One out of every five convenience stores is located in the Northeast. And when you consider the food programs at some of the top players in this region (e.g., Wawa, Sheetz, QuickChek), it’s no surprise that the Northeast sweeps the nation in terms of foodservice sales.
That said, the Midwest, where 15% of c-stores are located, saw the most year-over-year growth in foodservice despite reaping far less in sales.
“Two years ago, we were talking about the lift in foodservice in terms of sales was being driven by … dispensed beverages. Now, we’ve changed that tune,” said Leroy Kelsey, director of industry analytics for NACS. “With more [money] in their pockets, it looks like shoppers are going after food.”
Read on to learn more about foodservice in the Northeast and Midwest, and find insights on manager turnover, fuel consumption and more.
NORTHEAST
Foodservice Sales
At more than $62,000 per store per month, foodservice sales in the Northeast are almost double the national average. “Foodservice as an area is a high-margin opportunity,” said Jim Smith, senior vice president and CFO of QuickChek Corp. “Everybody is stepping up their game.” And that includes QuickChek. The Whitehouse Station, N.J.-based chain is expanding its menu and creating more daytime opportunities for customers to buy prepared foods, Smith said. QuickChek also has introduced handcrafted beverages, frozen lattes and smoothies.
| Prepared foods | National | PCYA* | Northeast | Northeast Index | PCYA* |
|---|---|---|---|---|---|
| Prepared food | $29,377 | 8.5% | $58,093 | 198 | 12.7% |
| Commissary | $3,964 | 13.9% | $5,214 | 132 | 16.5% |
| Hot dispensed | $6,121 | 3.5% | $15,238 | 249 | 3.2% |
| Cold dispensed | $4,794 | 11.6% | $6,262 | 131 | 16.4% |
| Frozen dispensed | $683 | (2.6%) | $488 | 71 | 13.3% |
| Total foodservice | $32,890 | 9.6% | $62,143 | 189 | 12.0% |
Source: CSX LLC | * Percent change from a year ago
Top 10 Merchandise Categories in Gross-Profit Dollars
Packaged beverages saw the most growth (28.1%) of the top 10 categories in the Northeast. “We need to call out all the work that’s gone into special lighting on the cold vault [as well as] directional signs. What I’ve seen in the last 10 years across the industry is a lot more focus on that space,” said Jay Ard, vice president of national sales for The Coca-Cola Co.’s convenience channel.
| Per store per month | National | PCYA* | Northeast | Northeast index | PCYA* |
|---|---|---|---|---|---|
| Cigarettes | $6,740 | 0.5% | $9,706 | 134 | (0.7%) |
| Packaged beverages | $9,651 | 8.4% | $13,230 | 137 | 28.1% |
| Salty snacks | $2,799 | 9.9% | $6,324 | 226 | 9.4% |
| Beer | $2,900 | 3.5% | $3,247 | 112 | 11.7% |
| Alternative snacks | $1,581 | 12.1% | $5,105 | 323 | 3.1% |
| OTP | $2,124 | 4.3% | $2,312 | 109 | 13.1% |
| Sweet snacks | $1,087 | 8.1% | $1,953 | 180 | 3.6% |
| Candy | $2,169 | 2.4% | $2,559 | 118 | 8.6% |
| Ice cream | $1,019 | 5.8% | $2,333 | 229 | (0.4%) |
| Milk | $921 | 10.2% | $1,784 | 194 | 11.5% |
| Total merchandise | $33,682 | 6.3% | $44,190 | 131 | 6.5% |
Source: CSX LLC | * Percent change from a year ago
Continued: Midwest
MIDWEST
Foodservice Sales
“Despite the fact that the Midwest is a smaller piece of business, it’s actually growing faster than the Northeast in terms of foodservice sales,” Kelsey said. Foodservice sales in the Midwest grew 12.5% vs. 12.0% in the Northeast, where foodservice sales totaled $62,143.
| Prepared foods | National | PCYA* | Midwest | Midwest index | PCYA* |
|---|---|---|---|---|---|
| Prepared food | $29,377 | 8.5% | $23,190 | 79 | 14.2% |
| Commissary | $3,964 | 13.9% | $4,271 | 108 | 11.3% |
| Hot dispensed | $6,121 | 3.5% | $4,299 | 70 | 7.0% |
| Cold dispensed | $4,794 | 11.6% | $4,495 | 94 | 6.6% |
| Frozen dispensed | $683 | (2.6%) | $491 | 72 | 11.1% |
| Total foodservice | $32,890 | 9.6% | $24,719 | 75 | 12.5% |
Top 10 Merchandise Categories in Sales
“Some of the staples that we don’t typically see in the top—like perishable grocery , like milk, like general merchandise—are rising to the top because of those rural [Midwest] sites,” Kelsey said.
| Per store per month | National | PCYA* | Midwest | Midwest index | PCYA* |
|---|---|---|---|---|---|
| Cigarettes | $50,357 | 3.4% | $51,505 | 102 | 4.5% |
| Packaged beverages | $23,877 | 7.5% | $21,753 | 91 | 13.0% |
| Beer | $14,838 | 3.6% | $15,369 | 104 | 5.9% |
| OTP | $7,547 | 6.8% | $7,256 | 96 | 6.3% |
| Perishable grocery | $1,618 | 24.0% | $6,322 | 391 | 23.2% |
| Salty snacks | $7,155 | 0.8% | $5,392 | 75 | 7.1% |
| Candy | $4,552 | 0.6% | $4,715 | 104 | 4.7% |
| Milk | $3,043 | (4.0%) | $4,591 | 151 | (7.5%) |
| General merchandise | $2,449 | 8.5% | $3,839 | 157 | 12.0% |
| Sweet snacks | $2,889 | 4.0% | $3,035 | 105 | 6.6% |
| Total merchandise | $124,001 | 4.8% | $125,648 | 101 | 6.0% |
Key Productivity Measures
In terms of manager turnover , the Midwest indexed slightly higher (27.1%) than the national average (21.2%) in 2015. However, when you look at year-over-year change, manager turnover in the Midwest was 51.4%. “That costs a lot of money,” said Glenn Plumby, senior vice president of operations for Enon, Ohio-based Speedway.
Between the rising cost of wages and an unemployment rate of less than 5%, there is “a lot of opportunity for those highly skilled workers that have been with us for a number of years. The key is … retention. That’s what we all have to work toward to drive turnover down, to drive cost down,” Plumby said.
| 2015 | National | PCYA* | Midwest | PCYA* |
|---|---|---|---|---|
| Motor fuels gallons sold | 147,508 | 0.7% | 139,868 | 3.8% |
| Merchandise sales | $124,001 | 4.8% | $125,648 | 6.0% |
| Foodservice sales | $32,890 | 9.6% | $24,719 | 12.5% |
| Store operating profit | $24,047 | 0.5% | $19,089 | 23.6% |
| Break-even CPG | 9.75 | (8.4%) | 13.05 | (8.9%) |
| EBITDA | $23,757 | 3.9% | $19,484 | 23.7% |
| Nonmanager turnover (annual) | 86.5% | 12.2% | 71.1% | 0.7% |
| Manager turnover (annual) | 21.2% | (5.7%) | 27.1% | 51.4% |
| Wages as a percent of gross-profit dollars | 25.0% | 4.4% | 25.1% | 0.7% |
| In-store gross-profit dollars per labor hour | $30.21 | 4.1% | $24.54 | 5.9% |
Source: CSX LLC | * Percent change from a year ago
Continued: Southeast
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