Driving Sales

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Driving Sales

03/04/2015

The cornerstone of the convenience store industry is to offer convenience to customers, making each visit as seamless and quick as possible — whether it’s filling up on fuel, grabbing lunch or picking up a few needed items. People are more pressed for time than ever before, and what was convenient yesterday may not be convenient today.

To keep up with these changing needs, many convenience stores are incorporating drive-thrus into their locations, where they offer foodservice, coffee and more without a customer ever having to leave their car.

The Parker Cos., based in Savannah, Ga., opened its first store with a drive-thru last summer, and The United Family’s United Express concept, based in Lubbock, Texas, operates a number of locations with a drive-thru, selling a variety of items including the chain’s Arriba brand of specialty coffee and tea. At Sheetz Inc., operator of 500 stores, the chain just opened its 49th location featuring a drive-thru, which accounts for 10 percent of inside sales at stores with the feature.

“Consumers today are time-starved, especially the younger generation,” said Maurice Bared, chief operating officer of Farm Stores Corp., based in Palmetto Bay, Fla., operating 70 full-service, drive-thru-only locations throughout Florida. “They want it now, and their time is valuable. The drive-thru offers that.”

In the c-store industry, the foodservice category continues to grow, with sales climbing higher each year. This puts many c-stores in direct competition with quick-service restaurants (QSRs). Some c-store operators believe QSRs like McDonald’s and Wendy’s are actually their biggest competitors, and these restaurant chains have been mastering the drive-thru experience for years. Even Starbucks and Dunkin’ Donuts continue to add drive-thru locations, competing with c-stores for the coffee customer.

“C-stores’ adoption of drive-thrus is adapting to the customer’s changing perception of convenience,” explained Steven Montgomery, president of b2b Solutions LLC, a consulting firm in Lake Forest, Ill. “The QSR industry has morphed from a place where most customers bought their meal inside the restaurant to where the majority of the sales come via the drive-thru. This helped move the customer’s perception of what is convenient and what is not.”

Since many QSRs do 60 to 70 percent of their overall business via the drive-thru, according to QSR Magazine, c-stores with a robust foodservice program can not only offer more convenience to their customers with a drive-thru, but can also rack up more sales with the option. For Sheetz, food was the main motivation behind its adoption, according to Jenna Coltrin, drive-thru development manager for the chain.

“We want to be known as a restaurant that is also able to provide you with your c-store needs,” she said, explaining that customers can get any foodservice item via the drive-thru, including a made-to-order sub, pizza, burger or a Sheetz Bros. coffee. “The drive-thru is about food to our customers, but they can also get a gallon of milk and a carton of eggs.”

TACKLING PERCEPTION

While some c-store players are reporting success on the drive-thru front, others believe more education is needed to change consumer perception about drive-thru convenience. There are some companies that attempted to offer the drive-thru experience, but ended up pulling the option after some time.

SavOn Convenience Stores, owned and operated by the Oneida Indian Nation based in Oneida, N.Y., added drive-thrus to four of its 12 stores in March 2013, but told Convenience Store News the company no longer operates drive-thrus. And Slovacek’s Market, a single store based in West, Texas, advertises drive-thru on the store’s website, but the feature was never opened to customers, according to the manager.

“What I found for us in the Midwest is the c-store drive-thru is still a concept that needs education,” said Scott Zaremba, president of Zarco USA in Lawrence, Kan., operator of three locations. At one of his stores, he has both a sub shop and a coffee shop, each with its own drive-thru, but he has not added the option to the c-store. However, with the addition of a proprietary ordering system at the pump, this is his next step.

“We developed touchscreens at our pumps so customers can order a sub or coffee and go from the pump to the drive-thru to pick it up,” Zaremba said. “Now, it will be easier to morph the drive-thru concept to the c-store side because that is the ultimate goal. Customers can order at the pump and the interior crew can pull the items for them and have them ready when they are done fueling.”

When Sheetz first entered the drive-thru arena, the company started in its hometown of Altoona, Pa., and put a lot of time into researching what its customers wanted via a drive-thru before taking it on. At first, the chain only offered a limited menu of foodservice items at four locations, but soon realized customers wanted more.

“We found our customers wanted to be able to get anything inside the store through our drive-thru and when we expanded the selection, our sales went from 2 percent of inside sales to 10 percent,” Coltrin noted.

Also, when a new drive-thru opens, Sheetz will do an interview with the local newspaper, promoting the drive-thru and all that it offers to educate customers in that area.

MASTERING SPEED OF SERVICE

Another area for c-stores to consider regarding drive-thrus is speed of service. QSRs still lead the way, with Wendy’s boasting an average service time of 145 seconds, according to a 2011 QSR Drive-Thru Performance Study published by QSR Magazine. However, fast-food companies don’t offer anywhere near the SKUs available at a convenience store, nor are their items as customizable.

“Unlike a QSR, where the number of items is quite small compared to a c-store, our retailers face the challenge of how many items do they want to offer,” said Montgomery of b2b Solutions. “Too few and no one will be attracted to their drive-thru. Too many and the time to serve gets to be too long and drives up labor cost.”

Sheetz, which is known for its made-to-order (MTO) line of sandwiches, extended its indoor self-service ordering kiosk concept to the drive-thru, allowing customers to place an order and customize their sandwiches the same way they do inside the store. Because of this customization, they are not as fast as a QSR, but they are not trying to be, according to Coltrin.

“Our goal is to offer a convenience service to people,” she said. “We want to get our food out as fast as possible, but we don’t have the food just sitting there waiting to be handed out the window.”

When an order goes through the outdoor kiosk, it hits the store’s kitchen monitoring system, which notes it’s a drive-thru order at the top. There’s also separate screens for drive-thru orders, and all employees wear headsets so they can hear when an order comes in because most people will say their order out loud while entering it, Coltrin noted.

“The drive-thru is a team effort where everyone works together to execute, but we do have one employee at the store who knows drive-thru is his or her main focus that day,” she explained.

In addition to the MTO sandwiches, fried items are also cooked to order, and anything that takes time to make can be more challenging. To address this, the chain created a system that allows stores to cater to those with quicker orders first.

“If someone only ordered coffee, you don’t want them sitting there waiting for the person who ordered three pizzas and a cheesesteak. If we can service the second car in line faster, we will park the first car to move to the second, and then take the order out to the parked car when it’s done,” Coltrin said.

At Farm Stores, which is now [launching a national franchise rollout, the goal is to keep each transaction under two minutes from the time they reach the cue, despite the nearly 800 SKUs carried in the store including foodservice and coffee products.

The chain is also working on a pre-order app so customers can place an order from home or on their way to work and it will be ready by the time they arrive, Bared said.

“We deliver high-quality products like fresh-baked breads delivered hot to the car, but we need to deliver fast so the equipment and process flow we use is designed to meet this speed,” he said. “There are techniques we use in the store to serve the second, third and fourth car, as well as the first.”

Farm Stores, which are less than 700 square feet, feature drive-thru windows on both sides of the building and employees also run orders out to customers’ cars in addition to handing them through the window. While its hot bread is the No. 1 selling product, milk, eggs and cigarettes are other top products for the chain, which is likewise known for its soft-serve ice cream. This past year, Farm Stores also launched a new premium coffee line, now selling espresso, cappuccino and lattes.

Another drive-thru-only concept, The Cube, which just opened its first location in Norman, Okla., in December, didn’t think it would be able to offer high-quality foodservice items fast enough, but after hiring an executive chef who trained in France and owned restaurants in the past, the owners realized they would be able to get the window time customers expected without compromising the quality of the food.

Although The Cube kitchen is small, it houses two turbo convection ovens, which cook the food quicker than a conventional oven. The store serves breakfast, lunch and dinner no matter what time of day it is. However, the owners did limit the menu in order to maintain the timeframe of service desired.

“Everything is made fresh, even the pizza. We cut the meats and cook the sausage at the store,” said Jake Sharp, one of the owners of The Cube. “We don’t have fryers, microwaves or grease, and we can take the pizza dough, Boar’s Head cheese and Italian sausages, and have it ready for you in four minutes.”

For those convenience stores delivering what the customers want and maintaining speed and convenience at the drive-thru, the addition is bringing in sales and profits, while satisfying customers. Done right, it can be a win-win on both sides.

“A drive-thru offers the customers the greatest convenience,” said Montgomery. “They can buy items and never leave their car, and this can be a great advantage to anyone traveling with children or in bad weather. For the retailer, it allows them to capture sales they might not have been able to do if the customer had to come into the store to make the purchase.”

“Our goal is to offer a convenience service to people. We want to get our food out as fast as possible, but we don’t have the food just sitting there waiting to be handed out the window.”
— Jenna Coltrin, Sheetz Inc.