We’ve written extensively about the growing threat convenience stores, with their increasingly sophisticated foodservice offerings, pose to restaurants.
Obviously, there are many need states restaurants can fill that c-stores cannot. (I’ve yet to walk into a gas station and have someone sit me at a candle-lit white tablecloth with a glass of malbec, for example).
But convenience stores continue to march onto restaurant turf, with some segments more threatened by that competition than others.
Foodservice sales (which include prepared food and dispensed beverages) made up 27.7% of in-store sales at convenience stores in 2024 and 38.6% of in-store gross margin dollars, according to data released last spring by the National Association of Convenience Stores (NACS). Two decades ago, just 11.9% of sales inside convenience stores came from foodservice.
But there are some categories that seem more ripe for potential c-store domination.
There’s probably no single restaurant segment more vulnerable to outside threats right now than pizza. As my colleague Jonathan Maze has pointed out in numerous articles, the pizza business is in the midst of major changes.
Fast-casual pizza chain Pieology declared bankruptcy late last year. MOD Pizza continues to shrink. Yum Brands might sell off Pizza Hut. Papa Johns is cutting costs as its sales decline. And delivery stalwart Domino’s is steadily becoming a carryout-driven business.
Enter convenience chain Casey’s, which does the bulk of its business in rural Midwest towns where restaurant options are sparse. The c-store chain has become the country’s fifth-largest pizza concept by sales.
This week, Casey’s borrowed a crowd-sourcing menu page from Burger King, adding the Barn Burner Chicken Pizza to its lineup. The spicy BBQ chicken pizza has a Sriracha sauce base, topped with chicken, bacon, mozzarella, cheddar, red onion, jalapenos and a post-bake drizzle of Sweet Baby Ray’s BBQ Sauce.
The item was created by a Casey’s district manager in Indianapolis and won a contest judged, in part, by James Beard Award-winning celebrity chef Andrew Zimmern.
Pizza is a natural fit for c-stores as it’s a retail-ready product that can be delivered to stores par-baked and served as whole pies or single-serve slices. It’s well-suited for customization as well as meal deals. And it most certainly does not need a dining room to be served.
Commuters have stopped into gas stations for a doughnut-and-coffee breakfast for generations. But c-stores are stepping up their breakfast games.
Convenience-store giant 7-Eleven on Thursday debuted a new breakfast lineup that could be right at home at any fast casual. There’s the Sausage, Egg and Cheese Waffle Breakfast Sandwich featuring pearl sugar-studded Belgian waffles. The roster also includes $1 Waffle Tots and El Gran Tocino Breakfast Tacos (2 for $5) at 7-Eleven’s Laredo Taco Company restaurants.
At breakfast, consumers typically want speed, predictability and value—all attributes convenience stores are known for.
In recent years, we’ve joked at RB about the prospect of fried chicken concepts opening inside existing fried chicken restaurants. The category exploded during the pandemic.
Convenience stores paid attention.
C-store-based concept Krispy Krunchy Chicken, which can be licensed by convenience retailers as a “store-within-a-store,” is growing swiftly, opening more than 600 new locations in 2024. After expanding into Montana last year, the chain now has a presence in all 48 contiguous states.
C-store distributor McLane last summer launched HiBird, a premium fried chicken concept that’s designed to be a “plug-and-play” solution for convenience stores. The concept features Southern-style breaded, pre-cooked chicken that can be heated and crisped in a deep fryer or a rapid-cook oven.
Fried chicken holds well, and consumers are already familiar with buying cooked (fried and rotisserie) chicken from the grocery store, making it a prime contender for c-store expansion.
We wrapped up our time at the annual NACS Show (the major c-store trade show) last fall with a major caffeine buzz. Sure, gas stations and coffee go together like chocolate and peanut butter. But, as with these other categories, c-stores are refining their java programs, going far, far beyond drop coffee.
We’re seeing loaded, customizable coffee bars with syrups and sprinkles and multiple milk options. There’s hot coffee and iced coffee and frozen, dispensed varieties.
As with the other growth segments, it’s hard for restaurants to beat c-store coffee on convenience and price.
This story originally appeared in CSP sister publication Restaurant Business.