In the first quarter of the new fiscal year, consumer spending at 7-Eleven stores and petrol stations has declined due to ongoing financial pressures, as indicated by the company’s recent financial statements.
Despite this, 7-Eleven, Australia’s leading convenience store chain, reported a significant increase in pre-tax profits for the 12-month period ending June 30, rising from $36.6 million to $85.1 million. This growth occurred in all product categories except cigarettes. The company’s latest financial report was filed with the Australian Securities and Investments Commission amid its ongoing sale process.
The Withers and Barlow families, who control 7-Eleven, engaged Azure Capital and Ashurst for the sale, with potential interest from Seven & I Holdings, the global owner of the 7-Eleven brand. During the three-month period ending in June, in-store sales of items like snacks and drinks were affected by the increased cost of living, but overall revenue for the 7-Eleven network rose by 5.5% to $5.32 billion year-on-year.
The accounts highlighted that rising living costs and economic challenges impact merchandise performance, leading to decreased volume and transactions. The total market for petrol and convenience stores contracted by 4.4%. As of June 30, 7-Eleven operated 508 franchised stores, a decrease from the previous year, and franchisee fees dropped to $9.4 million.
The final quarter of the last fiscal year saw a reduction in consumer spending due to inflation and rising interest rates. The company refurbished 76 stores, closed 14, and opened 41 new stores, including 16 Micro Markets, expanding its network to 752 stores. Fuel sales volumes increased in Victoria, Queensland, and NSW but declined in Western Australia.
Despite challenges like inflation, interest rates, and labour market pressures, 7-Eleven’s strong financial position is expected to help it navigate these difficult economic conditions. A new fuel supply agreement improved working capital and cash flow, enabling the company to repay a $60 million debt and return $8.4 million to shareholders.
For the latest retailer news and information, check out the ServoPro website or to speak to us about how we can help your business contact us.