7-Eleven Net-Enables In-Store Kiosks

7-Eleven, Inc. (Nasdaq: SVEV) is using a new $540 million (US$) capital injection from IYG Holding Co. to roll out kiosks in its U.S. stores that will eventually enable those outlets to act as distributors for online merchants.

7-Eleven, which is owned and operated by 7-Eleven Japan Co. Ltd., announced a deal with NCR Corp. (NYSE: NCR) to start placing its Internet kiosks in more than 200 7-Eleven stores in the Dallas/Ft. Worth, Texas area, where the U.S. division is based.

The 7-Eleven kiosks feature touch-screen Internet access to enable customers to cash checks, purchase money orders, and send and receive wire transfers via services provided by American Express. Additionally, the chain plans to expand the kiosk services to include event ticketing and online shopping.

The company plans to put the kiosks in nearly all of the 5,700 stores it now operates in the United States and Canada, as well as a number of stores that will open over the next several years.

Last-Mile Distributor

7-Eleven is looking to build on its experience as a consumer goods retailer to become a distributor for online retailers. The company’s e-commerce strategy will leverage the chain’s presence in all the major cities and many smaller ones throughout the United States, according to Vice President of Planning Rick Updyke.

“Distribution is the biggest challenge for e-commerce companies, and 7-Eleven is well positioned to leverage our existing physical locations, daily delivery infrastructure and state-of-the-art retail information system,” he said.

New Outlook

With more than 19,700 7-Eleven stores in North America and 16 other countries, the company generated worldwide sales of more than $27 billion in 1999. However, until its Japanese parent stepped in to become more active, 7-Eleven’s U.S. operations had been struggling.

Now, the company’s new Internet approach has Wall Street paying close attention. Research firm Standard & Poor’s has said that the e-commerce initiative could have a positive impact on the convenience store chain’s long-term debt.

Meanwhile, investment firm Merrill Lynch started covering 7-Eleven stock last Friday with a buy rating for the same reason.

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