Dive Brief:

• 7-Eleven is expanding its Evolution Store concept to San Diego, California, and Washington, D.C., the company announced in a press release. The retailer opened its first Evolution Store in Dallas last March.
• Similar to the Dallas store, both new locations will have a Laredo Taco Company restaurant, cold treats like frozen yogurt and specialty beverages including cold brew coffee and kombucha on tap. The new stores will also feature mobile checkout via 7-Eleven’s app, freshly baked pastries and skin care and makeup products. 
• The Washington, D.C. store is now open and the store in San Diego will open in the coming months, according to the release. The company said it plans to open additional Evolution Stores across the U.S. throughout 2020.

Dive Insight:

7-Eleven's Dallas Evolution store, which opened last spring, "exceeded the retailer's expectations," according to the company release, raising the bar for a nationwide expansion as high-tech competitor Amazon Go continues to grow and evolve. The concept serves as a testing ground for 7-Eleven where it can try various offerings like made-to-order food and beverage, new slurpee flavors and in-store technology.

The latest iteration builds on the beta store in Dallas, expanding to categories like beauty and electronics, which will be available for purchase from kiosks. Delivery will also be available in Washington, D.C., and San Diego, with the company’s 7Now delivery app available for customers to order snacks, groceries and household essentials on-demand from the new stores. The San Diego store will even have a dedicated space called "The Cellar" for wine and craft beer, as well as a growler station with rotating taps.

Expanding to San Diego and Washington gives 7-Eleven the ability to test its concept in different regions of the country with contrasting markets.​ Its store in the nation’s capital is in a walkable, bustling area of the city near both businesses and tourist attractions. The San Diego store, by comparison, will be located further from the city center in an area where consumers rely primarily on their cars for transportation.

7-Eleven is facing considerable pressure to update its store technology. The convenience retailer's mobile checkout and kiosk purchasing make the buying process faster and more frictionless, but the company may need to make even further enhancements as Amazon Go continues its march across major U.S. cities and just introduced a grocery concept. Earlier this month, 7-Eleven noted it's testing its own cashierless stores in Texas.

7-Eleven’s lab concept is one for restaurants to keep an eye on as it grows. The format is encroaching on restaurants' territory with its in-store Mexican restaurant, which makes handmade flour tortilla from scratch and fresh salsa bar. Its taco options resemble QSRs like Chipotle with proteins like barbacoa, carne asada, carnitas and asada. It even has breakfast tacos, a daypart Chipotle has not gotten into. It also has the convenience that shoppers now demand.