFECTIONERY AND GROCERY CAT­EGORIES AVAILABLE FOR STORES TO ORDER BY AUGUST.

MR MCKAY ARGUES THE SUPPLY CHAIN TRANSFORMATION WILL BE A MAJOR BENEFIT FOR ITS FRANCHISEES AS THEY WILL RECEIVE ONE DELIVERY PER DAY, RATHER THAN SOMETIMES ONCE A WEEK, CREATING HUGE BENEFITS FOR STORE OWNERS THROUGH ENHANCED INVENTORY CONTROL AND AN IMPROVED CASH-FLOW POSITION.

“IT WASN’T A RASH DECISION (TO LEAVE METCASH),” HE SAID. “WE HAVE BEEN WORKING ON THIS PROJECT NOW FOR THREE YEARS SO IT HAS BEEN A BIG STRATEGIC THRUST FOR US. I SUPPOSE CUTTING TO THE CHASE, METCASH HAS BEEN A GOOD SUPPLIER FOR A LONG TIME BUT WE HAVE WELL AND TRULY OUTGROWN THEM. WITH 709 STORES, WE ARE TOO BIG TO HAVE A THIRD-PARTY SUPPLY CHAIN.

“BECAUSE WE FIGHT FOR EVERYONE ELSE TO SECURE PRODUCT, SO VERY ­FUNDAMENTALLY IT ENABLES US NOW TO FULFIL THE GROWTH THAT WE HAVE ­ALREADY BEEN PUBLIC (ABOUT) WHERE WE ARE GOING TO. AND IT CHANGES OR BUILDS UPON A FLEXIBILITY WE ALREADY HAVE, SO EVERY STORE TODAY GETS A DAILY FRESH ORDER.

“SO ANY SANDWICH THAT YOU BUY IN OUR STORE HAS BEEN DELIVERED LITERALLY HOURS BEFORE YOU ARE BUYING IT, AND THAT STORE GETS ONE DELIVERY EVERY DAY OF FRESH PRODUCT.”

MR MCKAY, WHO WAS BROUGHT ON BOARD AS CHIEF EXECUTIVE FOUR YEARS AGO AFTER THE RETAILER HAD BEEN REVEALED TO BE UNDERPAYING ITS STAFF IN A WAGES AND EXPLOITATION SCANDAL, ADMITS THAT WHEN HE WAS GROWING UP YOU WOULDN’T TOUCH A SANDWICH SOLD IN A PETROL STATION. BUT THAT HAS NOW CHANGED AS THE CUSTOMER HAS REDEFINED THE MEANING OF CONVENIENCE, AND CORNER STORES SUCH AS 7-ELEVEN GROW THEIR REPUTATION FOR SELLING QUALITY FRESH FOOD.

MR MCKAY SAID IN THE CURRENT CORONAVIRUS PANDEMIC, 7-ELEVEN WAS WITNESSING SOME SOLID GROWTH IN SUBURBAN STORES, ALTHOUGH MANY OF ITS CBD LOCATIONS WERE STRUGGLING GIVEN OFFICE WORKERS WERE STAYING AT HOME.

7-ELEVEN IS THE LARGEST CONVENIENCE AND INDEPENDENT PETROL RETAILER IN AUSTRALIA, WITH ABOUT 38 PER CENT AND 10 PER CENT OF MARKET SHARE RESPECTIVELY ACROSS THE EASTERN SEABOARD.

IT’S HAD MIXED FORTUNES IN THE HEALTH CRISIS. “OVERALL WE ARE GOING WELL,” MR MCKAY SAID. “FUEL HAS BEEN HIT AS WE HAVE GOT FEWER PEOPLE ON THE ROADS (BUT) OUR FUEL BUSINESS IS STILL TICKING ALONG NICELY.

“WE HAVE SOME STORES THAT ARE PERFORMING BRILLIANTLY BECAUSE EVEN THOUGH SOME PEOPLE ARE WORKING FROM HOME, THEY ARE STILL USING OUR STORES AS A PLACE TO GET ESSENTIALS AND LUNCH. THEN WE HAVE OTHER STORES LIKE A CBD STORE THAT IS REALLY BEING HIT.’’

AND IT COULD BE ITS HISTORIC PRESENCE DEEP IN THE SUBURBS THAT PROVES A WINNER AS LIFE CHANGES AFTER THE CORONAVIRUS CRISIS HAS PASSED. “I THINK OUR CBD STORES WILL COME BACK AS PEOPLE COME BACK TO THEIR OFFICES,” MR MCKAY SAID. “BUT WE ARE ALREADY SEEING THAT NEED FOR CONVENIENCE DOWN THE ROAD. WE ARE SEEING IT HEIGHTENED. PEOPLE DON’T WANT TO TRAVEL GREAT DEALS OF MILEAGE. IN SOME PLACES THEY AREN’T ALLOWED TO, OR THEY JUST DON’T WANT TO.

“WE ANTICIPATE THAT ONE OF THE CONSEQUENCES OF COVID-19 IS THERE WILL BE MORE PEOPLE WORKING FROM HOME BECAUSE IT IS NOW PROVEN VERY POSSIBLE FOR THEM TO DO SO. AND WE NEED TO MAKE SURE OUR STORES CATER TO THEM. THAT’S WHY THE SUPPLY CHAIN IS SO IMPORTANT.’’