Angus McKay – 7-Eleven Australia CEO

Angus McKay joined 7-Eleven as CEO in 2016, and is responsible for leading the 7-Eleven team, growing the 7-Eleven brand in this market, and maintaining the company’s position as Australia’s rst choice in convenience. His former roles include managing director and CEO of e Skilled Group, managing director of Pacific National Rail, chief financial officer for Asciano Limited, and various senior roles at Foster’s Group.

It’s 7-Eleven’s 40th anniversary in Australia. How have you celebrated this milestone?
August 24 marked 40 years since American TV celebrity Don Lane and an elephant named Sue opened the first 7-Eleven store in Australia.

What was launched as a bold and imaginative venture has now grown to become one of Australia’s largest retailers, and the first choice in convenience, with 670 stores across four states and the ACT, serving seven customers every second of every day.

We marked the day in a low-key manner, with a reflective video and note sent to all our team members, cupcakes sent to all our state offices, and a cake-cutting ceremony with our Chair Michael Smith and me, with the team at our support office in Melbourne.

We’ll take more of a look back and celebrate a whole lot more when our support teams come together for our end-of-year conference.

How does the average 7-Eleven store that we see today differ from the 1977 concept?
The same unrelenting focus on the customer and willingness to innovate that set us apart four decades ago still drive us today.

As our customers’ needs have evolved, so have our stores, evolving from [being] the place for emergency out-of-hours grocery purchases to now being a destination for great-value food on the go, any time of day or night.

Our store layouts have evolved accordingly, devoting more space to range a broader range of food-on- the-go choices, and particularly our famous $1 coffee. The look and feel of our stores is also increasingly reflective of a food destination rather than a supermarket.

Reflecting our growing status as the corner store, we’ve also increased the range of services now available through our stores, so customers can pay some of their bills, top up public-transport tickets and even collect their parcels at a time convenient to them.

But while the range, look and feel of our stores has evolved, at our heart we’re still the corner convenience store, proud of the role we play in the daily lives of millions of people by helping them make the most of every day – from the early-morning coffee or lunch on the run, to the after- school treat or late-night snack, and every occasion in between.

How is 7-Eleven evolving to meet the needs of convenience and food-to-go shoppers?
Our focus on hot drinks is well known. Our famous $1 coffee delivers quality, value and convenience in every cup, which is why we’ve grown to be Australia’s second-largest coffee destination, selling about 70 million cups per year.

Our food-on-the-go offering has grown exponentially, and now includes sushi, salads, soups, bakery items and ready meals in addition to our quality sandwiches and pastries, with daily deliveries to every one of our 670 stores. Integral to our food offering is a range of better-for-you options. Convenience customers don’t want to sacrifice healthy choices for convenience, and we work hard to provide a range of healthier options in all our stores. Even our famous Slurpee is available in a less-than-one-per-cent-sugar version – Slurpee Zilched – which is growing rapidly as consumers seek out better-for-you options.

We’ve introduced a range of services into our stores, including ATMs and Moneygram kiosks, to name a few. We’ve also introduced parcel-locker services into a number of our stores, enabling customers to collect their parcels at a time convenient to them, not the courier company, and we see great opportunity for further innovation.

We’ve introduced world-leading innovation to our fuel pumps, with the 7-Eleven fuel app enabling customers to lock in their lowest petrol price nearby, then redeem
it at any 7-Eleven within seven days. Since its launch a year ago, more than 600,000 people have downloaded the app, and saved more than $2 million on their petrol bills.

We’re continuing to innovate our product range, services and store formats – watch this space!

At a supplier briefing earlier this year, you spoke of 7-Eleven’s desire to be “known for new”. How is 7-Eleven working with suppliers to ensure a first-to- market offer?
We want to be known for new and exclusive offers in our stores, and we know that’s what our customers expect from 7-Eleven. We regularly collaborate with our suppliers and share insights to identify product innovations ideally suited to our customers, and work together to roll them out to our 670 stores.

What are the key challenges facing the market and how is 7-Eleven addressing them?
Competition is increasing. For us at 7-Eleven, that means we have to be better than we were yesterday, adapting and innovating to deliver what the consumer wants.

Perhaps more importantly, we need to run our own race, figuring out what
the consumer wants today and tomorrow, and bring that to life in our stores.

The cost of living is rising. At 7-Eleven, we’re very conscious of that and work hard to make sure our offerings deliver real value for money to our customers.

The world of convenience has always been fast paced; it is simply getting faster. We need to be capable of meeting that pace, andadapting our formats and offers to meet these ever-changing needs.

It’s been two years since 7-Eleven made headlines when Fairfax revealed instances of franchisees underpaying wages and doctoring payroll records. Has the business sustained any reputational damage?
Understandably, the revelations hurt 7-Eleven’s reputation, and morale within the business. However, I am really pleased that as we have worked through our voluntary wages repayment program and implemented changes across the business, those stakeholders close to the business – including our staff, franchisees, suppliers and others – know we are absolutely genuine in our commitment to right the wrongs and prevent any repeat, and have responded accordingly.

7-Eleven has since introduced a number of measures to combat underpayment issues, including biometric time-clock and centralised payroll systems, and a significant increase in field-level investigation and compliance activity. How have franchisees responded?
While the initial revelations undoubtedly affected the trust and relationships between our support teams and our franchisees, I am delighted that over the course of the past two years, as we have implemented our comprehensive reform program, those relationships have improved and strengthened beyond where they were two
years ago to now becoming a real partnership.

The vast majority of franchisees want to do the right thing, and the changes we have implemented help them do so.

Our franchisees also want to see the goodwill of their businesses grow, and they recognise that doing the right thing, and protecting 7-Eleven’s overall reputation, is central to that success. Therefore, they welcome measures that help them comply with workplace laws, and ensure that the rest of the network is doing the same.

You joined 7-Eleven (and the P&C industry) as CEO in March 2016. What surprised you most about the sector, and what has been your proudest achievement of the past year and a half?
Having spent a number of years in the alcohol industry, I’d gained a pretty good exposure to retail and the FMCG sector. On joining 7-Eleven, one early learning was how the smallest tweak, rolled out across 670 stores, quickly adds up to be pretty significant, whether that be a savings, investment or process change.

Another great thing about retail is the instantaneous feedback from customers, who will very quickly and directly let you know when you are getting it wrong or getting it right.

Looking back over the past 18 months, my proudest achievement is without doubt the way the business has responded to the shortcomings identified within
our network. From the outset, we took accountability, ensured the repayment of outstanding wages (despite no legal obligation to do so), and invested significantly in a comprehensive reform program ensuring our franchised store network operates at the high standard we and the community expect. I’m really proud of the team, and to be a part of 7-Eleven.

What personal philosophies drive you in business?

Team is really important. Not only do you need a good one, the team itself must perform at the highest level. I am privileged to work with a great team and we invest a great deal of time making sure we continually look to improve.

Values are also really important to me. I will leave others to judge mine, but working in a business that has great values, and having people around you that live those values, matters.

What do you think will have the biggest effect on the Australian P&C industry in the next 10 years?
The biggest change we would like to see within the next few years is for convenience retailers to be able to sell a bottle of beer or wine for our customers to enjoy with the meals they are increasingly buying in the convenience channel.

As Australia’s first choice for convenience, we believe we should be able to offer our customers the choice to pick up a bottle of beer or wine on the way home, just as convenience stores can and do in many other developed markets around the world.

Beyond the current decade, the changing nature of transport (electric cars and hybrids, transport as a service, driverless cars, etc) has the potential to be transformative for our industry. We actively monitor the markets that we participate in, to understand trends and opportunities, and ensure we are well-placed for the future.

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