Reliance Retail and Japan-based 7-Eleven are ending their five-year franchise partnership in India, with most of the nearly 60 convenience stores operated under the agreement expected to close.
The Economic Times, citing people familiar with the matter, reported that the decision was taken after the business failed to generate profits. Some outlets are clearing their existing inventory ahead of closure, according to the report.
7-Eleven could explore a partnership with another Indian company to continue operating in the country, although no decision has been taken.
Reliance Retail entered into an agreement with 7-Eleven in October 2021 to operate the global convenience-store chain's outlets in India. The partnership subsequently opened its first store in Mumbai.
Quick commerce challenges convenience stores
The reported end of the partnership comes as India's convenience-store segment faces growing competition from quick-commerce platforms.
Services such as Blinkit, Zepto and Swiggy Instamart allow consumers to order groceries, snacks and other daily essentials for delivery within 10 to 15 minutes.
The convenience of doorstep delivery has intensified competition for physical convenience stores.
India's extensive network of traditional kirana stores also presents a challenge for international convenience-store chains.
Global players such as 7-Eleven often differentiate their stores through premium ready-to-eat food, beverages and snacks. However, scaling this model in India's price-sensitive consumer market has proved challenging.
7-Eleven's India journey faces another setback
The 7-Eleven brand had initially planned to enter India through a partnership with Future Group in 2019.
That agreement fell through after Future Group encountered financial difficulties. Reliance Retail subsequently signed an agreement in 2021 to introduce and operate 7-Eleven stores in India.
The reported termination of the Reliance partnership marks another setback for 7-Eleven's expansion plans in the country.
While the existing model has struggled against intense competition, 7-Eleven could still seek another local partner if it decides to maintain its presence in the Indian retail market.
