The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2017
7-Eleven Indonesia shut all 175 stores in one market exit
Modern Putra ran 175 Indonesian 7-Elevens; sales slid, the alcohol ban landed, a buyer walked — and every store closed by 30 June 2017.
7-Eleven · PT Modern Internasional · 2017-06
What happened
PT Modern Internasional held the Indonesian master franchise for 7-Eleven and grew the chain to 175 outlets, mostly in Jakarta. Sales peaked at IDR 1.2 trillion in 2015, then slid to IDR 891 billion in 2016 as local rivals Indomaret and Alfamart out-competed the chain on everyday convenience.
Two blows landed close together. A 2015 trade regulation banned alcohol sales in minimarkets — worth about 10 percent of store sales — and losses widened; 46 outlets had already closed by the end of 2016. A rescue sale of the franchise and assets to Charoen Pokphand Indonesia for IDR 1 trillion collapsed in June 2017, and on 14 June 7-Eleven Inc terminated the master franchise after 23 months of compliance talks.
All remaining stores — about 120 — shut on 30 June 2017, Modern Internasional citing a lack of resources. The exit ended a full-country retreat for the world's largest convenience-store chain, and Modern Internasional's shares fell more than 54 percent that year.
Why it happened
- The stores could not beat two cheaper rivals: Indomaret and Alfamart owned the everyday trips, and street food took the ready-to-eat ones.
- The alcohol ban cut a 10-percent revenue line overnight, with no regulatory way back.
- The last exit closed: when the Charoen Pokphand deal collapsed, there was no capital left to keep the doors open.
The lesson
The 7-Eleven name could not carry the Indonesian market against two cheaper rivals: sales slid, the alcohol ban landed, and the chain's first full-country exit followed.
Aftermath
The brand kept growing elsewhere in Southeast Asia; Indonesia remains the chain's most complete single-market retreat. Modern Internasional sold assets to pay creditors.
Sources
- South China Morning Post, 2017 — Why did all 7-Elevens in Jakarta suddenly disappear? (all outlets closed 30 June 2017; 7-Eleven Inc terminated master franchise with PT Modern Sevel 14 June 2017 after 23 months of compliance talks; PT Modern Internasional cited lack of resources; failed IDR 1 trillion sale to Charoen Pokphand Indonesia; 2015 ban on alcohol in minimarkets; competition and sluggish economy)
- Indonesia Investments — Convenience Store 7-Eleven to Close its Doors in Indonesia (175 outlets formerly operated; 120 closing by 30 June 2017 after 46 already closed since end-2016; sales IDR 1.2 trillion 2015 to IDR 891 billion 2016; alcohol was ~10% of sales before the April 2015 ban; Modern Internasional shares -54.55% year-to-date; competition with Indomaret and Alfamart)
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