Reliance 7-Eleven Deal: There has been a big stir in the country’s retail sector. Leading business company Reliance Retail has decided to end its 5-year-old partnership with the world’s largest convenience store chain 7-Eleven. Most of the 60 7-Eleven stores operating in India are going to close after this big decision. Currently, select stores where the work is going on are also preparing to close by selling off the rest of the merchandise. When Reliance announced the launch of 7-Eleven in India in 2021, it was considered a new experiment in the retail market. But in 5 years this foreign model could not withstand the reality of Indian market.

Foreign models crushed among grocery stores

The biggest challenge a big brand like 7-Eleven faced in India was the retail structure here. On the one hand, the streets are dotted with millions of small grocery shops, catering to people’s daily needs for decades. On the other hand, there are quick commerce companies like Zepto, BlinkIt and Instamart, which deliver snacks, cold drinks and rations to doorsteps within 10 minutes.

Between these two, the 7-Eleven model was badly caught. The entire concept of a convenience store is based on the fact that customers come to the store for immediate needs. But in India, this work is already being done by the corner grocery store at very low cost. Grocery stores have low rents, no huge overheads for employees and their margin structure is also quite different from that of corporate companies.

On the other hand, fast commerce companies gained momentum after the Corona pandemic. The goods that the customer would have bought at a 7-Eleven store, started arriving at home within minutes. In such a situation, customers have no solid reason to go to big AC stores. This double blow stopped the entire project of Reliance.

90 crore loss on 92 crore revenue

It was becoming increasingly difficult for Reliance to cover the costs of these branded stores run in a corporate style. Opening a store in any prime location requires a hefty rent. Apart from this, the cost of staff salary, electricity bill, inventory and logistics are also very high.

The financial figures of ‘7-India Convenience Retail’, the company managing this partnership, clearly reveal this bitter truth. The company’s total revenue for the financial year ending March 2026 is around Rs. 92 crore ($10.6 million). But the surprising thing is that during this period the company made around Rs. 90 crore had to suffer a huge net loss. That means the company was losing as much as it was making.

Devangshu Dutta, founder and CEO of consumer sector consultancy firm ‘Third EyeSight’ believes that Reliance wants to reach consumers through every channel, but sustainability is the most important in any business. He said with the advent of fast-paced commerce after the pandemic, the pressure on convenience stores has increased. Both models cater to the immediate needs of customers with similar accessories. Grocery stores operate at very low cost. In such a situation, Reliance’s move shows that the company is now rethinking the entire format.

A superhit worldwide, a repeated failure in India

7-Eleven’s parent company is Japan’s ‘Seven&I Holdings’. It is one of the largest retail networks in the world with more than 85,000 stores worldwide. 7-Eleven is popular in countries like Japan, Taiwan, Thailand and Singapore. Stores such as Lawson in Japan and Oxo in Mexico are counted among the largest retailers in their respective countries. However, Seven&I Holdings is also restructuring its overseas operations and closing stores in North America due to changing consumer behavior.

But the formula of organized convenience stores was never fully successful in India. Before 7-Eleven, companies like Easyday, Peacock and Spencers also tried to set up a network of smaller stores. But over time, all of them had to either close their stores or reduce their network.

Even today, about 75 percent of the sales of packaged consumer goods (FMCG) companies in India come from street grocery stores. This figure proves how strong the traditional network is. Expensive rent and staff costs become impossible to cover unless the store is crowded with customers and merchandise sells quickly. Convenience stores are profitable only when the number of stores is large, they have a strong supply chain, and they have a strong selection of fresh foods or their exclusive private label brands.

What will 7-Eleven do next in the Indian market?

Reliance started expansion of 7-Eleven stores from Mumbai in 2021. After this, the company opened outlets in a few other cities as well, but the scope was always very small compared to Reliance’s vast retail network. The company could not take it to a level where the huge costs could be handled.

Now that Reliance has decided to terminate the agreement, a big question has arisen for 7-Eleven over its future in India. Sources say that 7-Eleven is in no mood to completely abandon a big market like India. The company may look for a new partner to maintain its presence in India. However, no final decision has been taken yet.

Reliance’s retreat is not just about breaking the partnership. This is also a clear indication that the rapid commercial storm in the Indian retail market has shaken the traditional models. Unless the retail format offers consumers a cheaper option than grocery or a faster option than fast commerce, it will be very difficult to survive.