By Kengo Tabe and Taihei Ishikawa / Yomiuri Shimbun Staff Writers
Seven & i Holdings Co., which unveiled a new management strategy on Aug. 6, intends to expand its convenience store business both in Japan and overseas. President and CEO Stephen Hayes Dacus elaborated on the plans during an interview with The Yomiuri Shimbun. The following is excerpted from the interview.
The Yomiuri Shimbun: Three months have passed since you became president in May. How do you view the challenges and progress so far?
Stephen Hayes Dacus: We are currently a Japanese company investing overseas. To accelerate our global expansion going forward, we must become a global company. To achieve this, people and processes are crucial. Since becoming president, I have been meeting almost every morning with Executive Chair (Junro) Ito, Chief Financial Officer (Yoshimichi) Maruyama, Chief Strategy Officer (Tamaki) Wakita and Chief Administrative Officer (Shigeki) Kimura -- five of us all together -- to discuss issues and make decisions swiftly.
I also hold weekly video conferences with the presidents of our overseas operating companies. Previously, it wasn't clear what the holding company expected. If the operating companies understand what they should do and to what extent, they could move with greater speed. We're increasing communication frequency to enable them to operate more freely.
Yomiuri: What are your expectations for future growth?
Dacus: Globally, we have 60 million customers visiting our stores daily. This is significantly more than Walmart, and we have 86,000 stores worldwide. Leveraging this scale globally will allow us to further reduce costs and enhance efficiency across value chains.
Our growth potential overseas is immense. Our market share in North America isn't particularly high, and we only have 13,000 stores (in the United States). In Japan we have 21,000 stores. Considering the size of (the United States), I believe North America has very high growth potential. Furthermore, in Europe, we are only in northern Europe, and we have zero presence in Africa. Even in Asia, there are some large countries where we haven't opened stores.
Yomiuri: Many stores in the United States are getting older. Do you have any plans for improvements?
Dacus: We must invest in renovating existing stores and expanding the number of stores with attached restaurants. Because of our long history in the United States, many stores are old. I believe we should invest. We must value the customers who come to our existing stores. We need to invest so those customers do not have an unpleasant experience when they enter the store.
Yomiuri: How do you view the convenience store business in Japan?
Dacus: Although there is talk about the shrinking population and the high number of stores in Japan, I think there is still room for growth. We want to expand our store network and strengthen our Japanese operations. I've worked in Europe, the United States and Asia, and among them, I believe Japan has the fiercest retail competition. This is because Japanese consumers are extremely demanding. Japan's food culture differs significantly from other countries, and I think its cuisine is the best in the world. That's why innovation is essential to compete in Japan.
Yomiuri: Honorary Advisor Toshifumi Suzuki (who served as chairman) always tasted products himself to try to understand the customer. What do you prioritize in product development?
Dacus: Honorary Advisor Suzuki was a retail genius who could make decisions on his own. I think Tadashi Yanai, chairman, president and CEO of Fast Retailing Co., is the same. However, it's difficult for 99% of managers to do that. Processes are necessary, and decisions need to be made by a team. That's why our product development is done by a team. Even with AI, I believe those of us who are not specialists need partners.
Yomiuri: While you are leading in daily sales, growth has slowed compared to competitors.
Dacus: From the customer's perspective, it's gotten harder to say our product quality and value are still overwhelmingly the best. If we sell better products at better prices than our competitors, we could definitely win. But staying number one all the time is dangerous. We need to return to the adventurous spirit we had at our founding.
For example, our delivery service 7NOW is successful in the United States and we will expand it in Japan. We also need to expand 7 Cafe Bakery offerings of fresh baked goods and 7 Cafe Tea offerings of tea prepared in store, and to invest in existing stores.
Yomiuri: What kinds of stores do you think Japanese customers like?
Dacus: Customer needs change every time, so we must evolve constantly. We need to change the layout and products in existing stores, and replace in-store machinery. We must also change our services. I think even if a store is ideal today, it may not be ideal tomorrow.
Yomiuri: Are there any differences or challenges in terms of consumer behavior in Japan and the United States?
Dacus: Fundamentally, it's the same. But the challenge lies in defining quality. Egg sandwiches are a good example. When Americans eat an egg sandwich from a Japanese 7-Eleven, they say, "Why isn't this available in America?" Actually, egg sandwiches are sold in the United States too, but it's at a different level. Because Japanese consumers are so demanding, that leads to the creation of high-quality products.
There's still a gap, but globally, the level of quality that consumers are demanding is rising. That's why we must continually improve product quality and value. (Convenience store chains) that are succeeding at this are winning in Europe, North America, Japan and other parts of Asia.
Yomiuri: Alimentation Couche-Tard Inc., a major Canadian convenience store operator, withdrew its acquisition proposal, but there will still be the risk of a buyout if your stock price doesn't rise. What do you need to do to protect against risks like activist shareholders and buyouts?
Dacus: My top priority is optimizing corporate value and shareholder value. If we successfully execute our new management strategy, corporate value will absolutely increase. At the same time, our capital allocation has changed significantly from before. Stock value should also rise dramatically. Over the next five years, we aim to increase EPS (earnings per share) by 140%. We also intend to raise ROIC (return on invested capital) from 4.8% at present to 12.6%. We are not afraid at all of activist shareholders or buyout proposals. Strengthening our core business is the top priority.
Yomiuri: Is the plan to list 7-Eleven Inc. in the United States by 2026 proceeding as scheduled?
Dacus: The purpose of the listing is to increase shareholder value. While it is currently under the umbrella of a Japanese company, listing it in North America will allow it to be valued at a fair price, benefiting the holding company as well. Shareholder value should also increase.
Of course, if the economic environment is extremely poor, we must consider that impact, and if the market itself is weak, there will be many things we must evaluate. Our current goal is a 2026 listing. But if we believe this timing won't yield good results, we won't proceed. We will ensure there is balance in various respects, and proceed only when the situation is optimal.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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August 28, 2025 03:04 ET (07:04 GMT)
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