Dive Brief:
- 7-Eleven Inc. added bagged chocolates to its extensive list of private label goods last week, according to a post on LinkedIn by Nikki Boyers, the convenience retailer’s vice president of private brands and emerging brands.
- The chocolates come in three flavors: dark chocolate sea salt caramel thins; milk chocolate cookie and caramel clusters; and milk chocolate sea salt caramel thins. They’re the latest in the retailer’s 7-Select candy line, which already includes gummy candies.
- 7-Eleven’s private label and proprietary food and beverage offerings have become a central focus for the company, which aims to make these areas account for over a third of its sales by 2025, according to a March business update from parent company Seven & i.
Dive Insight:
During Q1 of this year, 7-Eleven’s private label and proprietary food and beverage categories accounted for a 20 basis point year-over-year increase in same-store sales, according to the company’s first-quarter earnings call.
The retailer said during this time it planned add around 150 new items to its private label lineup in 2023. In addition to the chocolates it just rolled out, other targeted categories include oat milk smoothies, sparkling water and tortilla chips.
The chocolates are made in the U.S. using high-quality ingredients, including fresh cream and pure vanilla. They’re sold in 5.5-ounce bags.
7-Eleven has focused on private label as a way to increase gross profit margins and address a sales slowdown as consumer confidence in economic conditions remains below pre-pandemic levels.
“Private brand merchandise boasts gross profit margins approximately 20% higher than their national brand counterparts and furthermore match the needs of U.S. consumers, who tend to be more price-conscious,” Seven & i noted in its first-quarter earnings presentation.
The company already surpassed $1 billion in annual private label sales in 2020, according to a post on X, formerly Twitter, from CEO Joe DePinto.
It’s an area with plenty of potential for convenience retailers.
“Private label historically has been underindexed in c-stores,” said Scott Love, senior vice president of retail client solutions at Circana, in an earlier interview.
Late last year, private label goods made up about 6% of the items on shelves at convenience stores, though they represented nearly 9% of sales, according to a November study from IRI, which is now a part of Circana.
7-Eleven isn’t the only c-store retailer seeing success with private label. Casey’s General Stores revealed in its Q4 earnings call that it experienced an 80% jump in sales of private label chips during the quarter. It also said it saw “a lot of good success” with its bottled water.
Irving, Texas-based 7-Eleven operates, franchises and/or licenses more than 13,000 convenience stores in the U.S. and Canada.
