Nearly half of consumers are “very concerned” about the effect of rising prices on them personally.
This stat, along with the companion figure that 80% are “concerned” or “very concerned,” comes from CSP sister research arm Technomic, Chicago, during its recent fall 2024 C-Store Foodservice Update hosted by Technomic Principal Donna Hood Crecca.
This concern and others, such as the majority of consumers feeling their personal finances remain challenged, are still prevalent even though there has been good economic news.
“Even with some of the good headlines, consumers are still cautious, they’re still concerned, and it’s going to take a while for some of these good metrics to really reach them and have them feel the impact,” Crecca said.
Elevated food and housing costs are top of mind for consumers, which is putting considerable pressure on their household finances, Crecca said.
Those who said they’re “getting by, managing money carefully,” was 45% in 2024’s third quarter, while 33% said they were “struggling to make ends meet.”
“We find those who are challenged—it’s really higher among those in a lower-income bracket, which is really the sweet spot for convenience store,” she said. “That’s kind of their core consumers.
“But I can also tell you we are seeing consumers earning up to and just over $100,000 a year also reporting they are feeling very pressured.”
Focusing on Food
Focusing on c-stores, Crecca said Technomic is seeing ever greater focus on foodservice among operators not only as a strategic growth category but as a competitive imperative in the current environment.
At the recent NACS Show, Crecca said she had never seen “such activity, such buzz, such innovation around foodservice on the NACS Show floor,” and how, as CSP sister publication Restaurant Business wrote, “Convenience stores are trying to ‘out-restaurant’ restaurants.” Some of those ways are by c-stores “adding global flavors, dirty soda, value bundles and more to try to steal more dollars from restaurants,” Heather Lalley, managing editor, wrote.
In conversations and presentations, Crecca said foodservice-focused talk included:
- Build that dinner daypart
- Food that’s fresh and fast
- Satisfy the guest—because they are our guests
- Brands build trust and drive trial
“Consumers are increasingly sourcing dinner at convenience stores,” she said. “We’re now in the consideration set. So, this is a big push for many, many operators.”
She added, “Food that’s fresh and fast is now table stakes in this particular segment of the foodservice industry, which is great.”
Buying Is Rising
Food and beverage purchase frequency is increasing, Crecca said.
“We’re seeing increased engagement with food and beverage, both retail and prepared offerings,” she said. “Prepared food and beverages drives frequency for the operator and it delivers probably the highest margin in the c-store channel.”
Among typical purchasers, item purchase frequency of food items once a week or more was:
- 71% in July 2024
- 63% in April 2024
- 62% in January 2024
In beverage items:
- 70% in July 2024
- 68% in April 2024
- 70% in January 2024
“It’s good to see, even in this economic environment, that uptick in foodservice food items and fairly consistent engagement for prepared beverages,” she said, adding that made-to-order and self-dispensed beverages are “very competitive” right now with quick-service restaurants and fast-casual restaurants. There are a lot of beverage-focused concepts in the market right now, “so it’s great to see this stability in consumer engagement.”
In a survey of 100 convenience-store operators in October, Crecca said, the top concerns were:
- Rising foodservice item/ingredient costs
- Rising foodservice packaging costs
- Supply chain/availability of foodservice items
- Ability to retain current store-level employees
- Ability to hire enough store-level employees
However, “The good news that is the share of operators who express concern about these issues has decreased for each of these, down more than 10 points since we measured it in April,” she said.
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