New 7-Eleven stores in San Diego make a move to attract millennials

7-Eleven, the biggest convenience store chain in the retailing industry, is aiming to make a run at millennial customers and upscale coffee drinkers.

And a franchise store that opened Wednesday in the heart of City Heights is one of the first in the country to showcase the corporate giant’s new plan to reach a broader consumer base.

Called an “innovative store,” the 3,500-square foot location on 4350 University Ave. offers a wider range of item, such as:

• Cookies and croissants that are baked daily at the store
• A larger beverage wall that includes self-serve cappuccino and digital coffee machines that 7-Eleven executives hope will deliver a Starbucks-like feel
• Lattes and nitro-brew coffee that is infused with nitrogen to give it a rich, creamy head, similar to nitro draft beer like Guinness
• Eight flavors of tea

With an eye toward gaining some market share from gourmet coffee stores, the prices for a cup of joe at the University Avenue store are pretty attractive — as low as $1 a cup if you use the company’s 7-Eleven app, $2.09 if you don’t.

“This is something totally different than our traditional stores,” said Sakimo Randall, market manager for 7-Eleven San Diego, who ducked into the new store’s 500-square-foot backroom to talk to the Union-Tribune during a hectic opening day. “I think the newer aged customers, the millennials, will come in and see things they’re used to seeing at other retailers and understand that we offer that as well.”

7-Eleven market manager for San Diego, Sakimo Randall, shows off one of the digital self-service cappuccino and coffee machines the company is installing at new locations to attract a wider customer base.

(Photo by Rob Nikolewski)

The new stores also offer a wider selection of fresh produce than seen in traditional 7-Elevens. The City Heights location display included onions, bell peppers, avocados, garlic, as well as a selection of lemons, limes, apples and oranges.

And in a nod to the way Amazon has changed the retail landscape, the store also offers delivery service — provided that customers download the company’s 7Now app.

“The marketing strategy is to deliver what customers are looking for,” Randall said.

For hardcore 7-Eleven patrons addicted to the company’s iconic Slurpees, there’s no need to fear. The new store prominently displayed a machine dispensing the popular frozen drink while also including a variation on the theme — non-carbonated Slurpee drinks made with real fruit juice, with flavors such as blueberry lemonade and cherry limeade.

While there are other 7-Eleven “innovative stores” across the country, the City Heights location is the only franchise so far that offers all of the stores’ elements in one place.

There are bigger expansion plans on the horizon.

In December, a 10,000-square-foot 7-Eleven “lab store” — short for laboratory store — will open on 35th Street and El Cajon Boulevard that will feature a deli, a taqueria and a walk-in cellar for wine and beer purchases. The store will employ 100 workers.

One lab store has already opened in the Dallas area, home of 7-Eleven’s U.S. headquarters. The El Cajon Boulevard lab store will be the company’s second. Three others across the country are on the drawing board.

Keith R. Miller, a franchisee consultant with a national focus, said 7-Eleven’s strategy may face an uphill battle.

“I think it’s a difficult one, to try to nudge into Starbucks’ territory ,” said Miller, the principal at Franchisee Advocacy Consulting, based in Northern California. Miller said customers may have difficulty thinking a convenience store is the place to buy gourmet-quality coffee, produce or croissants.

“And when you create this completely different 7-Eleven image (with new stores), what does that do to the 7-Elevens around you? Are (customers) now disappointed when they go into those other 7-Elevens?”

That’s what perturbs Jaspreet Dhillon, a 7-Eleven franchisee in the San Fernando Valley and a vice-president of a local association representing 7-Eleven franchisees. He said franchisees have to operate with older equipment that drives up their maintenance costs.

“I love that they are building a nice store” in City Heights, Dhillon said. “They’re building what I call concept stores and opening a few select stores that raise the expectation of the customers of what a 7-Eleven should look like. Yet when (customers) go to their neighborhood 7-Eleven stores, it doesn’t resemble that at all.”

Tracing its history back to 1927, 7-Eleven boasts more than 68,000 stores in 17 countries.