Value & Quality Are Keys to Strong Foodservice Sales

NEW YORK -- Foodservice is proving to be a resilient category for convenience stores in these tough economic times, as long as retailers focus on giving consumers quality product at value prices, according to attendees at Convenience Store News 2009 Foodservice Roundtable, held yesterday at the publication’s Manhattan headquarters.

Foodservice sales have grown at a double-digit pace per year since 2004, according to the CSNews’ annual Industry Report. In a new C-store Foodservice Pulse Study, presented by CSNews Editor-in-Chief and roundtable moderator Don Longo, 61 percent of c-store companies reported that their 2008 foodservice sales increased over the year before. The study, conducted last week and aimed at revealing preliminary 2008 data on c-stores’ foodservice results, also found that 51 percent of respondents saw their foodservice category outperform all other in-store categories in sales growth last year, and 49 percent said their foodservice sales for the first half of 2009 are projected to beat the previous year’s foodservice sales, by a mean average of 4.9 percent.

With consumers trading down from fine dining to casual dining; casual dining to fast- casual; fast-casual to quick-service restaurants (QSRs); and so on, c-store operators stand to benefit in the chain if they focus their foodservice offerings on perceived value rather than discounting, said foodservice consultant and presenter Dean Dirks.

“I’ve never been a believer in discounting. I am a believer in value or the perception of value,” Dirks explained. “C-stores can’t compete with QSRs on discounting.”

Several best-in-class convenience chains attended the two-day event—sponsored by Boyd Coffee Co., Eby-Brown and Merisant Co.— and shared the best practices and promotions they’re using to win in these challenging times. Kwik Trip Inc., Petro-Canada/Neighbours, Quick Chek Food Stores, Royal Buying Group, Tedeschi Food Shops, Thorntons and Wilson Farms were among the companies represented.

Noting the lack of reliable data on the foodservice category for c-stores, Longo also announced during yesterday’s event that the industry’s leading media brand has commissioned Nielsen’s Homescan division to conduct an exclusive, foodservice-focused national consumer study of 17,000 households, asking how and why they shop c-stores. Results of that study will be published in the June 1, issue of CSNews.
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