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Startling news from the retail front this week as two of the nation’s major retailers make surprising, even unlikely moves to expand their presence, challenge conventional wisdom and confound their competitors.

• Sources tell MNB that 7-Eleven this week will announce the creation of a superstore division within the company, designed to create what insiders are calling “the ultimate convenience store on a grand scale.” Store designers and marketers reportedly have been working on the concept in a basement office at 7-Eleven’s Texas headquarters for more than a year, and have a crystallized a 180,000-square-foot concept that is said to be a radical rethinking of the term “big box store.”

While details are not scheduled to be made public until late this week at the earliest, MNB has been told that the new concept will be carved into “pods,” with each pod featuring a separate entrance that will serve shoppers primarily interested in that specific category. Interactivity will be encouraged, with the chain looking to turn customers into partners in the development process, which it believes will then turn them into advocates for the concept to other shoppers. Deliveries will be made to the concept via an underground parking garage that will be specially designed to a) handle large trucks, b) keep the rigs out of sight, and c) allow the company to create an kind of campus-style ambience around the concept, which is being called, for the moment, “7-Eleven On Steroids” (a banner that is for internal use only, though insiders say they indeed expect the concept t be performance-enhancing when it comes to the company’s bottom line).

Among the offerings scheduled to be part of the new format are a fresh produce section that will be heavily skewed to pre-sliced and packaged fruits and vegetables (with single-serve salads said to be a major component); high-quality single-serve meals that are being branded with the Food Network in order to raise the level of both perceptions and delivery; and a pickup counter for products – including groceries – ordered from The dry grocery selection is said to be edited for convenience purposes, with the emphasis on both reduced brands and sizes; 7-Eleven is said to be working on an extensive private label program in both foods and nonfoods (using Staples’ private label program as a model). One intriguing notion – a pod called “The Men’s Store,” which will feature male-oriented food and nonfood selections, plasma TV screens perpetually tuned to ESPN, and what is being called the “largest men’s specialty magazine selection ever seen in one place.”

• The other news expected to make waves this week is the expected announcement by Starbucks that it will acquire the Burgerville fast food chain and expand it nationwide, therefore allowing it to battle with McDonald’s on two fronts even as Mickey D’s tries to compete in the specialty coffee arena.

Burgerville, while not known nationally, is well respected in the Pacific Northwest for its use of local and natural ingredients, including Tillamook cheddar cheese, Walla Walla onion rings, and blackberries in its shakes. Burgerville’s slogan: "Choose Fresh, Local, Sustainable. Choose Burgerville." Art various times in its history, Burgerville has been recognized for its quality products by both the Food Network and Gourmet magazine.

The company currently has just 39 locations, but Starbucks reportedly plans to quadruple that within two years once the acquisition has been completed.

One Starbucks insider tells MNB that CEO Howard Schultz has been almost apoplectic about McDonald’s getting any sort of credibility in the coffee arena. “They primarily serve fried, greasy slabs of meat, and somehow have gotten the reputation for having decent coffee,” Schultz reportedly said at a recent staff meeting. “Well, I’ve had it. Not only are we going to do everything possible to make sure that nobody ever equates their coffee offering with ours, but we’re going to show them that ‘fast’ food doesn’t have to be synonymous with ‘substandard’ food.”

The Burgerville brand, highly familiar to the Starbucks management team because of its geographic proximity, is said to be a natural fit. No word yet on whether the company will offer espresso drinks in the Burgerville locations, though frappucinos seem to be a strong possibility.

KC's View:
Y’know what is amazing to me? These kinds of stories always seem to happen on this particular date every year. It must be something about the first of April…