Foodservice Sales Are Up ... Now What?

Trends to watch: food choice, freshness and the feel of the shop

CHICAGO -- Food choice, freshness and the feel of the shop: These are just some of the key trends that will direct consumers’ foodservice choices over the coming year. That’s according to Technomic’s most recent Retailer Meal Solutions Consumer Trend Report, which explores the latest behavioral, purchase and traffic data of today’s c-store foodservice consumers.

Among the findings are some major upsides indicating evolution in the category. Convenience-store foodservice sales grew 8% from 2015 to 2017. There was also a 21% increase in the sheer number of menu items at c-stores, and a 26% increase in the average price of a c-store meal (now $4.63) vs. 2015.

The data from Chicago-based research firm Technomic—sister company of CSP—also offers a path for c-store retailers to follow in 2018 as they attempt to grow the category. Some points to ponder:

Snacking continues its rise. It’s the leading occasion for prepared foods on a weekly basis, with midafternoon (53%) and evening (28%) visits now the most common snacking dayparts at c-stores. Snacking may also be driving impulse purchases among consumers, given that 62% of prepared-foods purchases are impulse buys.

Fresh is first. Just because the most frequent c-store customers want food and drink they can quickly grab to go, that doesn’t mean they’re willing to sacrifice freshness. Respondents said fresh, customizable offerings are among their top purchase influencers. And more than a third of consumers (35%) say they’d be more inclined to buy prepared foods if retailers guaranteed that the items were made fresh that day.

It’s clear that more brands are responding to this growing demand. In 2017, Salt Lake City-based Maverik announced a wider rollout of its customizable Mexican street-food and Neapolitan pizza platforms into more stores. Circle K’s Midwest division, based in Columbus, Ind., opened three new c-stores in Indiana and Ohio that focus on fresh and made-to-order menu items, including burritos, pizza and doughnuts. And Louisville, Ky.-based Thorntons continued its push into a more premium positioning as the chain expanded its “Real Kitchens, Real Food” program.

Sustainability matters. Customers are also increasingly concerned about how foodservice affects the planet. About 44% of consumers (an increase from 40% in 2015) say it’s important that retailers offer sustainable items and ingredients in their foodservice programs.

Beyond the menu, a store’s interior ambience is increasingly important to its foodservice success. This attribute’s power as a traffic and purchase driver is significant: Sixty-five percent of consumers say the decor and atmosphere of the prepared-foods section is important to their purchasing decision, according to Technomic’s report.

But what defines an appealing ambience, and how can c-stores address shifting consumer preferences?

“Ambience is a lot of things. At the most fundamental level, it’s cleanliness and basic attention to detail,” says Mike Lawshe, president and CEO of Paragon Solutions, a c-store and retail industry design and consulting firm based in Fort Worth, Texas.

“But in the larger sense, it’s everything that the customer sees, hears, touches and smells.”

Hitting the right notes on all of these elements is central to creating a brand, he says. Retailers must think thoroughly about all of a customer’s senses if they want their brand to stand out. Lighting, for example, should be the first go-to in creating ambience, but it remains an underused tool in the convenience channel. For example, Lawshe points to stores that have only a 2-foot-by-4-foot grid of lighting in the deli.

“You walk into the foodservice area and it’s incredibly old-school; there’s no accent lighting, no specialty fixtures to create levels of light for the customer,” he says.

Which design and ambience trends are worth calling out in 2018? Lawshe suggests a focus on textural accents in the interior space. Retailers should consider design elements such as brickstone, metal treatments, reclaimed wood, granite and pendant tier lighting, as well as warmer colors such as mustard and variations of oranges.

All of these design elements—color, texture, lighting—must harmonize.

“What customers see, hear and smell will hopefully lead to what they taste,” Lawshe says. “If they don’t experience warmth in the decor, and a design that speaks to lifestyle, they’re more likely to do a U-turn out of the store.”

Cumberland Farms, Westborough, Mass., put decor and design front and center nearly a decade ago, when the chain began reimaging its interior for new concept stores, which are ramping up rollouts. Foodservice areas are situated in an open design that features a mix of warm characteristics, such as light wood cabinets and flooring, and modern accents such as pendant lighting, stainless-steel fixtures and high-top bar counters.

A variety of indoor and outdoor seating is also available—a plus in drawing the 30% of c-store consumers who told Technomic that seating options are a top influencer in encouraging longer visits.

The idea of using ambience to position c-stores as a destination was also evident a few months ago as Avon, N.Y.-based Quicklee’s revamped a flagship truckstop store in the Rochester, N.Y., area. The modernized, 19,000-square-foot space houses a prepared-foods and beverage section, alongside an open area that features mounted TVs, free internet access, sofa seating and a working fireplace.

“Our focus remains on a fast and friendly shopping experience and transaction,” Ken Perelli, the chain’s vice president, told CSP following the site’s launch in late 2017. “However, in lieu of moving customers in and out of the store quickly, we provided space and an atmosphere that encourages our guests to stay awhile—to make Quicklee’s their destination.”

Judging from what consumers are saying, c-stores must now find a balance between promoting speed and a more slowed-down occasion in a contemporary setting. At the same time, retailers have to tell a food story around freshness, customization and sustainability, while keeping prices in line with consumer expectation.

Challenges abound, but operators on top of their guests’ needs have yet another opportunity to get in on future growth in the foodservice category.

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