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Foodservice

2018 SOI: Foodservice Sales

Prepared foods lead the way

CHICAGO -- C-stores face competition, of course, for both value and premium occasions. For the former, QSR competition is ramping up—to the detriment of c-stores.

“They’re gaining trips and we’re losing trips,” said Alan Beach, senior vice president of merchandising for Irving, Texas-based 7-Eleven Inc., presenting at the 2018 NACS State of the Industry Summit.

He pointed to McDonald’s 4% jump in same-store sales in its latest quarter. The burger chain is gaining thanks to its value positioning, including $1, $2 and $3 value meals for breakfast and lunch. Taco Bell is winning thanks to innovation such as its Nacho Fries, which cost only $1 and come with a nacho cheese dip. The fries, meant to be a limited-time-only offer, were so successful that they were included in one-third of Taco Bell’s transactions since January, Beach said. Meanwhile, Domino’s is beating its competition not necessarily with a better pie but with delivery-tracking technology that allows consumers to track their order’s path via an app.

For c-stores, foodservice provided 22.5% of in-store sales and 33.9% of gross-profit dollars in 2017, according to preliminary results from the NACS State of the Industry Report of 2017 Data. Prepared-food sales and gross-profit dollars both rose about 4%, although sales of dispensed beverages were largely flat. Sales of frozen dispensed dropped 0.6%, and gross-profit dollars fell nearly 2%.

“Frozen slipped across the board, and that, my friends, is something we need to dig deeper into,” Beach said. “That shouldn’t have happened.”

It’s a mixed performance for 2017, but over the longer term, it’s one that c-store retailers should be proud of. Prepared-food sales are up 10% for the channel, and cold-dispensed sales grew 9% over a three-year period.

“We already know we’re really great at immediate-consumption beverage occasions,” Beach said. “We can make food our own.”

Sales by Subcategory

In 2017, c-stores again saw sales of frozen dispensed beverages and commissary decline.

 

Source: NACS preliminary data. Final data to appear in the NACS State of the Industry Report of 2017 Data | * Per store per month | ** Percent change from a year ago

Click here to see complete foodservice sales data.

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