7-Eleven shuts down all stores in Indonesia

Reading Time: 2 minutes

The franchisee of the 7-Eleven convenience store chain in Indonesia, stock exchange-listed PT Modern Internasional, is closing down all its 141 outlets in the country by June 30 due to a lack of profitability.

In a statement to the Jakarta stock exchange, the company’s director, Chandra Wijaya, said the decision was made because there were “limited resources” to support operations of the stores any longer.

7-Eleven entered Indonesia in 2008 to take on the challenge to compete with established domestic chains Alfamart and Indomaret, initially not without success. Business grew and revenues reached a peak in 2014 at around $73 million, and the chain’s network reached the highest-ever number of 187 outlets in the next year.

However, sales began to decline as the competition reacted. Alfamart made a deal with Japan’s Lawson convenience store chain while Indomaret created a convenience store sub-brand called Indomaret Point. Japanese convenience store chains FamilyMart and Ministop also signed up with local franchisees,  which all came as a huge blow for 7-Eleven.

Another problem was the ban to sell alcohol in convenience stores imposed by the Indonesian government in 2015 which caused 7-Eleven’s revenue drop by almost nine per cent in the same year and annual results turn red, while the competition could shrug off the booze ban with alternative products and services such as fresh groceries, bill payments and travel bookings.

At the end of 2016, more than 20 7-Eleven stores closed down as they were no longer profitable. Over time, the number of outlets dropped to 141. Modern Internasional tried to sell the franchise to Thailand’s CP All, which runs a whopping 9,400 7-Eleven stores in Thailand, but the deal fell through.

Meanwhile, Indonesian Trade Minister Enggartiasto Lukita denied allegations that the shutdown in 7-Eleven’s operations displayed weakness in the Indonesian retail sector, noting that many other 24-hour retail outlets were still operating as usual. He said the shutdown was due to internal problems at the 7-Eleven franchise and due to unsustainability owing to the occurred losses.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

The franchisee of the 7-Eleven convenience store chain in Indonesia, stock exchange-listed PT Modern Internasional, is closing down all its 141 outlets in the country by June 30 due to a lack of profitability. In a statement to the Jakarta stock exchange, the company's director, Chandra Wijaya, said the decision was made because there were "limited resources" to support operations of the stores any longer. 7-Eleven entered Indonesia in 2008 to take on the challenge to compete with established domestic chains Alfamart and Indomaret, initially not without success. Business grew and revenues reached a peak in 2014 at around $73 million, and...

Reading Time: 2 minutes

The franchisee of the 7-Eleven convenience store chain in Indonesia, stock exchange-listed PT Modern Internasional, is closing down all its 141 outlets in the country by June 30 due to a lack of profitability.

In a statement to the Jakarta stock exchange, the company’s director, Chandra Wijaya, said the decision was made because there were “limited resources” to support operations of the stores any longer.

7-Eleven entered Indonesia in 2008 to take on the challenge to compete with established domestic chains Alfamart and Indomaret, initially not without success. Business grew and revenues reached a peak in 2014 at around $73 million, and the chain’s network reached the highest-ever number of 187 outlets in the next year.

However, sales began to decline as the competition reacted. Alfamart made a deal with Japan’s Lawson convenience store chain while Indomaret created a convenience store sub-brand called Indomaret Point. Japanese convenience store chains FamilyMart and Ministop also signed up with local franchisees,  which all came as a huge blow for 7-Eleven.

Another problem was the ban to sell alcohol in convenience stores imposed by the Indonesian government in 2015 which caused 7-Eleven’s revenue drop by almost nine per cent in the same year and annual results turn red, while the competition could shrug off the booze ban with alternative products and services such as fresh groceries, bill payments and travel bookings.

At the end of 2016, more than 20 7-Eleven stores closed down as they were no longer profitable. Over time, the number of outlets dropped to 141. Modern Internasional tried to sell the franchise to Thailand’s CP All, which runs a whopping 9,400 7-Eleven stores in Thailand, but the deal fell through.

Meanwhile, Indonesian Trade Minister Enggartiasto Lukita denied allegations that the shutdown in 7-Eleven’s operations displayed weakness in the Indonesian retail sector, noting that many other 24-hour retail outlets were still operating as usual. He said the shutdown was due to internal problems at the 7-Eleven franchise and due to unsustainability owing to the occurred losses.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid