CHICAGO -- Despite channel disruption, a tight labor market, mounting competitive forces, looming menu regulations and myriad operational challenges, convenience stores have plenty of reasons to be thankful for the current state of the foodservice category.
An emerging customer base, menu innovation and shifting consumer behaviors continue to strengthen the c-store segment and make its locations desirable destinations for food and drink.
Here are five things—along with the latest menu, consumer and industry data from Technomic—that illustrate the solid performance of the c-store foodservice category in 2017, and point to good things for the year ahead ...
1. Foodservice visitation is way up
When it comes to getting customers in the door for food, retailers can rejoice. According to Technomic’s C-Store MarketBrief, powered by Ignite, 44% of c-store foodservice consumers say they’re visiting c-stores more often for prepared foods—specifically hot meals and snacks—than they were just one year ago. Consumers may have tons of food and beverage locations to choose from, but they're increasingly choosing c-stores for foodservice.
2. Snacking is a big opportunity
As traditional dayparts blur into flexible dining patterns, snacking represents a major opportunity to redevelop the menu and win with a younger consumer base (more on that later). Witness York, Pa.-based Rutter’s Farms Stores' use of proprietary packaging to expand its selection of snacks for grab-and-go this year, or Irving, Texas-based 7-Eleven’s current "mix and match" promotion that allows guests to bundle three signature hot snacks for $3.
Retailers that are thoughtful about how to pull customers into the store for hot snacks—and give them a greater variety of hot foods on the go, and more ways to bundle snacks into a meal if they choose—are in a better position to gain loyalty from among the 76% of c-store foodservice consumers who say they frequently visit c-stores just for snacks.
3. The Gen Z consumer is super loyal
Nearly seven out of 10 millennials (67%) say that c-stores are just as capable as restaurants to provide high-quality food and drink. Now the up-and-coming generation behind them—the Generation Z base (consumers in their teens to early 20s)—is not only echoing that sentiment but apparently advancing this improved perception, and rewarding c-stores with frequent visits.
A whopping 91% of Gen Z consumers surveyed by Technomic report frequent visitation to c-stores specifically for snacking occasions. To lure them in any time of day, c-stores can entice them with novelty limited-time offers (LTOs), innovative beverages and a technology component that makes ordering and payment easier.
4. The roller grill is booming
According to Technomic's MenuMonitor data between Q3 2016 and Q3 2017, c-stores have increased the number of roller-grill items on the menu by 40% year over year.
While fresh-food programs and made-to-order initiatives are the next wave in c-store foodservice, it’s still apparent that many c-stores are opting to grow where they’re already planted. The strategy is a sound one for retailers, as a wider variety of breakfast and snack options have boosted the stalwart roller-grill platform across dayparts.
5. The forecast for 2018 looks promising
Technomic predicts that sales performance of convenience-store food and beverage will continue to be strong heading into 2018. According to a recent update to Technomic's U.S. foodservice industry forecast, the c-store segment is on pace to eclipse some restaurant segments in terms of sales growth and will achieve an estimated nominal sales-growth percentage of 3.8%.