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7-Eleven quietly grows a restaurant chain

Laredo Taco Company, already numbering in the hundreds of units, will also have a prime position inside the c-store giant’s new prototype.
7 eleven
Photograph: Shutterstock

7-Eleven is trying a new way of competing with traditional quick-service restaurants: shoehorning a Mexican restaurant inside its stores.

The convenience store giant started installing units of Laredo Taco Company inside its retail outlets about a year ago. It’s now tinkering with a new c-store format known internally as the Evolution concept, which prominently features Laredo as part of the design’s expanded food and beverage options. Three Evolution-style 7-Elevens are currently open, with more expected to be developed across the country this year, according to CSP, a sister publication of Restaurant Business.

Also included in the Evolution format is a section called The Cellar, featuring wines and craft beers for on-premise consumption as well as takeout. Patrons of Laredo can dine on-site in an indoor seating section as well as on a patio.

Laredo, a proprietary brand, specializes in handmade tacos and other Mexican street foods, all made from scratch. 7-Eleven acquired it through a complicated $3.3 billion deal with Sunoco in 2018. Included in the purchase were about 1,000 units of Stripes, a regional c-store chain that featured a Laredo-branded counter inside its stores. The quick-service station drew a cult following with its handmade tacos and other Mexican street foods. About 500 Laredo stations were opened within Stripes’ Southwestern stores before the retailer became part of 7-Eleven.

The deal swelled 7-Eleven's U.S. presence to more than 9,000 stores.

Licensing rights to operate 207 Stripes stores not included in the Sunoco deal were awarded last year to another regional chain, Cal’s Convenience. The arrangement also allows those retail outlets to sport a Laredo unit inside.

7-Eleven has been a leader in blurring the line between c-stores and traditional quick-service restaurants. Much of that retail-foodservice competition has come in the morning, when convenience is paramount for many consumers. The expansion of Laredo is a challenge for lunch and dinner business.

Restaurant connections are part of Laredo’s DNA. Stripes and Laredo were formerly overseen by Steve DeSutter, a Burger King executive who left Stripes for the CEO’s job at Focus Brands in 2014. DeSutter retired last week from Focus, the parent of Auntie Anne’s and a number of other quick-service operations.

7-Eleven’s CEO is Joe DiPinto, who is also chairman of the board of Brinker International, the parent of the Chili’s Grill & Bar and Maggiano’s Little Italy restaurant chains.

The new Evolution concept is described by 7-Eleven as a “real-time experiential testing grounds” for innovations. A number of them are aimed at helping the c-store chain in the battle for share of stomach.

In addition to a Laredo restaurant, the stores feature freshly made baked goods, touchscreen-operated self-service hot drink dispensers and a cold treats bar featuring frozen yogurt and ice cream.

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