Two-thirds of Americans feel shaky about their finances—and this means serious implications for convenience-store traffic.
This insight comes from Robert Byrne, senior director, consumer research, at CSP sister research arm Technomic, Chicago. He spoke about consumer realities impacting dispensed-beverage programs at CSP’s Convenience Retailing University on Feb. 26 in Austin, Texas.
“This is something that leadership needs to see and needs to hear every single day when they’re testing you with finding where that traffic goes,” Byrne said. “It evaporates in this environment.”
Looking at c-store foodservice frequency over the past year does reveal “a bit of a discouraging development,” Byrne said, adding that the number of foodservice consumers entering convenience retailers on a daily basis dropped from 12% to 10%.
“We also have an increase in the number who are coming in for foodservice less than once per month, a subtle but very perceptible shift,” he said. “These are changes that are statistically significant, and it signals the need to address that frequency.”
Some might think this requires a new strategy, but this is not necessarily true, “depending on what we can find here, because there are consumers who have upped their c-store foodservice frequency, and they tell us that good prices really are that main driver,” Byrne said.
Good prices placed first in survey
Good prices, at 42%, is the top reason selected by those surveyed for increased convenience-store foodservice purchases, Byrne said. Placing second, at 41%, is being able to get food and beverages quickly, while stores are located near where one works/lives is third, at 40%.
The remaining reasons—which include good food/beverage variety, food tastes good, food looks/tastes fresh, favorite beverages are offered, good value and high-quality food—had similar results, ranging from 42% to 31% in being selected.
“This tells us that c-stores have many positives beyond price that appeal to foodservice consumers,” Byrne said.
Conversely, the top reason for decreased c-store foodservice purchases is prices that are too high, at 52%. Placing second is preparing food and beverages at home to save money, 45%. There is a big drop from there, with poor food quality placing third, at 14%. Other reasons are food does not look/taste fresh, not enough healthy options and poor overall value.
Retailers should promote affordability
While consumers might have good reasons to be sourcing food and beverages from home, “Do they know that the average price for a c-store fountain beverage is 37% lower than that of a quick-service restaurant?” Byrne said.
Because of this, “It’s time for you to remind them that you are the affordable option,” Byrne said. “Now is better than never.”
Byrne said data from Technomic’s Ignite Consumer program offers more good news for customers engaged with a c-store’s dispensed categories.
When choosing a c-store for foodservice, the c-store customer average was 86% for saying a good value through low prices was important or very important—but 87% for a hot-dispensed consumer, 88% for a cold-dispensed consumer and 83% for a frozen-dispensed consumer.
When asked about beverage quality as a decision driver, the c-store customer average was 85% in terms of saying it was important or very important. All three groups of dispensed consumers said beverage quality was more important than low prices: 89% for both hot-dispensed and cold-dispensed consumers and 86% for frozen-dispensed consumers.
“They're more invested in the quality of the beverages that you're offering than they are in the value that you provide through those low prices,” Byrne said. “They’re invested in the products more so than they are the value. This is great news. You need to take advantage of this.”
Value perceptions and satisfaction are higher among dispensed buyers, Byrne said.
“You need to continue to reinforce the value that these guests are already extracting from their occasions that include dispensed beverage purchases,” he said. “They’re right there. They just need to be reminded.”
In addition, c-stores should lean hard into their beverage value proposition, he said. The average c-store price for a fountain drink is $1.83 compared with $2.91 across quick-service restaurants; the average c-store price for regular hot coffee is $2.11 compared with $3.14 across QSRs.
“Don’t be afraid to throw some shade at QSR prices,” Byrne said. “This has worked well for others.”
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