Ito-Yokado Supermarket Business on the Rise: Seven & i Accelerates Growth Drive

Seven & i Holdings Co. announced its plans to spin off and publicly list its Ito-Yokado supermarket operations by fiscal 2027. This decision was made in order to drive growth in the struggling business by utilizing external capital. The spinoff will enable Seven & i to concentrate its resources on its profitable Seven-Eleven convenience store business. The company, which acquired the U.S. convenience store chain Speedway LLC in 2021, is also considering further acquisitions in North America.

President Ryuichi Isaka of Seven & i Holdings Co. shared the company’s strategy with reporters in Tokyo on April 10, 2024. He stated that allowing the supermarket business to make investments for its growth independently was deemed the best course of action. Even after the share sale, Seven & i will still retain a stake in the supermarket unit and will continue to collaborate with the convenience store business in terms of food development.

The Ito-Yokado supermarket unit has been undergoing significant restructuring in recent years, which included closing unprofitable stores and exiting the apparel business. This was necessary due to the rising competition from online retailers and discount stores. The decision to spin off the supermarket operations follows a demand from ValueAct Capital, a U.S. investment fund and activist shareholder of Seven & i, to completely separate the convenience store operations from other businesses to enhance corporate value.

In response to this pressure, Seven & i sold its department store unit Sogo & Seibu Co. to U.S. fund Fortress Investment Group LLC in September of the previous year. Additionally, the company reported a 20.1 percent decrease in group net profit for the fiscal year ending in February, totaling 224.62 billion yen ($1.5 billion) on sales of 11.47 trillion yen, a 2.9 percent decline.

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