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C-store Foodservice: The Operator Quest for Quality

It's a balancing act in meeting consumer desires and facing execution realities.
Indoor dining area at Foxtrot

Hibiscus lemonade. Burgers served on brioche buns or made with a choice of Angus beef or black bean patties. Customizable bowls with options like egg or egg whites on a base of roasted potatoes or spinach, with distinctive flavor-enhancers like green chili queso and jalapeño crema. A dressed-up grilled cheese with turkey bacon and Parmesan-crusted sourdough bread.

These offerings weren't pulled from the menus of trendy fast-casual restaurants; all are relatively recent examples of convenience store foodservice from the likes of 7-Eleven, Love's Travel Stops, Rutter's, Kum & Go and Amazon Go.

The change in c-store foodservice has become an old story really (or a nonstory for younger consumers who have grown up in markets with multiple examples of convenience stores offering fresh, restaurant-quality food and beverages). Annual rankings of top-performing foodservice operators now routinely include c-store chains, and even Food & Wine has published a ranking of the best convenience stores.

We devoted industry-watchers have been talking about this for decades now.

The Ongoing Fragmentation of Convenience Store Foodservice

But consumers can be forgiven if some are still ignorant of the steady transition from stale coffee and roller dogs to coffeeshop-style nitro brews, in-store delis and pizzerias, and healthy options that extend beyond a small and tired selection of better-for-you afterthoughts.

One big reason for that is the convenience store landscape remains fragmented in terms of commitment to foodservice and level of execution. Nearly a decade ago, Foodservice IP participated in Convenience Store News' "How-To-Crew" content series, which segmented foodservice competency into three categories:

  • 101 Operators: Those with no foodservice or limited offerings focused on hot beverages, fountain drink programs and self-serve prepared foods.
  • 201 Operators: Those that utilize more versatile equipment to pursue expanded programs that offer broader variety, including the possibility of custom-made sandwiches, salads and hot foods.
  • 301 Operators: The foodservice leaders that have established consistent restaurant-quality foods and service across all dayparts.

Patrons of 301 operators like Sheetz, Wawa, Rutter's and the like are well aware that a convenience store can handily satisfy their foodservice cravings with a host of fresh, interesting and tempting options. Those who have not been exposed to such destinations are less likely to cross the threshold and go inside — which is a problem as healthier lifestyles have shrunk the market for cigarettes and sugary sodas, and now electric vehicles are pulling drivers away from the gas pump.

Foodservice Upgrades Top of Mind for C-store Operators

Expect convenience stores to continue graduating beyond the 101 level.

In our most recent study on the channel, we asked operators about their commitment to various foodservice initiatives: Topping the list? Increasing quality.

How does that align with consumer input on what compels them to purchase foodservice from a convenience store? Perfectly, as quality of food was the leading answer. (How fresh it looks, good value/price/affordability and craveability rounded out the top four selection criteria.)

So, we know that operators and consumers continue to look for c-store foodservice to be "better," but we also need to recognize that this can mean many different things: taste, obviously, but also appearance, temperature and even packaging.

Foodservice 101 convenience stores have ample room to improve their positions, yet strengths, weaknesses and potential vary considerably among individual operators.

Space & Store Design Influence Foodservice Prospects

Many c-stores simply do not have room for a foodservice program modeled after best-in-class operators. Most in the 301 tier have long been food-forward and have designed their operations around putting foodservice at the forefront, including larger footprints that afford room for more equipment, the ability to house made-to-order, self-serve and grab-and-go offerings, seating, and service features that truly align these locations with on-the-go, convenience-driven consumers (e.g., dedicated pickup areas for advance orders, drive-thrus, etc.).

Understanding Concept Positioning Relative to the Competitive Landscape Matters More Than Ever

Foodservice offerings in c-stores need to contribute to creditability as a restaurant alternative. The 301 realm of c-store foodservice no doubt offers inspiration for operators looking to elevate foodservice quality. But it is important to remember that Wawa, Sheetz, Rutter's and others that showcase the loftiest possibilities are mostly regional concepts. Meaning: It remains imperative to understand a c-store's local market dynamics and plan accordingly.

Look to key focus areas that are not optimally served by surrounding competitors and that can be consistently executed. Look at what other nearby c-stores are doing to draw convenience-minded foodservice patrons, certainly, but also coffee shops, delis and sub shops, pizzerias, the traditional "fast food" specialists, and the grab-and-go prepared foods in supermarket delis.

How will any quality upgrades stand out? And how will they be promoted? C-store foodservice has come a long way, but we still need to work harder in moving beyond the days of appealing examples being "hidden gems."

Innovation Needs to Be Rooted in Shifting Operator Priorities & Keen Understanding of Consumers

The writing is on the wall that "smokes, cokes and gas" will not sustain convenience stores into the future and that foodservice is primely positioned to fill the void.

But foodservice is not traditionally a retailer core competency, and the industry overall is still working to understand to what extent pandemic-driven changes in consumers' habits will endure. Our research revealed that the post-2 p.m. afternoon snacks/meal is now the prime foodservice daypart for c-stores, which has surely been influenced by altered commuting patterns.

Innovation must be guided intelligently, with every offering making strategic sense. Advancing foodservice insight and relying on data to verify consumer demand/interest in any changes being considered is vital. (And industry partners can be invaluable in this regard.)

Tim Powell is managing principal of Foodservice IP, a research-based management consulting firm specializing in foodservice. Its 2023 study, "Capturing Opportunities in the Convenience Store Prepared Foods Channel," is a comprehensive assessment of the channel, recent shifts and future outlook. It examines patron attitudes, behaviors and purchasing, operator perspective, key product categories, and more. An infographic with further detail can be found here.

Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News

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