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The True Profit of Foodservice

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CHICAGO -- A recent Willard Bishop SuperStudy report found some new advantages of embracing foodservice in convenience stores.

Specifically, the report, is based on an analysis of three different convenience-store retailers operating in geographically dispersed markets across the United States, found:

  • Foodservice categories generate just over 26% of total store unit movement and true profit contribution.
  • Foodservice is covering its fair share of costs. In fact, foodservice generates the same penny profit ($0.32) per unit sold as in-store merchandise.
  • This strong penny profit comes from a significantly lower starting point ($1.32 vs. $3.02 retail price).

Department Performance Per Store

(Merchandise departments vs. foodservice)

  Weekly Dollars   Per Unit   Share of  
Financials Merchandise Foodservice Merchandise Foodservice Merchandise Foodservice
Dollar sales $32,412 $5,147 $3.02 $1.32 86.3% 13.7%
Adjusted gross profits $8,898 $2,656 $0.83 $0.68 77.0% 23.0%
Activity-based costs $5,456 $1,421 $0.51 $0.36 79.3% 20.7%
True profit $3,442 $1,236 $0.32 $0.32 73.6% 26.4%
Unit movement 10,743 3,896 NA NA 73.4% 17.0%
Adjusted gross margin 27.5% 51.6% NA NA NA NA
True profit margins 10.6% 24.0% NA NA NA NA

Kit Dietz of Dietz Consulting presented the results of the Willard Bishop SuperStudy during a CSP's recent Driving Impulse Sales meeting in Chicago.

Willard Bishop SuperStudy
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