Since lunchboxes were priced at NT$40 a pop at Taiwan's top convenience store, sales have risen six-fold, the head of 7-Eleven's public affairs said yesterday.
"Since the price is very attractive, an increasing number of consumers come to us for packaged meals," said Wang Wen-hsin (
Operating nearly 2,900 7-Eleven stores around the nation, the venture sold 40 million lunch boxes last year, a number that is expected to grow rapidly, according to Wang.
Fast foods such as lunch boxes, sandwiches, rice balls and hotdogs accounted for 11 percent of the chain's sales in 2001.
"And this year we plan to expand sales of the sector to 15 percent," Wang said.
7-Eleven started to put lunch boxes on shelves in 1999 and decided to cut prices and offer a NT$40 spicy-chicken entree at the end of last year. Most convenience store lunch boxes at that time were priced at between NT$55 to NT$70.
While unprofitable, the chain uses the cheap meals to increase traffic.
"Customers might step into our stores for lunch boxes, and then buy something else as well," Wang said.
Publicity is another benefit.
"Three months ago, many consumers didn't realize 7-Eleven sold lunch boxes, but now I bet most people know they can get cheap meals from us," Wang said.
Keen to profit from 7-Eleven's pricing strategy, the number-two chain operator -- FamilyMart Co (
"In order to attract customers we decide to wage a price war," said Chien Li-chung (
Early this week, the 1,010-store chain started to sell chicken lunch boxes at NT$39 apiece.
Sales of fast food bring in important revenue for convenience stores, therefore "we can't afford not to compete," Chien said.
She estimates the price war will last another six months.
Chien's speculation might be correct, since other competitors have poised to enter the fray.
"We've already decided to price our lunch boxes at NT$38, and plan to put them on shelves later this month," said Chen hsin-yi (陳心怡), a marketing official at the 600-plus store Hi-Life International Co (萊爾富) chain.
Convenience store sales growth also implies profit shirking from mom and pop lunchbox vendors.
"Our business is being eaten up by convenience stores," said Hsieh Tien-hsiang (
This month, the average number of lunch boxes sold per day is 30 percent less than last month -- about the same time the lunch box war began up the street.
But he doesn't worry about the competition. "This is only a temporary promotional event, not long-term pricing strategy."
"Besides, we have a lot of loyal customers in the neighborhood, preferring our unique taste over those standardized [convenience store] meals," Hsieh stressed.
"As the heat for cheap lunch boxes fades out, I believe customers will come back to our restaurant."
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