If you needed further evidence of the intensifying competition and blurring of lines between quick-service restaurants and convenience stores, you got 566 million data points on Wednesday.
That’s the dollar figure for which Chicago-based fast-casual sandwich chain Potbelly is to be sold to Atlanta-based c-store chain RaceTrac, in a deal expected to close in the fourth quarter.
Forget what you think you knew about “smokes and Cokes” and day-old hot dogs spinning on a gas station roller grill. Convenience-store foodservice programs are now fresh, hot and very much looking to steal share from restaurants, if they aren’t already.
“We actually have identified the convenience channel as a growth segment in the broader foodservice industry,” said Donna Hood Crecca, senior principal with Restaurant Business and CSP sister data firm Technomic, during a presentation at the convenience-focused Outlook Leadership Conference in Rancho Palos Verdes, California, last month. “We are forecasting for 2025, as has been the case the past couple of years, that fresh food and beverage sales at convenience stores are outpacing total sales in QSR restaurants and the foodservice industry overall. So, a lot of momentum here.”
C-store foodservice has undergone staggering growth in the last two decades.
In 2004, 11.9% of in-store sales at convenience stores came from foodservice, according to National Association of Convenience Stores (NACS) data released earlier this year. By 2024, foodservice sales (including prepared food, commissary and dispensed beverages) made up 27.7% of in-store sales and 38.6% of in-store gross margin dollars at c-stores, the association found.
The country’s largest convenience chain, Irving, Texas-based 7-Eleven, said last month it intends to open 1,100 new restaurants in its stores by 2030. And the retail giant said the 1,300 new stores it plans to open during that timeframe will also have an increased focus on foodservice.
What’s more, overall foodservice and merchandise sales at the country’s more than 152,000 convenience retailers reached a record $335.5 billion in 2024, a 2.4% increase over the previous year, NACS found.
And c-stores benefit from an added consumer trend when it comes to foodservice: People who are in the habit of buying food from convenience stores do so often.
In fact, 32% of prepared foods customers visit c-stores two to three days a week and 11% are considered “super-heavy” users who come in once a day or more, according to data from the Technomic Q3 2025 C-Store Consumer Market Brief.
Those numbers are even higher when it comes to fans of c-store dispensed beverages: 17% are super-heavy users and 38% are heavy users who visit two to three days a week for their hot, iced or frozen drink fix, Technomic found.
And a growing number of diners view c-stores as legit restaurant competitors, according to data from research firm Intouch Insight, presented at the Outlook event. Seventy-two percent of those surveyed said convenience retailers are a “serious competitor” to restaurants.
But convenience stores are not restaurants. And many operators, especially independent ones without the backing of a big chain, can be daunted by developing a prepared foods program for their stores.
Some choose to strike out on their own. Others partner with an existing restaurant chain. And still others rely on plug-and-play programs designed by foodservice distributors, such as the HiBird fried chicken concept launched by distribution giant McLane Co. in July.
“Strategy without execution will not win,” Hood Crecca told convenience retailers at Outlook. “And foodservice is a category where execution is everything. Foodservice is complex. There are opportunities for margin erosion at multiple steps in the process, and the quick-service restaurants now identify this channel as a competitive channel.
“So, you know, you’re coming for them, they’re coming for you. The bar is very high.”
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