Invest in Delivery

COVID-19 advances a different way to reach customers
Illustration by Nathan Hackett

CHICAGO — Offering delivery and mobile ordering is critical for c-store operators looking to reboot foodservice programs after COVID-19, because these services allow for contactless food transactions, says Brian Ferguson, vice president and chief merchant for Pilot Co., Knoxville, Tenn.

“Digital and mobile capabilities have been essential during the pandemic and will be moving forward,” he says.

While more than a third (35%) of c-store consumers said they had never used c-store delivery for foodservice prior to the pandemic, nearly half (46%) say that they will now use c-store delivery for food options at least once a week, and 84% said they would once a month, according to Technomic.

“Even as restaurant dining rooms re-open, many consumers remain reliant on takeout and delivery options due to ongoing safety concerns or just appreciation for the convenience,” says Donna Hood Crecca, principal for CSP sister research firm, Technomic, Chicago.

Yet despite increased consumer demand for delivery and mobile ordering, many c-store operators still don’t offer these services. Although more than half (53%) of c-store operators said they think delivery, mobile ordering, curbside pickup and other technologies will become more common than in-store foodservice purchasing down the line, less than 15% have actually implemented these services into their foodservice programs, according to CSP’s 2020 Foodservice Handbook.

Bottom line: This needs to change.

“Foodservice-focused c-store retailers that don’t provide these conveniences risk being left behind,” Crecca says.

For some operators, delivery profits during the pandemic have surged. Foxtrot, a chain of seven upscale c-stores in Chicago, prides itself on its 60-minutes-or-less delivery and mobile ordering program. While delivery was already a core program for the chain prior to the pandemic, the outbreak forced Foxtrot to focus even more on its online and delivery business than before. Since March, Foxtrot’s delivery sales of wine, cafe sandwiches and coffee have reached all-time sales highs, says Mike LaVitola, CEO and co-founder of Foxtrot, Chicago. LaVitola is a strong proponent of c-stores—from large chains to independents—harnessing these services.

“Pickup, delivery and mobile ordering limit human interaction and will continue to insert themselves into c-stores,” he says. “If c-stores can think more broadly than the four walls they are working with, it will give them access to a wider range of customers.”

What long-term effects do you [retailers] think the pandemic will have on the way c-stores operate foodservice programs?

Source: CSP 2020 Foodservice Handbook

But not all operators came into the pandemic with a sound delivery program. Although Little General had “gotten its feet wet” with delivery tests in various stores early this year, the brand was forced to go all-in once the pandemic hit, says April Sauls, director of retail food for Little General Stores, a 112-unit chain based in Beckley, W.Va. Now months into its program, Little General’s delivery service has been especially successful at its locations with a Godfather’s Pizza restaurant, she says, as pizza has been a top-selling delivery item during the lockdown.

Sauls says she expects Little General to focus much of its foodservice attention into delivery even once the pandemic slows.

“[Delivery] will be the new norm,” she says. “Customers are telling us now what their new routines are going to be: They will want delivery even after all is said and done.”

Circle K—a division of Alimentation Couche-Tard Inc., Laval, Quebec—also pivoted to delivery and mobile ordering during the pandemic after first piloting these programs earlier this year. The second-largest North American c-store chain now offers these services in several hundred stores. The key to

successfully launching delivery programs is to consistently “listen to customer demands and observe how they define convenience,” says David Hall, vice president of global foodservice for Circle K.

“As always, but especially during times of change and uncertainty, it is essential to listen closely to your customers to understand and stay in step with their evolving needs,” he says. “There have been many valuable learnings during the pandemic, and we plan to take these forward to enhance future support for our customers’ needs and delivery options that make their lives easy.”

46% of c-store consumers said they will order prepared foods or beverages from c-stores for delivery at least once a week in a post-pandemic society, per Technomic

Maverik, meanwhile, had not planned to launch delivery and mobile ordering until 2021, but had no other choice than to do so in March because of the pandemic, says Lore.

Fast-forward to early June, and Maverik had completed its second round of beta testing for delivery. The company plans to launch both delivery and online ordering through Uber Eats, DoorDash and Grubhub by the end of this summer, Lore says.

“We felt we were late to that game, but I said, ‘We have to do [delivery] now,’” he says.

Beyond the safety benefits, delivery also allows c-stores to compete with quick-service restaurants (QSRs), says Leslie Hoffman, vice president of national foodservice sales for commercial equipment manufacturer Alto-Shaam, Menomonee Falls, Wis. QSRs have championed delivery for decades, and if c-stores plan on boosting their foodservice programs in a post-pandemic world, offering delivery is a must, she says.

“You may not have as much morning or evening traffic [after COVID-19], so you can capitalize on delivery,” she says. “Operators are going to have to learn that c-stores must take nontraditional routes—like offering delivery, curbside pickup and drive-thrus—to compete with QSRs.”

Click here to view the complete Rebooting Foodservice report.

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