If you’re looking for a retailer to model your foodservice program after, consider two venerable operators with radically different approaches: Wawa and QuikTrip.
It’s not the price that beats all for these retail leaders. Rather, it’s their remarkable consistency of execution and customer service; their high-quality value and atmosphere; and their attention to increasingly important side issues, such as portion size and healthy options, that had consumers rating their foodservice offerings as best in class in a recent groundbreaking study on c-store foodservice.
Mike Sherlock, director of foodservice for Wawa Inc., Wawa, Pa., is pleased with not only his company’s ratings, but also those of the other top scorers. “Had you done this study five, 10 years ago, you probably would have seen very different scores,” he says. “The industry as a whole is going in the right direction, and Wawa as well.”
In one of the most comprehensive consumer-driven studies conducted in the channel, foodservice expert Technomic Inc., Chicago, surveyed consumers to identify the most important attributes they consider when buying food at c-stores, and then rank how well 20 separate regional and national c-store brands delivered on these attributes. So the scores come from the very shoppers who patronize these convenience chains.
Technomic gave CSP an exclusive look at its 2012 Consumer C-Store Brand Metrics Study to peel back consumer motives and perceptions, and find out how the industry is doing in the race for share of stomach. We also benchmarked the results against the restaurant industry (see “Rating the Restaurants,” p. 54) to measure how c-stores are competing against quick-service restaurants (QSR) and fast-casual chains.
The retail chains featured in the Technomic study represent a who’s who of the c-store industry, a collection of some of the largest companies, all offering prepared food programs of varying complexity. Of the 20 chains, Wawa and QuikTrip ranked highest in many of the 10 food and beverage attributes—including food taste and flavor, visual appeal and variety—and appeared in the top three nearly every time.
Others represented the next tier of strong foodservice players, including Midwest stalwarts Casey’s General Stores and Kum & Go, the Stripes concept from Susser Petroleum, travel center behemoth Pilot Flying J, and Atlanta-based RaceTrac.
Despite the accolades for the leaders, the overall rating for the c-store industry and performance of some of the nation’s largest chains also showed room for improvement. The c-store channel is delivering on some important attributes, but it is barely passing on too many— especially when compared to QSRs.
That said, among the Technomic study’s most interesting findings is that there is a heavy halo effect emanating from certain chains that transcends the food itself. This discovery is prompting experts to agree that a successful program must be about the food—and the experience.
Some of the study’s other conclusions:
- Big Misses: C-stores overall are falling short on several fundamentals, including food quality and taste/flavor.
- Good Looks: Several retailers, notably Wawa, QuikTrip, RaceTrac and Pilot Flying J, had more than 90% of consumers ranking them “good” and/or “very good” on food visual appeal.
- Uniquely Yours: When it comes to unique food items, c-stores perform modestly, with not one chain hitting 80%. However, four companies—Quik- Trip, Wawa, Stripes and Casey’s General Stores—had scores totaling at least 70%.
The 3,755 consumers in the Technomic shopper panel purchased foodservice from a c-store within two months of the September 2011 report. They were asked to rank the level of importance of approximately 50 attributes, and then how well 20 large c-store chains delivered on these expectations.
The operators were selected by store count, the estimated percentage of units offering prepared food and foodservice share of in-store sales. (One major retailer with a prominent foodservice reputation that is missing from the list is Sheetz Inc. The Altoona, Pa.-based chain just missed the top 20 by these metrics for the study, according to Technomic.)
Within the top 10 most important attributes (see chart on p. 52), c-stores overall are delivering at or above importance levels in only four categories: convenient location, beverage quality, speed of visit and order accuracy. Food quality, taste and flavor, service, cleanliness and value all need work.
When examining the 10 attributes that focus purely on food and beverage (as we did for this article), c-stores overall delivered below expectations on some of the more important attributes such as food quality, taste and flavor, variety and availability of healthy items.
The study confirmed that c-store retailers have mastered dispensed beverages, meeting consumers’ high expectations for this critical product with highly satisfying offers. However, in other areas—quality of kids’ menus, craveable and unique items, and limited-time-only offers—chains were ranked higher than consumer expectations, but those were low to begin with.
A Tale of Two Retailers
Among the 20 chains rated in the Technomic study, Wawa scored highest among consumers for seven of the 10 food-specific attributes measured.
This is no big surprise. Indeed, “the Wawas of the world” is a common refrain for an industry person talking about the pinnacle of c-store foodservice, leaps and bounds ahead of most others. Consumers have their own fanatical love of the chain, whose emphasis is made-to-order hoagies and a recently revamped coffee program. Wawa stores sell more than 195 million cups of coffee and 52 million hoagies per year.
Wawa’s foodservice legacy goes back to when the chain began offering deli meats and cheeses in the 1960s. Along with the iconic hoagie, Wawa has since pioneered programs such as smoothies (launched at the same time as McDonald’s own platform); coffee from airpots instead of glass carafes; and breakfast items such as the Sizzli breakfast sandwich. In April, CEO Howard Stoeckel announced stores will begin offering full-service, barista-style coffee and more items that embrace consumers’ desire for “freshness,” such as a new California Classic Hoagie, with bacon, avocado and cucumber.
Wawa has now turned its focus to the store experience, redesigning its prototype to fit Stoeckel’s vision for his chain: fast casual to go.
“We cleaned up the clutter,” Stoeckel shared with attendees of CSP’s Restaurant Leadership Conference earlier this year. Bright colors, sleek display cabinets, digital menu boards and touch-screen ordering terminals all make for a streamlined, restaurant-like experience.
“Wawa has always been viewed as a c-store, but we now want to be viewed as a restaurant that sells gas. We want to be more like you when we grow up,” Stoeckel told the audience of restaurant franchisors and franchisees at the conference.
With nearly 600 stores in the fold and a new café-style store being unveiled in Florida, Wawa ranked toward the top of the study in both theater and fundamentals, scoring high on customer services and cleanliness. And, like QuikTrip, the company taps its store associates to elevate the food experience.
“They are the greatest brand ambassadors,” says Sherlock.
That manifests not only in granular tools such as employee taste testing and feedback, but also giving them what they need to execute consistently. For Wawa, that has meant investing in new technology such as touch-screen ordering. It is a service to customers, and it streamlines production as orders appear on the screen in an intuitive way for employees to execute.
The same thought is given to new menu platforms, whether it’s a smoothie program or transitioning from glass coffee pots to thermals. “How do we make it as easy as possible for the associates to deliver a high-quality experience on a consistent basis?” Sherlock says.
Meanwhile, QuikTrip’s path to foodservice excellence is a winding one. Less than a decade ago, the Tulsa, Okla.-based company owned one of the best fountain programs in the convenience channel. But its approach to food was driven more by size than quality. Spokesperson Mike Thornbrugh said the chain figured out that wasn’t necessarily the case. (For more on this topic, see p. 59.)
Then in 2006, the company hatched QT Kitchens, a bakery and commissary creation that delivers fresh sandwiches, wraps, salads, fruit and pastries daily. So confident is QuikTrip today that the 600- store operator most recently launched what it calls the Generation Three store, which places foodservice front and center (CSP—May ’12, p. 18).
The store features a broad array of prepared foods, nearly two dozen flavors of smoothies and frozen drinks, more hot dogs and hot food, and an emphasis on take-and-bake food, such as lasagna and pizza.
And while QuikTrip was forced to embrace a speed course in foodservice specifics, the company had the critical intangibles in place: namely, a phenomenal corporate culture and coveted base of die-hard customers.
So it wasn’t surprising that QuikTrip ranked first in the Technomic study for friendly service, staff product and concept knowledge, as well as store cleanliness—in addition to food taste and flavor, portion size for price paid and unique items.
“QuikTrip is leveraging their employees,” says Tim Powell, Technomic’s director of research and consulting. “They understand they have that point of contact with the customer.”
It’s this sense of culture and environment that the Technomic report finds to be at least as important as the food quality itself in building a dynamic foodservice program.
“Customers have to trust that the employees are top-notch,” says Thornbrugh. “You have all these great ideas, but without people, stores and cleanliness, you can forget it.”
And despite the strong ranking, the company is not ready to rest on its laurels. “Selfishly, we want to be No. 1 in everything,” says Thornbrugh. “We freely admit this is still new for us. [QuikTrip CEO Chet Cadieux] has said many times it’s taken us 20 to 30 years to get to be good in selling gasoline and other merchandise. We’re going to be patient, continue to learn the business and continue to get better.”
Consistency Is Key
Despite their different paths to foodservice excellence, what Wawa and Quik- Trip both have ultimately achieved is consistency in execution—a quality that is built into the DNA of their foodservice programs, which creates a brand promise to the customer.
Indeed, a lack of consistency from store to store is often what separates most c-stores from QSRs. Franchise models, stores that were folded in via acquisition and a general backpedaling to get into the foodservice game all lead to a collection of stores at which a customer doesn’t know what to expect from visit to visit.
“Everyone uses the McDonald’s model,” says Powell of Technomic, citing the fast-food behemoth’s reputation for consistent—if not consistently excellent— food, despite its franchise base. “Wherever you buy that hamburger, even if it’s bad, it’s going to be consistently bad. You know what you’re going to get.”
Consumers’ uncertainty about c-stores, meanwhile, bears out even among the most prominent chains. The Technomic report shows some national brands scoring in the low 70s for food quality, flavor and taste, variety and visual appeal. The number drops even lower—mostly 50s and 60s—for less significant categories such as appeal of limited-time-only offers (LTO) and availability of healthy foods.
“When you’re a little more decentralized and you have franchised stores, it’s more difficult to keep it consistent,” says Powell. “That’s just inherent in the segment right now, the inconsistency.”
For San Antonio-based Valero, it can be challenging to correlate execution with sales projections, says Geoff DeCastro, senior category manager of foodservice. This is doubly so because Valero also does not have the same food offer available at all sites.
Of its 1,000 Valero Corner Store locations, only 300 stores offer the full program—or “real food,” as DeCastro describes it—which varies from straight grab and go, such as fresh hot dogs and other roller-grill products, to breakfast tacos made with homemade tortillas, fried chicken and chicken sandwiches.
“We have a good field organization, but you never really know 100% that the execution is there or not,” says DeCastro. Valero area managers each visit 10 stores monthly to evaluate execution of the foodservice offer, while zone managers and Ecosure perform quarterly checks.
For QuikTrip, consistency comes with not only offering the same retail offer at each store, but also vertical integration. The chain runs its own commissaries and distribution, ensuring consistent product and deliveries. “I think we’ve been superb at it,” says Thornbrugh. “There have been a couple of times where you’ve had ice and snowstorms. QuikTrip—not just for a c-store but any retail outlet—was one of the few that was still able to get product out for people to purchase. But our folks deliver regardless of the weather.”
Joe Chiovera, vice president of foodservice for Alimentation Couche-Tard’s Circle K Stores, focuses on what he calls “functional intent.” Start with what you want out of a product or program, such as extended shelf life. Through that lens, answer questions of storage, distribution and operations to find the product that meets your goal.
“Not training your people properly, along with a complex conceptual model—you put that with our high turnover ratio in c-stores, and it’s a recipe for disaster,” he says.
Introspection Time
With their eyes on the goal, c-store retailers are attempting to transform consumers’ perception about the quality of food and the experience in a c-store. But preliminary figures from the NACS State of the Industry Report of 2011 Data shined a spotlight on a glaring disparity.
When it comes to foodservice, top-quartile players such as QuikTrip and Wawa generate two to four times the sales as that of the remaining 75%. Industry folks therefore suggest that the top performers are raising the rest of the industry.
Can the opposite be said when looking at foodservice from a consumer perspective? Are the lower performers bringing down the rest of the channel? Powell of Technomic says no. “I don’t think customers think like that,” he says. “Consumers look at wherever that option is within the radius of where they want to travel and what they’re in the mood for,” whether it’s a Kum & Go, a Publix or a CVS.
For Powell, the issue is matter of fact: “If you’re a c-store, you have to perform as a restaurant and execute on the basics. That way, you become an option for them.”
Rating the Restaurants
Leaders in c-store foodservice will tell you they don’t line their programs up against fellow convenience retailers. It’s the quick-service restaurants (QSR) that keep a fire under their seats.
“If we’re just trying to challenge c-stores, that’s pretty limited,” says Mike Thornbrugh, spokesperson for QuikTrip Corp., Tulsa, Okla. “We’re going after the food industry in its entirety.”
For the Technomic study, consumers’ top priorities for restaurants were similar to those of c-stores. “Everybody across the board wants clean restaurants and high-quality food,” says Sara Monnette, Technomic’s director of consumer research. From there, consumers put more emphasis on speed, convenience and accuracy of order at restaurants.
Comparing performance in those top attributes, restaurants performed better than c-stores. QSRs received a 90% performance ranking for both quality and flavor/taste. Fast casual ranked 94% for each, beating out midscale (92% for quality, 91% for taste/ flavor) and casual dining (93% each).
C-stores, meanwhile, had a composite score of 85% for food quality and taste/flavor—a significant gap compared to its restaurant counterparts.
“These numbers will increase, but there is still a perception that to get high-quality food you might have to get that from a restaurant today,” says Monnette.
One bright spot for c-stores is beverages. Ninety percent of survey respondents said beverage quality was good or very good, and they gave retailers a composite score of 91%.
Monnette was surprised by the similar level of importance customers place on atmosphere at both restaurants and c-stores.
“I would have expected that atmosphere is more important at fast food because even though a lot of the occasions are to-go or through the drive-thru, a lot of people are still dining inside the restaurant,” she says.
Quality, Flavor and Taste
According to Sara Monnette, director of consumer research for Technomic, the gap between importance and delivery is wider than desired here, especially compared with how the QSR and fast-casual segments scored on delivery (90% for QSRs and 94% for fast casual).
Where do you go from here if you’re Wawa, with very strong scores? Focus on the intangibles. “We’re trying to look at the whole shopper experience,” says Mike Sherlock, director of foodservice for Wawa. That includes digital signage and sprucing up the foodservice area to eliminate clutter and provide more interaction between customers and associates.
Kum & Go L.C., West Des Moines, Iowa, received a strong score of 90% for both food quality and taste and flavor, despite having disparate store types. The new concept stores [CSP— Jan. ’12, p. 58] are actually intended to address many of those experiential attributes—specifically service and consistent execution. Until then, a halo effect may be helping boost their numbers.
For QuikTrip, with consistency comes quality. “It’s one of the reasons why QuikTrip wanted to have total control over everything,” says spokesman Mike Thornbrugh. “It would be our workers, our ideas, the way we transported, the way we merchandised it.”
QuikTrip’s Generation Three stores offer a wider selection of prepared foods and beverages, including 22 flavors of smoothies and frozen drinks, and an emphasis on take-and-bake food, such as lasagna and pizza.
Visual Appeal and Portion Size
While Valero Corner Stores did not rank in the top 10 of brands by visual appeal, it has made a real effort to address this attribute, which it sees as a fundamental reason why c-stores are not more widely embraced as a foodservice option.
“Take the hot dog as your starting point; most c-stores will serve product that they buy packaged, and they just heat it up and put it in a warmer,” says Geoff DeCastro, senior category manager of foodservice. “Until customers can see the product made in the store and understand that it’s fresh, it’s going to be a slow process.”
Even after this step has been taken, many customers may still assume that the retailer brought the food in from the outside, says DeCastro: “Have your oven out front, create some theater behind the food prep so customers can see you making it, see it coming out of the oven, and then they can start to really trust you a lot more.”
Valero Corner Stores’ foodservice program is currently in between the commissary stage and made to order. To help bridge customers’ assumption about a lack of freshness, the chain makes a point of removing food from its packaging and displaying it in a fixture. “Our program is generally grab and go,” DeCastro says. “If you walk up to a case, you can see hot, glistening kolaches, and not in bags and packaging.”
Meanwhile, c-stores ranked fairly well in portion size, with 82% of consumers saying it’s good or very good. And yet just 69% of consumers said portion size was important in the first place. Turns out supersizing may be getting downsized.
“We thought everything had to be big—huge slices of bread, meat, etc.,” says QuikTrip’s Mike Thornbrugh. “We found out that’s not necessarily accurate. People wanted a competitive price and a good-quality food item.”
Appeal of LTOs, Seasonal Offers, Craveable Items and Unique Items
The levels of importance here are actually quite low, so it’s in a retailer’s best interest to focus on the more critical attributes before tackling these types of factors.
The low importance of such items is “not terribly surprising” to Mike Sherlock of Wawa. “Many consumers are routine-oriented, and LTOs need to simultaneously deliver on the appeal of the offer (variety, taste, etc.), as well as value perception to change normal purchasing habits,” he says.
And yet retailers shouldn’t ignore these attributes altogether. As a program continues to evolve, consumer expectations will evolve as well.
“If you’re not used to seeing healthy options or unique, higher-quality food at a convenience store, you might not expect it or find it to be important because that’s not why you’re going there. But then as you start to see it, your perceptions and expectations change,” says Sara Monnette of Technomic.
Joe Chiovera of Circle K points to the power of LTOs to generate buzz, best exemplified by McDonald’s McRib. “You create this desire by taking it away from them and not being apologetic about it,” he says. “[You could say], ‘It’s working now so let’s keep it on the menu,’ but it’s going to lose its sizzle because it’s not a main item. Every item you roll out cannot be a signature item.”
Valero Corner Stores has embraced LTOs, which explains its No. 5 ranking in this area. The chain charts out its programs on a three-month calendar and promotes the LTOs with outside signage.
Each LTO offer serves a different purpose. For example, Valero may sell a fish sandwich during Lent to maintain sales, while introducing an LTO bakery item to spike sales another month. It is also a way to test new options to further grow the lunch day-part, a big focus for Valero Corner Stores, which is testing an LTO personal-size pizza for three months to see how it performs as a lunch option.
Variety of Offer, Availability of Healthy Items, and Quality of Kids Meals
Variety is important or very important to 85% of consumers, but Joe Chiovera of Alimentation Couche- Tard’s Circle K warns against going overboard with products.
“Variety is the spice of life, but not when you’re starting out in foodservice,” he says. “Throw your pitch down the center of the plate and get it right. Build the foundation and grow from there; it’s not like you have to get there tomorrow. You have to go station to station in this business. Otherwise you’ll never be able to sustain any growth.”
Meanwhile, the paradox of consumers talking thin and eating fat is waning, albeit slowly and dependent upon the market.
Mike Thornburgh of QuikTrip has noticed the increased interest, and many of its recent rollouts are veering toward more healthfulness. Wawa is likewise watching healthy trends, while being careful to offer a balance.
“We’ve found the importance within our offer is variety of options for our customers—fruits, salads, etc.—as well as more indulgent offers to satisfy their need state for that particular experience,” says Wawa’s Mike Sherlock.
While Valero Corner Stores has no formal healthy program, it has made an effort to offer products for different lifestyles. One that has hit a nerve is sugar-free cappuccino. “We got a lot of positive response, almost more than anything we’ve ever done, when we put sugar-free options in the stores,” says Geoff DeCastro.
Interestingly, while Valero Corner Stores ranked tops in kids’ meals, the chain doesn’t offer an official kids menu. DeCastro suspects that customers are reacting to its ICEE frozen-beverage program, which has grown in popularity over the past two years from 15% of cold dispensed beverage sales to 35% of sales in the summer. He credits not only the ICEE’s $1 promotional price point during the summer, but also the availability of regional offers for the program’s growth. For example, in Texas, Valero Corner Stores have found success with Big Red flavored ICEEs, while in the South, Mountain Dew Blue Shock is popular.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.