Size does matter. Store size, as well as the size of the chain, affects foodservice performance. So before addressing Taste of Money, an examination of the chains making the most money off foodservice is in order.
Stores that fall into higher-square-footage specs are the fastest growing within the Top 202, with those bigger than 4,000 square feet adding nearly 12% more units in 2016 vs. 2015. Compare that to the average unit growth rate of 6.8% among the Top 202 overall. Now layer foodservice revenues on top of that, and larger stores are generating considerably more foodservice revenue per unit and more revenue per square foot. But this 4,000-square-foot-and-up group is a small one, making up 11% of the total Top 202.
Another group of stores, those in the 2,000- to 4,000-square-foot range, is more the norm. Ninety-four companies strong, the Taste of Money cluster represents the most stores (32,512) when segmenting the Top 202 by foodservice sales and square footage, with an average store size of 3,200 square feet.
These stores often have been remodeled to make room for more foodservice, pulling space from other less-profitable categories. And it’s enough room to create a viable offering. On the basis of foodservice revenue per square foot, these chains generate an average of $75. The average annual foodservice revenue per unit is $245,000.
Representative chains in the cluster include Wawa and Casey’s, with the former focusing on in-store delis and the latter developing a takeout specialty in pizza. Others are Giant Eagle Convenience Division (GetGo), Huck’s and Wallis Cos., which got a commissary this year with the acquisition of U-Gas. This is not to preclude c-store giants 7-Eleven and Circle K; while not known for their innovative offers, they have brought scale to grab-and-go food, roller grill and hot snacks.
It’s no surprise that stores across the industry are getting larger as c-store operators invest more space in properly executing foodservice. Many new-to-industry units are topping 6,000 square feet, but it will take time for more chains to hit that lofty range. Those there today generate an average $975,000 annually in foodservice revenue per unit, and an average of $105 per square foot, with the top skewed by megastores such as Buc-ee’s. (Click here for more on these players.)
The chains with stores smaller than 2,000 square feet have the least flexibility in generating foodservice dollars. A big part of the industry is in this segment, with 43% of the Top 202 companies operating smaller stores. But brands such as Enmarket, NOCO, Family Express and Dodge’s Stores prove it can be done, pushing the average foodservice revenue per square foot to $80.