CHICAGO —Lunch is underperforming in convenience stores.
Only 21% of c-store operators said that they expect lunch to provide most of their foodservice sales growth in 2020, ranking lower than both breakfast (32%) and dinner (23%), according to CSP’s 2019 Foodservice Handbook. And lunch also trails most other dayparts among consumers: Forty-three percent choose a c-store for a lunchtime foodservice purchase at least once per month, which is a smaller share than afternoon snacking (44%) and breakfast (51%), according to the 2019 Retail Foodservice Consumer Trend Report by CSP’s sister research firm, Technomic, Chicago.
There is potential for lunch to do better, however, thanks to a new generation of c-store customers with different expectations.
“Today’s customer wasn’t born when c-stores were selling a 20-day-old tuna salad sandwich for lunch,” said Jerry Weiner, consulting partner with c-store consultancy b2b Solutions LLC, Lake Forest, Ill, and former head of foodservice for Rutter’s and MAPCO. At the same time, he said, “becoming a lunch destination won’t happen with prepackaged options, either—it has to be fresh, have a short shelf life and have presence with its packaging.”
In this second in a series of reports on conquering the dayparts, CSP examines the midday opportunity.
Offer more chicken
Nearly 6 in 10 consumers said they would be likely to order chicken items at least occasionally during lunch or dinner from retailers—higher than any other food category, according to Technomic’s 2019 Retail Foodservice Consumer Trend Report. This includes pizza, burgers and Mexican options.
Chicken’s adaptability to both grab-and-go and sit-down occasions drives its appeal in retail foodservice, said Greg West, senior vice president of marketing and innovation for food equipment manufacturer Broaster Co., Beloit, Wis.
“The portability of chicken is strong, especially in convenience,” he said. “It can be eaten during a formal meal, but it’s also great taken to go.”
Chicken comes in a variety of formats, including boneless strips, bone-in or bite-sized popcorn styles, each of which appeals to on-the-go and sit-down occasions, West said.
Potatoes all day
More than 80% of consumers said they would be likely to order fries or potato wedges at least occasionally during lunch or dinner from retailers—higher than any other side option, according to Technomic’s 2019 Retail Foodservice Consumer Trend Report. And the other most popular sides were mashed potatoes (78%) and baked potatoes (72%), ahead of options such as macaroni and cheese and bread.
“Potato-based offerings are most popular in terms of retail foodservice sides,” Technomic said. “These options are both filling and craveable, making them consumer favorites.”
Fries and potato wedges are successful in c-stores because of their portability, West of Broaster said.
“If you’re not necessarily looking for a sit-down occasion—like most c-stores—fries or potato wedges are the easiest to eat,” he said.
Variety is key
Sixty-eight percent of consumers overall—including 72% of female consumers—said having a wider variety of items to choose from would prompt them to purchase afternoon or evening foodservice items from convenience stores, according to Technomic’s Q4 2019 Convenience Store MarketBrief.
Southwest Georgia Oil offers rotating afternoon and evening value meals every day of the week. For example, the chain features baked spaghetti and lasagna on Tuesdays, chicken and dumplings on Wednesdays, meatloaf on Thursdays and fried fish on Fridays. The chain launched this program in 2019 and has seen positive results from it during lunch and dinner dayparts, said Michelle Weckstein, director of foodservice for Southwest Georgia Oil Co. Inc., Bainbridge, Ga.
“We get repeat customers because they know that they can count on us always having whichever item they like for that day,” Weckstein said.
Lower the prices
More than half of consumers said that they rarely visit convenience stores for foodservice because prices are too high—a 22-point increase compared to 2018, according to Technomic’s 2019 Convenience Market Annual Report. This growth is jarring, and despite constant limited-time offers (LTOs) and specials, it appears consumers still believe c-stores have a price problem. High prices were followed by a lack of healthy options (31%) and c-stores not being top of mind for foodservice (31%).
In more than 100 Circle K stores, Krispy Krunchy Chicken offers a $4 chicken sandwich and fries combo, which has helped drive lunch traffic, said Allison Dandry Shapiro, director of communications and technology for Krispy Krunchy Foods LLC, Alexandria, La.
“$4 meal deals are definitely going to pull people in,” she said.
Meanwhile, more than half of consumers said that being able to receive free items with their purchase would encourage them to buy more prepared foods at retail—more than any other factor, according to the Technomic report. Army Air Force Exchange, Nashville, Tenn., the retailer on U.S. Army and Air Force installations, offers a free beverage with every pizza slice or deli sandwich, said Marissa Tinoco, corporate buyer and director of foodservice for the company. This helps drive afternoon lunch traffic, she said.
Make it fresh
More than a third of consumers said that they would purchase prepared food from retailers more often if it were made fresh, according to Technomic’s 2019 Retail Foodservice Consumer Trend Report.
Freshness is becoming table stakes for c-stores that want to establish themselves as foodservice destinations. Some operators are taking that dedication to the next level. Southwest Georgia Oil rotates fresh sandwiches and other hot items in its merchandisers between 10 a.m. and 2 p.m. every, following a test it implemented last year in a few of its nearly 80 locations. The company guarantees fresh lunch to be in the merchandisers during this period, and if the food isn’t up to these standards, customers eat for free, said Weckstein of Southwest Georgia Oil. This strategy has helped keep employees on top of food prep and ready to serve to customers, she said.
“It’s really that simple—the food needs to be fresh,” she said.
Tighten the menu
The number of food and beverage menu entrees available in convenience stores decreased more than 5% in 2019, according to Technomic’s 2019 Convenience Market Annual Report. Specifically, sandwiches decreased nearly 37% and sides dropped more than 12%. Focusing on one or two foodservice items—such as sandwiches or sides during lunch—rather than an expanded menu may attract more customers, said Jessica Williams, founder and CEO of c-store foodservice consultancy Food Forward Thinking LLC, Louisville, Ky.
“There’s strength in doing one product very well,” she said. “If you could pick one item for which you’d like to be famous for, do that and do it great.”
Casey’s General Stores, Ankeny, Iowa, and Parker Cos., Savannah, Ga., both use this strategy with pizza and fried chicken, respectively. Although the chains serve other foodservice items, they have built their brands around one particular item. Focusing on enhancing a core item is something other operators should be doing as well, Williams said.
Spread the word
Fifty-nine percent of convenience-store operators said social media and new marketing efforts offer the most new business-building potential for their foodservice programs, according to CSP’s 2019 Foodservice Handbook. This ranked ahead of loyalty programs (54%) and mobile ordering (49%).
Social media can target customers even minutes prior to going on a lunch break, said Shapiro of Krispy Krunchy Chicken. For example, if they’re at work and are about to leave for lunch, they may find a geotargeted ad promoting a sandwich deal at their local c-store and decide to visit for lunch.
“Social media helps customers find those deals,” she said.
Weckstein of Southwest Georgia Oil advises operators to offer free lunches to local or sample food items at the pump to get customers in during lunch.
“This also builds awareness among employees about [c-stores] as a local lunch option,” said Dee Cleveland, director of marketing for Hunt Brothers Pizza, Nashville, Tenn., a c-store pizza supplier.
Beyond offering free lunches to the community, Southwest Georgia Oil has also held summertime cookouts to lure gas-pumping customers inside.
“We had a grand opening where we cooked our roller grill bratwursts and hot dogs outside the store,” she said. “The vendor came out and did it with us and it was a huge success.”