5/31/2024–|Last updated: 5/31/202405:16 PM (Mecca time)
Electra Consumer Products, the operator of the 7-Eleven franchise in Israel, announced a significant operating loss of NIS 37.8 million ($10.2 million), prompting the chain to close amid poor performance and geopolitical sensitivities against the backdrop of the Israeli war on Gaza.
Yedioth Ahronoth newspaper said that the small store brand, which tried to establish its presence in Tel Aviv in particular, and in the Israeli market in general, faced additional challenges due to the ongoing war on Gaza and the tensions that accompanied it in northern Israel and other regions, in addition to its fear of the impact of the escalating boycott movements in various parts of the world on its operations.
The franchise was sold at huge losses
7-Eleven’s operations, which were recently acquired by Seven Express for NIS 3.36 million ($900,000), showed disappointing financial results, with stores generating only about NIS 2 million ($540,000) in revenue in a quarter, according to the report. The newspaper mentioned it.
War and fear of boycott
Yedioth Ahronoth said that the recent war had a severe impact on Tel Aviv – where the first 7-Eleven store was located – as foot traffic decreased and military mobilization increased, which led to increased pressure on store operations as they mainly targeted pedestrians in city centers.
In addition, the newspaper cited unnamed sources that 7-Eleven’s management has taken steps to avoid publicity to reduce its visibility in an attempt to avoid anti-Israel protests and boycott movements at the international level.
Such protests have previously targeted other global brands such as Starbucks, McDonald’s, Victoria’s Secret, Bath & Body Works and many others.
Many brands are choosing to open stores in Israel without major advertising to avoid attracting attention, according to what the newspaper reported.
Fear of international and domestic protests – whether due to perceived support for the Israeli war on the Gaza Strip, or policies viewed as unfavorable by Israeli consumers – remains a challenge for multinational companies operating in the region.
Strategic withdrawal and market reaction
Electra’s decision to withdraw its investment from 7-Eleven came after a lengthy search for buyers, and the sale included the transfer of 8 store locations, in addition to its lease agreements, equipment and inventory, to Seven Express, according to what the newspaper reported.
The move effectively marks the end of the Seven-Eleven brand’s presence in Israel, as the new owner may launch a campaign to rename and launch the stores differently.