Be Consistent, Be Different
Plus eight more rules for delivering on foodservice expectations
CHICAGO -- On the heels of an announcement that convenience store same-firm foodservice sales are up 10.8% and gross profit up 7.5%, an education session at the NACS State of the Industry Summit in Chicago shared the steps needed for retailers to continue that momentum.
Jerry Weiner, vice president of foodservice for Rutter's Farm Stores, York, Pa., emphasized consistent execution. Intriguing menu items, captivating marketing or state-of-the-art equipment won't matter if you can't deliver a consistent product every time.
"That's the difference between success and failure," he said.
Tim Powell, director of c-store programs for Technomic, Chicago, challenged attendees to differentiate themselves from the pack by delivering beyond the basics. Once service, food quality and store appearance are mastered, he said, retailers must focus on restaurant-caliber points of differentiation such as menu desirability, hospitality, lifestyle integration and concept essence.
Weiner concurred: "It's not just location, location, location, but location, location, location and differentiation."
Powell and Weiner explored a handful of other crucial ingredients for delivering on consumer expectations.
Consider Dayparts … or Lack Thereof. "It's not when you eat; it's what you eat," said Powell. Consumers are increasingly eating upward of six smaller meals throughout the day, and c-stores are well positioned to cater to a snacking society. According to Technomic, the majority of consumers (64%) already choose c-stores as the ideal destination for a snack.
Deliver Value Beyond Price. "Don't get into a price war," Powell warned. Price is part of value, but it also means service, cleanliness, variety and experience.
And there are plenty of places to start: According to a recent Technomic poll, consumers believe the biggest issues c-stores need to improve upon are higher quality food, better overall value and healthier options.
Customization Is King. Thanks to restaurant concepts such as Chipotle, consumers are accustomed to having some control over their meals. Weiner has found success allowing guests to customize meals via touch-screen ordering, and he has seen many of them building complete meals out of a combination of smaller appetizers and snacks.
Bet on Breakfast. For retailers who don't yet have a strong foodservice program, Weiner recommends starting with breakfast. The food costs are strong, it's easy to compete against QSRs on quality, and c-stores already have strong morning traffic.
Private Label as Differentiator. The consumer's perception of private label has evolved in recent years from a cheap alternative of questionable quality to a high-quality, branded offer with strong value. In fact, said Powell, 30% of consumers prefer store brands at c-stores.
Food Safety, the Unsung Hero. "If this isn't what keeps you up at night, it should be," said Weiner. At the minimum, he recommends, implement a state-certified ServSafe program. From there, train and certify all management and institute QA inspections.
Run It Like a Restaurant. "You are a business within a business, and you have to think like a restaurant," said Weiner. That means understanding food costs, labor needs (which will be higher than retail) and waste.
"Zero spoilage means lost sales," said Weiner, so allow for waste, track it and factor it into food costs.
As a baseline, Weiner recommends targeting labor costs at 20% to 30% and spoils at 8% to 15%. Those numbers will greatly depend on whether you're producing food on site (higher labor, lower waste) or at a commissary (lower labor, higher waste).
Be Patient. "Getting there is a process and it could take several years," said Weiner, who has challenged himself to master the dinner day-part in five years. "A lot of that is how long it is going to take your customers to think of you as a foodservice destination."