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7-11 vs. gas stations
I try to avoid shopping anywhere but Whole Foods, Wegmans, Shoppers FoodWarehouse, and ethnic groceries. But several times lately I've stopped at food marts at gas stations. Each time I've noticed how much better they are than the average 7-11, most of all for selection. There are plenty of such marts, so I'm wondering why I should ever go to a 7-11 again.
Are the prices at the gas station food marts so much higher? Are my data points too few? Or is the rest of the world discovering this same truth?
Posted by Tyler Cowen on March 31, 2007 at 07:08 AM in Food and Drink | Permalink
Comments
No Trader Joe's fan?
Posted by: TJ fan at Mar 31, 2007 4:42:13 AM
I don't know what the laws are where Tyler lives, but as a Trader Joe's shopper from Chicago who went to college (recently) in Minneapolis, I can report loathsome Minnesota blue laws which prohibit the sale of alcoholic beverages (except for beer below 3.2% alcohol) in grocery stores. This, by extension prohibits the existence of Trader Joe's in the market as well as competition in retail liquor provision. Something similar in Virginia (it is Virginia, right?) could explain Tyler's not shopping at Trader Joe's.
BTW, I have noticed a related phenomenon in the suburban Chicago area with gas station mini-marts. It strikes me that, in the last few years that the size of retail spaces at gas stations seems to have increased, along with the selection of products. As for the 7-11 side of the observation, there don't seem to be many anymore. Although I recall seeing them around, can't think of where to find one now.
Posted by: stefista at Mar 31, 2007 7:11:14 AM
Interesting. I'm sitting here pondering it, and the only reason I can ever remember wanting to specifically go to 7-11 (rather than a generic convenience store, now attached to ever other gas station) is because I wanted a Slurpee. Nothing else makes 7-11 stand out in my mind.
Posted by: Sol at Mar 31, 2007 7:33:47 AM
Whole Foods is like Trader Joe's, but for people who like to spend publicly and loudly ;-)
Posted by: odograph at Mar 31, 2007 8:11:59 AM
The average 7-11 is owned by a franchisee, whose franchise contract with 7-11 requires him to send 50 cents of every gross revenue dollar to 7-11 Inc. Your typical franchisee operating another chain brand (am/pm, etc.) generally gets to keep a much greater share of what he earns. Whether this explains his ability to offer lower prices than 7-11 and still make a decent living I don't know, but it might. Being owned and run from Japan, 7-11 tends to take a very different approach on many things than anyone else in the industry.
Posted by: anonymous at Mar 31, 2007 8:45:54 AM
Here in Arizona we don't have many 7-11s. Our primary convenience store retailers are Circle-K (something strange is afoot at the Circle-K) and QT. Both of these come with gas pumps.
Posted by: Sameer Parekh at Mar 31, 2007 9:40:24 AM
Trader Joe's in Philadelphia also cannot sell alcohol but does a quite brisk business. The selection is generally smaller and slightly less up-scale than wholefoods and the running of the store is much worse- dairy products often almost expired, big gaps on the shelves due to bad ordering and stocking, etc. Not so much of this at wholefoods, but higher prices, too.
Posted by: Matt at Mar 31, 2007 9:56:46 AM
Wow, someone needs to set the Philadelphia TJ's straight. I've never seen anything like that, but my local store (Costa Mesa) is 50 miles from the original (Pasadena). We actually had a Whole Foods fold here, IMO they were too close to our TJ's.
Posted by: odograph at Mar 31, 2007 10:07:49 AM
"I try to avoid shopping anywhere but Whole Foods, Wegmans, Shoppers FoodWarehouse, and ethnic groceries."
-Elitist signaling at its finest. Well, at least he's not a _credit_ snob.
Posted by: foodsnob at Mar 31, 2007 10:19:13 AM
Traders Joe's in Massachusetts can not sell alcohol and does well without it.
Posted by: spencer at Mar 31, 2007 10:49:06 AM
I shop at 7-11 a couple of times a week for nothing fancy: 1-quart bottled milk, a 6-pack, an ice-cream, the Citi-bank ATM machine. Not to mention, I also get to free-ride some trashy magazines in the middle of a night. I would have gone to a Food Mart or a Wawa if there is one in walking distance. The bottom line is that a convenient store competes more on convenience than on the quality of its offerings.
Posted by: Yan Li at Mar 31, 2007 10:50:22 AM
I read an article in the Chicago Tribune a few months ago that discussed the economics of operating a gas station. It turns out that most gas stations only have a profit margin of a few cents per gallon of gas. They rely on the mini marts, lottery, etc. to make a profit. This probably explains part of their wide selection. As to the price difference between them and 7/11? Couldn't tell you. Trying to establish themselves as an alternative to grocery stores when you only need a few things?
Posted by: Dave in the Corn at Mar 31, 2007 11:17:06 AM
"Traders Joe's in Massachusetts can not sell alcohol and does well without it."
This is incorrect. Grocery store chains in Mass can only sell alcohol at a maximum of 3 locations. Thus, most TJs in Mass don't sell alchohol, but the one on Magazine St in Cambridge does (including 3 Buck Chuck).
Posted by: Sam TH at Mar 31, 2007 11:17:17 AM
I think it's safe to say that over the last 10 years, if not earlier, the quality of the merchandise at convenience stores has risen substantially. It is now possible to get pastries (bakery quality, not talking Little Debbie) alongside your donuts, wine alongside beer, a wider selection of grocery stores items, better quality coffee, etc. I only ever stop at them if I'm traveling and in a hurry, but I might postulate that increased competition and consolidation of the industry are responsible for the changes, especially the latter.
As far as groceries stores go, if you're ever down in the Richmond area may I suggest a stop at Ukrops. The closest one to you is probably the Fredericksburg store.
Posted by: Shaun M at Mar 31, 2007 11:39:03 AM
Actually they have sandwiches at the 7-Elevens around here (I am not sure if they have them at all 7-Elevens as I never went to a 7-Eleven before I moved here, except maybe on a road trip) that are made locally and daily and are not bad and are very cheap. So, if the local food mart / gas station doesn't have the same, that would be one reason.
I'm not saying they are some delicacy or that I might not prefer a Whole Foods salad bar instead, but for a light cheap lunch, you could do a lot worse.
Posted by: liberty at Mar 31, 2007 11:39:28 AM
The Trader Joe's in Brookline MA (Coolridge Corner?) also sells alcohol.
Posted by: Matt at Mar 31, 2007 11:49:40 AM
Being owned and run from Japan, 7-11 tends to take a very different approach on many things than anyone else in the industry.
I can't give too much credence to this. 7-11s in the US are very different from 7-11s in Japan, and I can't say that I've noticed any change in the US franchises since the Japanese franchise holder bought out the company.
Posted by: John Thacker at Mar 31, 2007 12:11:29 PM
I try to avoid shopping anywhere but Whole Foods, Wegmans, Shoppers FoodWarehouse, and ethnic groceries.
Never go to the Trader Joe's in Fairfax that's near China Star and Blue Ocean? Hmm.
Yeah, Shoppers is pretty useful because, even though quite like a traditional grocery store and not upscale at all, they sell a tremendous amount of things that Wegmans and the other upscale stores don't-- particularly cuts of meat outside of your boring ones. When I need some fatback, or giblets, or anything outside of boring muscle meat, I have to go there. Wegmans has a wide variety of types of meat, but not variety in the cuts. (It's telling that their chicken is mostly own-brand, but the gizzards and livers are Tysons.)
My cheap complaint with Wegmans (and Whole Foods of course) is the unavailability of made-in-Richmond Duke's mayonnaise. Their entire product line is (understandably) tilted towards upstate New York and other Northeastern items, and they do a bad job selling Southern regional foods.
Posted by: John Thacker at Mar 31, 2007 12:18:02 PM
I live near GMU and am curious as to why Tyler doesn't shop at the Trader Joe's around here. They DO sell alcohol.
Posted by: eriks at Mar 31, 2007 1:48:54 PM
Ones without gas are generally older and smaller. It is a change in the market over time.
Posted by: Lord at Mar 31, 2007 1:50:38 PM
The average 7-11 is owned by a franchisee, whose franchise contract with 7-11 requires him to send 50 cents of every gross revenue dollar to 7-11 Inc
50% of gross revenue? No effing way that's true.
Posted by: Bob Dobalina at Mar 31, 2007 3:13:59 PM
@ Bob Dobalina
Actually, 50% might be accurate.
Read this page The 7-11 System and you will see why.
"7-Eleven provides many services some franchisors either do not provide or, if available, require additional fees. For example:
We obtain and bear the ongoing cost of the land, building and store equipment
We pay water, sewer, gas and electric utilities
We pay for any building rent and property taxes
We provide financing for all normal store operating expenses
We provide record keeping, bill paying and payroll services for store operations
We provide a support structure and a field consultant who meets weekly with the Franchisee to help provide the opportunity to maximize store performance and profitability"
Posted by: Dave Barnes at Mar 31, 2007 4:50:09 PM
This has been a fairly common phenomena in northern California for quite some time. I haven't lived there in almost 10 years, but NorCal has Arco AM/PM gas stations which not only usually offer the lowest gas prices in a particular area, but they also outshine 7-11 etc., on food and beverage selection. Arco has crazy loyalty in NorCal -- and I can remember back during the first gulf war, they had a gas station in Lodi, Ca selling gas for 67-69 cents a gallon -- a good 30-40 cents cheaper than anywhere else. They had people lined up for nearly 2 miles trying to get gas, and when they got to fill up their tank, they'd spend a significant amount on soda, burgers, hot dogs, etc. The police had to come in and finally ask them to raise the cost of gas because traffic got blocked up so bad.
Anyway, long story short, I was very surprised when I first moved to DC, and the Exxon Mobile stations essentially just had a cooler with sodas in them. Place would have gone out of business in northern California. :-)
Posted by: kyle at Mar 31, 2007 5:18:35 PM
I haven't noticed the same phenomenon. In fact, I've noticed the opposite: gas station food marts don't seem as good as 7-11. Here's a hypothesis: the quality of all such markets is increasing, but you have gone to the gas station food marts more recently. You are therefore comparing current-quality gas station marts with past-quality 7-11s.
Posted by: Glen at Mar 31, 2007 5:20:55 PM
Wegmans rules!
Posted by: Danny at Mar 31, 2007 8:01:36 PM
There are crossroads gas stations in Wisconsin which serve as major markets rather than just convenience stores. I've seen liquor departments with single malt Scotch, and I even know of one in central Racine county with a decent head shop inside.
Posted by: triticale at Mar 31, 2007 8:05:11 PM
Vice, vice, baby: While the Philly Trader Joe's doesn't sell booze, it IS literally across the street from a "Girls Girls Girls" porno theater.
I've often wondered whether any othe TJs location can boast of being quite so, er, flava-ful.
Posted by: Jen at Mar 31, 2007 9:06:26 PM
A bit farther down south in Virginia, I am a big fan of WaWa (which is generally packached with a gas station). WaWa is a step above 7-11 because of its advanced freshly-made sandwich offerings, and now also has mix-it-yourself shakes. Sheetz is even better, as they carry Crispy Cremes and has a great hot peperroni sandwich. Valero has Crispy Cremes as well.
Convenience stores in Virginia can carry beer, wine, and malternatives. "Hard liquor" is reserved for the socialiast monopoly state stores, of course.
Posted by: Mr. Econotarian at Mar 31, 2007 11:24:50 PM
Correction to my earlier post: today I was informed that Minneapolis now has a Trader Joe's.
Posted by: stefista at Apr 1, 2007 10:17:41 AM
Where is the "high-end" mini-mart?
Even "elitist" shoppers like TC buy gas and need that "quart of milk."
Where is the "high-end" mini-mart? Obviously it would be adjacent to high(er) end neighborhoods, of which there are plenty. So why don't they exist? Selling better products in a more comfortable environment? Better products, GREAT take-out food, nice landscaping, better lighting etc. Ya know, Vivaldi playing in the background. (OK, not Vivaldi. Monteverdi.)
Posted by: David Sucher at Apr 1, 2007 10:37:43 AM
I have nothing to add except: Sheetz is the be-all end-all of convenience stores. If there's one thing Pennsylvania has going for it, it's Sheetz. William Penn, Benjamin Franklin, Andrew Carnegie...the historical significance of these men is nill compared to Bob Sheetz.
Posted by: Eli_Cash at Apr 1, 2007 6:11:10 PM
Slightly OT but I had no idea until my visit last November that there's something like 700 7-Elevens in Hong Kong - including one in the village by the Big Buddha and Buddhist sanctuary on Lantau.
If you want to eat cheap in HK, 7-Eleven is a godsend.
Posted by: BLB at Apr 1, 2007 10:36:20 PM
Professor Cowen.
The answer is simple. You pay more for the 7/11 brand. It is the same reason you go to a Holiday Inn or Marriot in a town, rather than another hotel, when you have no-one to refer you to a less expensive or better alternative.
Posted by: Allan at Apr 2, 2007 11:45:53 AM
In the St. Louis area the quality of 7-11s varies widely. The one by my house and the one by my office are both very nice -- clean, fresh milk, decent hot soup and fresh sandwiches. Some of the others are not so great. I guess it depends on the management.
QuikTrips always seem to be clean and nice no matter what neighborhood they are in. Everytime I go in I see somebody cleaning something.
Posted by: Chris at Apr 2, 2007 3:10:48 PM
I should add that 7-11's in Japan are much like 7-11's in the US, except they carry more dried fish and squid. Plus in Tokyo, you can usually pick up a collared shirt (only one size: thin), tie, or panty hose in case you stayed out all night drinking with your work buddies.
Posted by: Mr. Econotarian at Apr 2, 2007 3:28:19 PM
I have to say that I have only been to a 7-11 one time, and when I did go I did not see much food. I saw the occasional candy bars, slurpies, and hot dogs. Not that these things are not great, but after that trip I just saw the store as a franchise "pit-stop" for fast snacks and good slurpies. I do believe that this store (that I visited) was probably not the best of all the rest, so I am not judging 7-11 as a franchise, but I just would not think it would be a place to get good food products all the time. Chris commented on the fact that his local 7-11 is very clean and has great soup and sandwhiches, so I can see how his store would be probably be better than the average mart at a gas station. I think it is all about presentation and how the business handles their stores that decides which one you should shop from. When choosing between a 7-11 or gas station I think I would look into which one displayed the best food as well as the most food daily.
Posted by: Meagan H at Apr 2, 2007 9:19:57 PM
I shop at Whole Foods over TJs and it has nothing to do with signalling. Whole Foods around where I am (Silicon Valley) has a wider selection in general, and a more complete selection of organic (which I eat for non-hippy reasons). It's far more expensive, often for exactly the same product, but I'm very price insensitive for food. Also for time which means I won't shop at more than one place.
If I wasn't particularly intrested in organic, and a few products that you can only get at WF I'd be all over TJs. However I admire the Brand Management success that WF has had building themselves up.
Posted by: Bill at Apr 2, 2007 11:32:45 PM
"Something similar in Virginia (it is Virginia, right?) could explain Tyler's not shopping at Trader Joe's."
VA allows sale of beer and wine at grocery and convenience stores. For distilled liquor, you have to go to one of their government run places, of which there are none too many, but have rather low prices, in order to compete with DC liquor stores, because even a government sales operation likes to turn a profit. This leads to the paradox of a system that was meant to impede drinking in practice operating as a government supply of cheap liquor. Unintended consequences and all that....
Posted by: David Hardy at Apr 3, 2007 12:25:57 AM
If that 3-location-only law in Massachusetts is real, then I can furnish the third Trader Joe's that can sell alcohol there. My wife picked up a couple of bottles of their wine at the Framingham store just last month when we were in the area.
I have yet to see anything remotely like a high-end gas station convenience store in my area of Connecticut (between New Haven and Hartford).
Posted by: Derek Lowe at Apr 3, 2007 1:38:28 PM
"I have yet to see anything remotely like a high-end gas station convenience store in my area of Connecticut (between New Haven and Hartford)."
You'll see it soon. Many entrepteneurs are loyal readers of MR.
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I work at an exxon station and have worked at two other "gas stations" while in college and have learned that the owners usually only make a few cents per gallon on the gas. The the the gas does do though is bring business for other things. The station I work at is all about location. It serves a rural stretch of highway with no competition and the owners sell the right products; tobacco, animal feed, oil by the gallons, fence posts and wire, hardware of all kinds, and of course a huge selection of snacks and drinks and some decent breakfast bisquits and hotdogs for lunch. They also sell home decor items and gift shop type items that are attractive to the mountainous area. The majority of their income comes from what is sold inside the store, not what they make on gas. People blame us everyday for jacking up the price of gas but in reality we wish the price would go down as much as they do and charge as little as we can.
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アダルトレンタルサーバー--アダルト、風俗店専用レンタルサーバー
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