7-Eleven Inc.'s fresh food service pilots in the Dallas area are poised to
expand, according the company's Japanese parent Seven & i Holdings Co. Ltd.

"We continued trials and established a successful model in the Dallas area,"
Seven & i said in a presentation of fiscal third-quarter results, adding that
it aims to "expand the area for these initiatives in the next period."

The company said U.S. customers especially want "high-quality" grab-and-go
food, and it has expanded offerings in the grab-and-go case. Its growing menu
includes sliders, kolaches and breakfast sandwiches. 7-Elevens also are serving
hot entrees.

In the Dallas pilots, "fresh meals" was the best-selling category, more than
doubling sales year over year. The "hot food" category saw a 21.5% increase
from the baseline, while bakery (8.6%) and fresh sandwiches (7.7%) saw healthy
single-digit improvements.

The Dallas-area initiatives tap Warabeya as a food supplier. "Categories tied
to Warabeya serve as the driving force, trending with a higher-than-average
growth rate across the U.S.," Seven & i said.

Overall, in the U.S. 7-Eleven posted an 11% increase in operating income during
its fiscal third quarter, rising to $835 million from $752 million year over
year, according to its parent.

Higher same-store sales, gross profit margin and gasoline profits drove the
increase, the company said. Same-store merchandise sales rose 2.9%, merchandise
gross profit margin increased 0.7% and gasoline margins rose year-over-year by
1.92cts/gal, Seven & i said.

Behind the higher merchandise sales were fresh food, private-label "7-Select"
and both alcoholic and non-alcoholic beverages, the company said. Fresh food
and private-label products also contributed to higher profit margins, as did
the 7Rewards loyalty program (+0.1%) and the acquisition of 1,100 Sunoco stores
(+0.2%).

Seven & i said that gasoline gross profit grew stably due to a "favorable"
cents per gallon increase, which offset a decline in the actual gallons sold.
The company said gasoline's gross profit in fiscal Q3 exceeded the prior year's
record as well as corporate projections.

--Donna Harris, dharris@opisnet.com




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