While 28 percent of all shoppers said their primary purchase during their in-store shopping occasions at c-stores over the past 12 months was foodservice, that number was even higher for millennials. Thirty-seven percent of millennials said their primary purpose of shopping at a c-store was for foodservice.
Overall, packaged beverages and cigarettes (both at 16 percent) were the next two most important traffic-generating categories, according to the study.
AlixPartners points out that c-stores need to develop programs for higher volume breakfast, lunch and dinner dayparts, as 40 percent of foodservice shopping occasions were for snacks.
“In the past, ‘convenience’ was the differentiator for c-stores, but there has been a lot of blurring across the channels when it comes to convenience,” noted AlixPartners’ Eric Dzwonczyk, co-head of restaurant, hospitality and leisure practice for the firm. “Despite their gains against fast food and fast casual, c-stores must accept that these channels are not sitting still. Innovative c-stores will be able to stay a step ahead with pre-made foods, healthier menu options and even offering delivery. In fact, this year, we’re seeing many of the middle-tier c-store players also pursuing these innovations.”
Ready-to-Eat Preferred Over Made-to-Order
When asked what types of foodservice foods and beverages they are most interested in purchasing from a convenience store, 57 percent said a grab-and-go/serve-yourself beverage, 40 percent said baked goods, 31 percent said hot dogs, and 30 percent said prepackaged cold sandwiches, salads and fruit trays.
Surprisingly only 29 percent said made-to-order sandwiches, salads, etc. Another 28 percent said pizza, and 27 percent said made-to-order beverages, followed by nachos (cited by 20 percent), soup (7 percent) and sushi (4 percent).
This is good news for many middle-tier convenience store chains, according to Dzwonczyk.
“It’s very capital intensive to invest in made-to-order foodservice. Labor costs are high and there’s a great risk to food safety,” he noted. “And if you’re a retailer with a lot of legacy stores, you may not have the space to install a made-to-order kitchen.”
High-quality, ready-to-eat food is what consumers want, according to the research.
By using commissaries and partnering with suppliers, more middle-tier c-stores can grow their foodservice business, according to Dzwonczyk.
Among millennials, though, made-to-order fares better, with 33 percent of millennial respondents indicating a preference for made-to-order sandwiches, salads, etc., along with 44 percent citing pizza, 36 percent wanting made-to-order beverages, and 8 percent citing sushi.
More Want Better-for You Options
Half of all respondents said better-for-you options are important to them when choosing a convenience store, up from 46.5 percent a year ago. The top three better-for-you attributes cited were: freshly made in-store, local-sourced/fresh ingredients and low-calorie options.
Thirty percent of all respondents described these options as either “very important” or “extremely important.” In comparison, 40 percent of millennials said better-for-you options are very or extremely important to them.
“Better-for-you is the continuation of a megatrend across multiple food service channels,” Dzwonczyk told Convenience Store News. “Ten years ago, it was more of a fad than a trend, but not now.”