New CSNews Research Shows Convenience Foodservice Provides Healthy Serving of Sales & Profits
NATIONAL REPORT — Optimism for the foodservice category persists in the convenience channel, according the exclusive 2017 Convenience Store News Foodservice Study.
Nearly nine out of 10 c-store operators surveyed this year (87.8 percent) expect to end 2017 with foodservice sales gains for the year, while 10.1 percent believe their sales will stay the same, and an extreme minority of 2.2 percent expect to see their sales down this year compared to last year.
Optimism about profits matches optimism about sales. When asked what they expect to see at the end of 2017, 83 percent of retailers expect their foodservice profits to have increased year over year, 14.8 percent expect profits to stay the same, and just 2.3 percent expect lower profits.
Industrywide, lunch (11 a.m. to 1:59 p.m.) captures the largest percentage of foodservice sales at 34.8 percent, followed by breakfast (6 a.m. to 8:59 a.m.) at 26.1 percent.
However, there is a notable disparity here between small operators (with one to 10 stores) and larger chains, with the latter drawing in more morning foodservice customers and fewer lunch and dinner foodservice customers. Small operators report that 37.5 percent of their foodservice sales come at lunch compared to larger chains at 27.1 percent. In contrast, small operators say 24 percent of their foodservice sales come at breakfast, compared to 31.9 percent for larger chains.
The dinner daypart (4 p.m. to 6:59 p.m.) remains in a distant third place, generating 16.1 percent of foodservice sales for the total c-store industry. Though, small operators again see more sales during this period at 18.2 percent compared to 10.6 percent for larger chains.
Breakfast and lunch were also the dayparts that saw the biggest increase in foodservice sales in the past year, with both listed by 31.2 percent of c-store operators as being the daypart with their most sales growth in the category. Larger chains outpaced small operators in growth at breakfast (45 percent vs. 26.3 percent, respectively) and lunch (35 percent vs. 29.8 percent).
Meanwhile, small operators showed incremental growth in dayparts such as the morning snack (9 a.m. to 10:59 a.m.), afternoon snack (2 p.m. to 3:59 p.m.) and late night (10 p.m. or later), whereas foodservice sales growth at larger chains was flat during these dayparts.
Predictably, breakfast and lunch are the dayparts that c-store retailers predict will show the biggest growth at the end of 2017 (27.3 percent and 24.7 percent, respectively). Larger chains are more optimistic about breakfast daypart growth, while small operators express more optimism about growth of the evening snack daypart (7 p.m. to 9:59 p.m.).
For more findings from the Foodservice Study, look in the Convenience Store News Guide to Foodservice, published alongside the November issue.