Race for Retail Foodservice: Can C-Stores Deliver?

Younger consumers drive the food delivery trend

CHICAGO -- It’s no secret who’s driving the delivery trend. Younger consumers are 7% more likely to order food for delivery than their more seasoned counterparts. Coupled with more than half of consumers who say home cooking and retail foodservice offer about the same value, retail foodservice has the momentum to become a staple of Americans’ diets. Expanding or testing new delivery  services seemed to be a fad in the beginning of the year, with some c-store companies jumping on board.

What percentage of your prepared food purchases are ...?

Meanwhile, grocery’s mantra for delivery seems to be “go big or go home.” Now owned by Amazon, Whole Foods Market began leveraging the tech behemoth’s Prime Now same-day delivery capabilities this year. Kroger is partnering with robotics company Nuro to pilot unmanned delivery vehicles, and San Antonio-based H-E-B acquired food delivery company Favor.

C-stores are beginning to test the delivery model, with chains QuikTrip Corp., Tulsa, Okla.; Wawa, Wawa, Pa.; and GetGo, Pittsburgh, partnering with third-party delivery services. In-house delivery, however, can take an operational toll. With back-to-back quarters of lagging foodservice sales and growing labor costs, Casey’s General Stores, Ankeny, Iowa, decided to scale back its delivery service and hours at more than 100 of its convenience stores.

Liability, labor and lack of control of product and service has Kwik Trip hesitating to roll out proprietary and third-party delivery programs.

Also, there’s the question of demand: Takeout still constitutes 73% of all consumers’ prepared-food purchases, according to CSP sister research firm Technomic, Chicago. However, the biggest barrier might be scalability. From a cost analysis standpoint, adding delivery to 600 stores is not feasible, Servais says.

How do you value a retail foodservice meal compared to a meal prepared at home?

The chain is mulling other frictionless services that leverage existing labor and technology.

“The best thing we could do in our industry is curbside pickup,” he says. “Our mission is to do whatever we can for the guest—we live and breathe that. Curbside pickup allows us to do that up until the point of contact without someone else getting involved.”

Click here to read the complete Race for Retail Foodservice report.

Next: 5 Foodservice Ideas to Steal From Other Side of the Aisle

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