OAKBROOK TERRACE, Ill. -- When it comes to foodservice offerings at convenience stores, retail strategy, merchandising, pricing and positioning become even more important in stretching potential profits. Hot, grab-and-go items such as breakfast sandwiches and pizza slices simply won’t sell if they’re hiding at the back corner of the store, priced too high or worse—if they’re stale.
CSP caught up with Dana Evaro, vice president of marketing for Land Mark Products and Brian Brehmer, owner of Ralphie’s Victory Lane in Elk River, Minn., for their take on the best ways to merchandise these value-added items.
#1. Position Properly
As foodservice remains the No. 1 most profitable category in c-stores, maximizing the visibility—and dedicating enough space—for these products is crucial, according to Evaro. “People need immediate access to these products, and foodservice should be a destination within the store,” he said.
For most operators, that destination is a reliable warmer, along with some substantial branding and signage drawing attention to the area.
At Ralphie’s Victory Lane, customers can spot a variety of hot, prepackaged breakfast sandwiches, as well as pizza slices, chicken wings, potato wedges and other foodservice products, in the warmer right as they walk in, Brehmer said.
“We position these items to be very visible and on the path to all other parts of the store. Everyone has to go right by the warmer to get their beverage or other items,” said Brehmer. Though Ralphie’s positions a microwave next to the cooler for customers looking to heat up their own food, the warmer still sells three times more product.
“The reason is speed of service,” said Brehmer, noting that he also positions coffee and other beverages, as well as the deli case, near the warmer to further boost the convenience factor—and sales. This helps Ralphie’s not only compete against the c-store down the block, but also against the major QSR across the street.
#2. Quality Control
However, positioning will do nothing for foodservice sales if the quality’s not there.
“Everything has to be fresh, warm and not held too long in the warmers,” said Evaro. “That’s a big challenge for many operators, because they’re looking to minimize waste, which is completely understandable.”
The key to improving quality and reducing waste is studying daily and weekly sales to determine not only how many items to put out overall, but also how many of each specific item to stock. While Land Mark Products will assist operators with those determinations, a good first step is to put out a large amount of food at first to figure out the average maximum sales and then scale back from that point, according to Evaro.
In the same way, Brehmer studies the previous week’s sales to determine how many items to put in the warmer, and he trains his staff to focus on peak times, including the morning dash and the lunch rush, which runs from about 11 a.m. to 1 p.m. During those hours, each time a product sells, a new one should be thawed and set out in its place.
To maintain waste, Brehmer will sell the leftovers at discounted prices; he marks them down a half-hour before they expire. Even the leftovers haven’t gone stale, and that sends a message of quality to consumers.
Offering hot, fresh food can be as simple as that using quality, prepackaged convenience foods, a warmer and some basic employee training, according to Evaro. “These programs offer high profit-margin potential within a small footprint and no need for a hood or major equipment,” he said.
#3. Variety Sells
Next to quality, variety remains paramount for boosting sales. “Are you putting enough food in your warmer?” asked Evaro. “If not, it’s not visible to the customer.”
Brehmer agreed. “Sales from my deli and warmer case have doubled in just the last year, even though my customer count has not doubled,” he said. “People are looking for more of these items, and are starting to expect that variety and quality.”
Sampling can also help introduce customers to new products. Evaro recommends sampling each month, especially after introducing new products.
#4. Point-On Pricing
As a general rule, Brehmer looks to make a 50% profit margin on his convenience foodservice items. That’s resulted in sandwiches being priced at $2.99, unless the product is bundled with a beverage.
“I always find ways to add a fountain drink or coffee or run other specials from time to time,” said Brehmer. This can boost sales during slow periods and bring customers back in a competitive marketplace.
Likewise, Evaro often recommends operators run “2-for” strategies, depending on the price point. For pizza, that usually means two slices for $4, while hot breakfast sandwiches might be offered two for $3 or $4.
As pizza in particular becomes more of a snack item or late-night meal, keeping prices as low as possible or offering deals can help boost sales, especially during off-peak hours, Evaro said.
#5. Market to Merchandise
Of course, ample in-store signage helps direct customers to the warmers, but Brehmer also posts signage at the pump.
Evaro said his company recently supplied a c-store customer with photography of Land Mark’s Day N’ Night Bites products, which the operator used to create huge, door-size signs welcoming customers into the store.
Some operators build pizza slices, breakfast sandwiches and other convenience foodservice items into their loyalty programs, as well. This is a huge incentive for customers to purchase something to eat after they fuel up their cars.
“Offering hot food is the way of the future in convenience,” said Brehmer. The trick is to offer food that’s high in quality, value and accessibility.
This post is sponsored by Land Mark Products