Convenience-store food: faster, fresher, more value

Articles
December 07, 2009

Convenience-store food: faster, fresher, more value

When National Lampoon vacationer Clark Griswold exclaimed on celluloid, “I’m so hungry, I could eat a sandwich from a gas station,” he echoed what pretty much everyone felt about food from the convenience store, with good reason.

When National Lampoon vacationer Clark Griswold exclaimed on celluloid, “I’m so hungry, I could eat a sandwich from a gas station,” he echoed what pretty much everyone felt about food from the convenience store, with good reason.

Today, the nation’s 145,000 compact outlets that average 3,000 square feet are “more about destination than desperation,” Jeff Lenard, vice president-communications, National Association of Convenience Stores, told the Facts, Figures & The Futurenewsletter. That statement embodies improvements in quality, value (multi-packs), freshness and speed.

Food-on-the-go is the essence of convenience-store consumption. Speed carries increasing value: the typical shopping experience lasts three to four minutes, and most food bought in these outlets is eaten within five minutes. The progression of ready-to-eat c-store food, outlined by Lenard, demonstrates this: Shoppers used to find food on the shelf and heat it in the store’s microwave. Then made-to-order foods grew in popularity. Now grab-and-go (such as commissary food, parfaits, and pre-made sandwiches that people feel confident are fresh) is front and center. More fresh fruits and vegetables are appearing on c-store shelves as well.

Operators such as Sheetz and WaWa have used grab-and-go concepts to attract more women shoppers to their stores. “First they established trust in their foodservice quality, and then they extended to grab-and-go,” said Lenard. “Once people trust you, they’ll follow you, as long as you stay committed to freshness. If you say you’ll re-brew coffee every 20 minutes, and you don’t, you’ll be lost.”

The interior layouts of convenience stores add to their destination feel. Operators have studied scan data and how people shop, and make sure companion items are within sight and easy reach. For example, single-serves of popular energy drinks pair well with sandwiches, while six-packs go well with large bags of chips. Store formats minimize right angles in order to maximize product visibility and shopper flow.

Insights like these will continue to drive the refinements of c-stores—which count increasingly on food sales to offset other aspects of their performance. For instance, 75% of store revenue comes from gasoline, but just 32% of gross profit. Another 8% of sales come from tobacco products.  Neither gas nor tobacco is seen as a growth opportunity, given new energy technologies on the rise, and increasing restrictions on cigarette sales. 

However c-store operators reinvent themselves for the future, food will be in the forefront. The Tesco-style formats haven’t yet prompted a specific uniform industry response, said Lenard, “but anytime someone of that stature gets in the game, you have to see if your offer is what you want for tomorrow.”

Meanwhile, some other food nuggets:

  • Packaged beverages (including carbonated soft drinks, bottled water, energy drinks and juices, but not beer or milk) deliver the most gross profit to c-stores today.
  • People are eating more meals in their cars. Their cupholders multitask—they hold soup-in-a-cup, fruit and yogurt cups, and cans of chips as well as beverages.
     

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