Who Is Winning the Battle of C-stores vs. QSRs?

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Who Is Winning the Battle of C-stores vs. QSRs?

By Don Longo, Convenience Store News - 04/25/2014

NATIONAL REPORT -- Convenience stores are facing all kinds of new competition in the foodservice category, but in their long-standing battle with quick-service restaurants (QSRs), new research shows that c-stores are scoring some key victories.

Convenience stores are successfully taking business away from quick-service restaurants and coffee shops, according to consumer data provided exclusively to Convenience Store News by Technomic Inc., the fact-based research and consulting firm based in Chicago that focuses solely on the foodservice food and beverage industry.

The firm compiled a special Convenience Store Insights Report for CSNews, providing the latest information on what's important to consumers when purchasing convenience foodservice, which c-store chains are winning on the key attributes, and how the leading c-store chains fare against the leading QSR chains when pitted head to head.

The Convenience Store Insights Report combines data from Technomic’s Convenience Store Insights Group Marketbrief, which is based on overnight surveys of 500 c-store customers, and data from Technomic's Convenience Store Consumer Brand Metrics, an online survey panel of 4,080 c-store shoppers who were asked to rate their experience at convenience stores they visited in the past two months.

More consumers are choosing c-store foodservice at the expense of restaurants. In a Marketbrief survey conducted by Technomic in November, 20 percent of consumers said they have been purchasing c-store foodservice more often in the past month. Of those, 57 percent of respondents said they were visiting fast-food restaurants less often due to their increasing purchases of foodservice at c-stores and 41 percent said the same thing about coffee/beverage shops.

Only 38 percent said they are visiting fast-casual restaurants less often due to c-store visits, but that is an 8-percent increase from the previous year.

Going Head to Head

Based on its Consumer Brand Metrics analysis, Technomic identified four convenience store chains that are “winning” with consumers and beating the QSR competition. The "winning" chains are: Pennsylvania-based Wawa Inc. and Sheetz Inc., Oklahoma-based QuikTrip Corp., and Texas-based Stripes operated by Susser Holdings Corp.

When pitted directly against five leading QSRs – McDonald’s, Subway, Starbucks, Wendy’s and Burger King -- these four convenience store chains and some others fared surprisingly well.

Respondents to the Consumer Brand Metrics survey were asked to rate their last experience at a restaurant (within the past 30 days) or a convenience store (within the past two months). On the issue of food quality, Wawa tied with Subway for the top spot, both garnering "good" or "very good" ratings from 96 percent of respondents. Wendy’s was next at 91 percent, followed by QuikTrip at 90 percent and then RaceTrac/RaceWay, Sheetz, Stripes and Starbucks each at 88 percent. McDonald’s had the lowest rating in food quality at 81 percent.

In regards to the availability of healthy options, consumers gave Subway the strongest rating in this area, but c-stores still hold their own on the healthy meter. Subway led the way with 91 percent, followed by Wawa at 74 percent, Wendy’s at 73 percent, and Sheetz at 71 percent.

Wawa topped all c-store and restaurant chains on the craveability scale, with 78 percent of consumers agreeing that the Pennsylvania-based convenience store chain was good or very good for “craveable items I can only get at this convenience store/restaurant.” QuikTrip tied Wendy’s for second place at 76 percent, followed by Starbucks and Sheetz at 75 percent.

And finally, regarding the ability to provide value through high-quality menu items, the champ this time was Subway at 87 percent, followed by Wawa at 85 percent, Wendy’s at 82 percent and Sheetz at 80 percent. Several c-store chains, including QuikTrip, Stripes, APlus Convenience, Kwik Trip and Casey’s General Stores, all did better than McDonald’s on this measure.

The common thread among "winning" convenience store chains is that they think and act like a foodservice operator, said Donna Hood Crecca, senior director of the Adult Beverage Resource Group and the Convenience Store Insights Group at Technomic. From operations to sourcing to training to marketing, they put food first. They also have strong foodservice cultures built into their organizations.

"It's become immensely competitive in the last year or so," Crecca said of the foodservice marketplace. "There's a slowing overall in the foodservice industry and that's set us up for a take share environment. If you want to grow, you have to take share from someone else."

If convenience store retailers want to be triumphant, they must "put the periscope up and see what is happening in [their] market outside the c-store segment," she stressed.

Editor's note: For more findings from the Convenience Store Insights Report provided exclusively to CSNews by Technomic, look in the May issue of Convenience Store News.