CSP Magazine

That's a Mouthful

Technomic dishes up familiar faces and some surprises in latest c-store foodservice retailer study.

A lot of c-store shoppers leave the store with an empty stomach. That’s what findings from the second annual Technomic study on c-store foodservice show: Significant gaps exist between chains doing a great job and those that aren’t. Many of these gaps exist in areas customers find especially important, factors such as taste, visual appeal and price.

Top performers among the 21 largest national and regional convenience chains in the study—provided exclusively to CSP—include recognized leaders such as Casey’s, RaceTrac, Sheetz, Wawa and[CSP exclusive]both Kwik Trip and QuikTrip, with chains such as Cenex and Holiday Station stores making the grade even though they’re less known in the industry for their foodservice programs.

Using dozens of qualitative metrics, from questions on visual appeal to “craveability,” the Chicago-based research firm surveyed almost 4,000 c-store shoppers to assess the industry’s foodservice.

Data shows both triumph and struggle.“We believe in our mantra: that QuikTrip will become as good in foodservice as we are in the sale of motor fuel and convenience items,” says Mike Thornbrugh, spokesperson for the Tulsa, Okla.-based chain. “It took us a long time to achieve that level [with gas and convenience], and we are not under any false illusion that it won’t take time to achieve the same success in the foodservice category.”

QuikTrip, a formidable convenience retailer on many levels [CSP —March ’13,p. 38], is clearly on track with its foodservice aspirations, with the 648-store chain already hitting top marks in areas of unit appearance, value and visit satisfaction.

Though survey methods rule out direct chain-to-chain comparisons, certain numbers collectively show where the channel stands among its customers. The wider the gap between high and low scores, the more top performers outpaced the competition, particularly in areas that motivated consumers to choose foodservice at c-stores.

For instance, many top-rated motives(“clean restrooms,” for one) showed high-low spread of 20% to 25% or greater. This is compared to “convenient locations,” the No. 2 motive that people chose for c-store foodservice, for which the difference was only 10%.

Glaring disparities existed in the following top-rated motives that consumers say drive their choices:

  • Food taste and flavor;
  • Food visual appeal;
  • Service and hospitality;
  • Ability to provide value through price; and
  • Ability to provide value through high-quality menu items.

Again, what this means, says Tim Powell, principal for Technomic, is that some chains are solidly outperforming others in areas that matter to c-store consumers.

The numbers become more telling when considering that respondents are already frequent customers, Powell says. Researchers assigned survey respondentsa specific chain to review based on which one they said they visited last. “These are your customers,” Powell says. “And still, you’re 25% below [the top-scoring chain]? Imagine if your customer were to walk into a Wawa or Sheetz …”All hope is not lost, though. In many areas, the percentages between chains were close together. “But if you’re well below a top player, these are areas of opportunity,” Powell says.

What People Want

In assessing the data, Powell says the industry needs to focus on why people buy their meal or snack at c-stores vs. restaurants or other quick-service meal options. The Technomic survey identified 34 factors, with the No. 1 both “taste and flavor of the food” and “convenient location,” each receiving collectively 90% of the respondents’ “important” or “very important” votes. In third was “offers a good value through lower prices” (89%),with “service is pleasant and friendly”(88%) at fourth and “quality of the food”(87%) taking fi fth.

At the low end of motivations, “kid friendly” was at 53%, “has a recycling program” at 51%, “décor is up to date” at 48%, “offers limited-time menu items” at 45% and “music selection is appropriate” at the lowest ranking of 36%.

Based on these rankings, says Powell, “A kids’ menu may not be as important.”

Time and again , the disparity between high and low identified strengths and weaknesses. In the area of unit appearance and ambiance, for instance, the gap among retailers was only 14%, which may indicate that, as a group, these chains perform to a common standard. But in the subcategory of clean restrooms, the disparity widens to 26%, with Altoona, Pa.-based Sheet topping the list at 91% and the lowest chain—which CSP respectfully declined to reveal—scoring 65%.

Other big gaps include “food and beverage quality” at 24%, “foodservice/prepared foods variety” at 25% and “I will recommend this store’s prepared foods to family friends and acquaintances” at 30%.

Indirect Comparisons

Comparing store results directly, apples to apples, is misleading, according toTechnomic. Each chain received its own set of respondents, so any single individual taking the survey would not have visited all 20 chains on the roster. As a result, there’s no standard barometer. That said, chains that score consistently

Main Course

If retailers wanted to chew on anything, the food-and-beverage results of Technomic’s recent study may be the juiciest, serving up what folks think of c-store food.

Over the past 10 years, foodservice has experienced a renaissance at LaCrosse, Wis.-based Kwik Trip. Once top officials at the 435-store chain decided to reinvent the company as a foodservice destination, they spent millions on a new commissary, dairy, bakery, warehouses and distribution system.

All foodservice offers go through a rigorous research, development, tasting and testing period, says Greg Olson, vice president of retail operations for Kwik Trip. Every three to four weeks, a new product comes out, stimulating the category and keeping the assortment fresh.

Stores now are testing a new chicken tender melt sandwich, and potentially rotating out a meatloaf offer. “As you add, you have to take away,” Olson says. “You have to manage your variety.”Variety was one of Kwik Trip’s strong points in the survey, ranking in the top three alongside Sheetz and Wawa. KwikTrip also placed in the top three for food quality, visual appeal and carrying a “craveable” item that customers would go back for. Wawa performed as well as Kwik Trip, but in the competitive arena of food and beverage quality, Sheetz was clearly the overachiever. It scored in the top therein more than half of the dozen or so questions that made up the food-and beverage category. In terms of its composite score, Sheetz had the highest at 86%, Wawa followed with 84%, and KwikTrip at 82%.

For Kwik Trip, its success with morning and lunch sales points to an opportunity at dinner. In addition to pizza, the chain has produced 64-ounce bags of soup. The options provide a grab-and-go alternative for families of four.“It’s our next huge change,” Olson says. “But it’s much easier to take that step today than it was 10 years ago. Back then,[our customers] didn’t trust us. We’re in a much better position today.”

Service and Hospitality

Building a viable foodservice program extends to more than just product development, says Thornburgh of QuikTrip.“We believe we have outstanding locations, great facilities and very competitive pricing, “he says. “But if you don’t have great customer service and perform it consistently, you will not become a destination for foodservice or any other offer you sell.”

For Inver Grove Heights, Minn.-based CHS Inc., which oversees the Cenex brand, differentiation through service and the buying experience is critical, according to Ian Johnstone, general manager of CenexZip Trip, its chain of 70 company stores. Overall, CHS has 1,400 stores.

 “We’re making sure we sell customers product the way they want to buy them vs. the way we want to sell them,” Johnston says. “This includes taking check sand not having a prepay policy. You may ask: What does it have to do with foodservice? It’s all-encompassing. We’re selling an experience.”

Customer service and hospitality punctuated Cenex’s performance, putting it in the study’s top three. A potential factor in its high score is the ongoing remodeling of its Zip Trip locations, with the purpose of refreshing the brand. However, given the survey methodology, it was unclear whether or not survey shoppers visited stores branded Zip Trip, Cenex or AM Pride.

Cenex scored among the top three chains on the question of pleasant, friendly service. Kwik Trip and Sheetz were the other two. The chains repeated their results in the service attribute of staff product and concept knowledge.

In terms of store interior cleanliness, five chains—QuikTrip, Sheetz, Kum & Go, Kwik Trip and RaceTrac—scored in the range of 91% to 93%. The lowest-scoring chain had a mark of 84%, indicating tighter race and more than likely a general industry standard.

“We’re always cleaning,” says Olson of Kwik Trip. “It’s basically what we talk about all the time: The guest comes first. Service has to be right; the store has to be clean. It’s filtered down to all levels. They know it’s a priority.”

Defining Value

At the same time that retailers focus on food quality and customer service, another element requires attention: value. At Kwik Trip, promotions such as its “Dollar Burger Wednesday” special have become staples. “Guests come to us knowing we’re going to offer value,” Olson says.“Some specials exist because of our vertical integration. For instance, we’re making our own hamburger buns. That allows us to be [flexible] with pricing.”

In fact, in a survey question about providing value through price, KwikTrip tied for No. 1 with Sheetz, at 90% In the remaining three questions regarding value, Kwik Trip finished in the top three or four. Though Sheetz dominated this category of questions, Cenex and Susser’s Stripes stores, along with Kwik Trip, made strong showings.

What is clear is that the leading chains, much like midsize companies and independents, are investing in foodservice, whether it’s delivering a better cup of coffee, offering greater variety at breakfast or lunch or cultivating a truly pace-setting program. That said, erratic quality and execution remains an Achilles’ heel for the industry, according to Powell of Technomic:“There’s so much opportunity for the entire channel to increase its image.”

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