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Published On: Fri, Jun 30th, 2017

7-Eleven closed all stores in Indonesia

nsnbc : All 136 7-Eleven stores in Indonesia were closed following a failed attempt by its local operator, Modern Internasional, to sale the business to the Thai conglomerate Charoen Pokphand.

7-Eleven Indonesia_Jun 2017The 7-Eleven brand of convenience stores entered the Indonesian market in 2009 but was unable to overcome competition from two local chains with a longer history from street food stalls, and due to popular support for local businesses against the 7-Eleven brand that requires costly and sustained marketing to overcome local aversions against the perceived “globalist bully”.

Modern Internasional reached an agreement earlier this year to sell the 24-hour stores to the Thai conglomerate Charoen Pokphand, which owns an affiliate running the world’s second-largest 7-Eleven network, in Thailand. The Thai model might have been more sustainable because it operates, especially in rural areas, more in conjunction with small, already established local stores instead of a model based on trying to overpower and displace local businesses.

However, the deal became unstuck in early June, leaving Modern Internasional no choice but to shut down its 7-Eleven operations, with the final more than 100 stores ceasing business Friday. Local minimarkets Alfamart and Indomaret, who sold more groceries and fewer drinks, expanded and imitated 7-Eleven, with the former tying up with Japan’s Lawson chain.

A national ban on the sale of alcohol by convenience stores issued in 2015 contributed to the demise of 7-Eleven in Indonesia, even though the ban was later relaxed to allow local governments to decide on its implementation. Modern Internasional reportedly began closing down convenience stores last year as its own sales and revenues slipped further. Competitors also cut down their expansion plans, opening fewer convenience stores than originally announced, or giving up on the business altogether.

F/AK – nsnbc 30.06.2017

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