CHICAGO — The coronavirus pandemic has gutted every sector of the U.S. foodservice industry, from convenience stores and restaurants to noncommercial operations and supermarkets.
The financial decline has been so devastating that, as of late May, the industry is expected to lose $183 billion by the end of in 2020, putting U.S. foodservice at the same relative size it was in 2012, according to CSP sister data firm Technomic, Chicago.
At the same time, though, c-store operators cannot let today’s losses prevent them from succeeding in the future. Since it will take months—maybe years—for c-store foodservice to rebound, now is the time for retailers to plan their entrance strategy for once the pandemic slows.
“[C-store] operators need a plan for returning to work,” said Jessica Williams, CEO of c-store consultancy Food Forward Thinking LLC, Louisville, Ky. “Who knows how many habits, systems or products will have changed by the time they’d be back.”
Operators can use the pandemic to focus on employee training for food preparation and cleaning, as well as testing new menus items and crafting menu labeling information. Most importantly, a tactical entrance strategy can help c-store operators succeed in a world where foodservice as we know it will be forever changed.
Revamp Your Menu
C-store operators should use this period to rethink their menus and refocus the types of foods they offer. Williams suggests beginning with a limited number of items on the likelihood retailers will have fewer customers entering the store for a while, and they will be purchasing less total food compared to pre-pandemic times. While keeping traditional fan favorites is crucial, operators should also experiment with new food trends, she said, such as frozen take-home meals. For instance, consumers may feel more comfortable purchasing take-and-bake pizzas than made-to-order pizzas due to sanitization reasons.
“Re-introduce your top-sellers, but don’t be afraid to be innovative with what demand tells you,” she said. “Take a good look at who is shopping in your store and when and offering food to that audience.”
Like many other c-store chains, Little General Stores Inc., Beckley, W.Va., halted the sale of roller-grill items and self-serve buffets during the pandemic. As part of its re-entrance strategy, Little General has focused on selling grocery items and cold grab-and-go offerings, specifically increasing its supply of sliced meats and cheeses, pastas, breads, salads and more, said April Sauls, director of retail food for Little General. Little General re-opened its coffee bars and fountain beverages June 8.
“Re-introduce your top-sellers, but don’t be afraid to be innovative with what demand tells you.”
“We already had a small grocery section, but that’s actually increased [in sales] during the last couple of months,” she said. “If the customer keeps this as their routine, and if there’s still the demand for it [post-pandemic], we will keep moving forward with it.”
Every food item must have a reason for existing in the store, Williams said. But being easy to execute or having a long shelf life isn’t enough; instead, justifiable reasons include the product having high demand, if the value price is on point, or if it meets a specific consumer need, she said. In Little General’s case, its grocery items spiked once the pandemic hit, so adding more meats and starches made sense for positioning itself in a post-pandemic world.
“Make each item interview for its spot in your store,” Williams said. “Make it earn its place.”
Talk to Employees and Suppliers
Reeducating sick or absent employees on food prep and cleaning practices is essential to an entrance strategy, Williams said. Eighty-five percent of convenience-store operators said that they expect food safety and sanitization efforts to stay heightened once the pandemic subsides, according to a CSP survey conducted in April. With those restrictions in place, retailers will have to re-write foodservice procedures to include any new food-safety practices and keep in constant communication with their team members on these initiatives.
“Keep the long view on keeping team members safe in their roles and not pushing them to do anything,” Williams said.
Sauls briefs her team weekly on health guideline updates in Ohio, Virginia and West Virginia, Little General’s operating states. The company has already begun retraining employees on cleaning self-serve units and other kitchen equipment, as well as instructing on how often to clean in general, she said.
“I would rather make 50 cents off a hot dog than nothing at all.”
“Now is a great time to detail cleaning processes,” she said.
Now is also the perfect time to have a serious discussion with distributors and suppliers about what the future will look like. Discussing how self-serve formats can function and what food supply costs will be can position a brand well for re-entrance, said Williams. For example, operators and suppliers must discuss how the recent closings of meat-manufacturing facilities affects their chicken or burger programs.
“Having honest conversations with distributors and suppliers on short-term and long-term strategy is key,” Williams said.
Retailers can also use suppliers and distributors for menu ideation, Williams said. And for help in the kitchen, equipment suppliers may offer smaller ovens, heaters or coolers suited for a tighter menu.
“Ask your suppliers on how to eliminate steps and simplify things for you,” said Williams. “Now is the time to ask them for help.”
Sauls is currently working with her chain’s equipment suppliers for roller-grill solutions and safe packaging sources. And while these alternative options may be expensive and result in lost profits, it beats having zero profits, she said.
“I would rather make 50 cents off a hot dog than nothing at all,” she said. “If new [packaging and equipment] options are what get people feeling safe about buying, then that is what we must do.”
Be Flexible
Retailers must be nimble and willing to drift from their traditional food operations, Williams said. Adjusting the roller-grill offer is a textbook example: moving hot dogs and sausages to behind-the-counter will surely be different, but since traditional roller grill may not return for months, it’s essential that operators—and their customers—adapt to these changes.
“Self-serve will not come back for a long time,” Williams said. “Have the courage to let [the program] evolve and allow it to steadily grow into what it needs to be one day at a time.”
Same goes for any pre-planned food promotions. Any annual roller-grill campaign is now scrapped, making calendar planning for the next 12 months vital, Williams said. Retailers must be focused on what team members can prepare and serve now instead of what’s customers can grab themselves, she said.
“Don’t plan on having self-serve in any advertising, because you may need to pull the plug at any point,” she said.
Bottom line: It’s going to take months of planning, dedication and courage to fully re-open c-store foodservice. But if operators proceed with a prudent entrance strategy, they may find themselves set for a bright future once the pandemic slows—whenever that may be.
Watch for CSP’s guide to rebooting your foodservice operation in the August issue of CSP magazine.
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