Reliance Retail, 7-Eleven To End India Partnership After 5 Years, Most Of 60 Stores Likely To Shut

Reliance Retail and Japanese convenience store chain 7-Eleven have reached an end to their five-year partnership in India, with most of the approximately 60 stores under the agreement likely to shutter, according to reports. The Economic Times cited sources familiar with the situation, revealing that the decision was driven by the lack of profitability. Some outlets are reportedly clearing their existing stock prior to closing.

The anchor for this partnership was established in October 2021 when Reliance Retail inked an agreement with 7-Eleven to operate the global chain's outlets in India. The first store opened its doors in Mumbai. However, the venture has not lived up to expectations, as the partnership has not generated profits.

The demise of this collaboration coincides with India's convenience store sector grappling with heightened competition from quick-commerce platforms such as Blinkit, Zepto, and Swiggy Instamart. These services enable customers to order groceries, snacks, and other essentials for delivery within a matter of minutes, typically between 10 and 15 minutes. The convenience of same-day delivery has intensified competition for traditional convenience stores.

India's extensive network of kirana stores, or neighborhood grocery shops, also poses a significant challenge for international convenience-store chains. Global players like 7-Eleven often set themselves apart with premium ready-to-eat food, beverages, and snacks. Nevertheless, scaling this model in India's price-sensitive consumer market has proven to be a hurdle.

The 7-Eleven brand had initially planned to enter the Indian market through a partnership with Future Group in 2019. However, the deal collapsed due to Future Group's financial woes. Reliance Retail stepped in as the backup partner in 2021 to introduce and manage 7-Eleven stores in India. The reported termination of the Reliance partnership signifies another setback for 7-Eleven's expansion plans in the country.

While the existing business model has faced intense competition, 7-Eleven could still pursue another local partner if it decides to retain its presence in the Indian retail market.