Rising foodservice items/ingredient costs is the top concern among convenience-store operators, according to CSP sister research arm Technomic, Chicago, in its spring C-Store Foodservice Update.
Among 100 c-store operators surveyed, 67% were concerned or very concerned about rising foodservice items/ingredient costs, followed by 65% concerned about rising packaging costs, said Donna Hood Crecca, principal at Technomic, who presented the results in an April 29 webinar.
In third place, at 59%, was concerns about supply chain/availability of prepared food items/ingredients, which was up 11 percentage points from October.
In fourth among concerns, at 50%, was supply chain/availability of prepared beverage items/ingredients. Coming in fifth, at 49%, was supply chain/availability of foodservice packaging.
In the word of eggs, in the news often recently, 68% of c-store operators report increased costs for fresh eggs and 56% report increased costs for egg patties.
To cope with the increased cost of eggs, 57% of those surveyed said they have increased prices on items that use egg products, 31% have not but said they might if cost increases continue, and 12% have not and will not raise prices.
One retailer in the survey said, “We had to raise the price $1 extra an egg. The sales are still the same and, overall, people understand.”
Another respondent said sales have dropped about 5% due to rising costs.
In good news, “Sixty percent of c-store operators anticipate an increase in foodservice traffic in the next six months,” Crecca said.
To boost in-store traffic, “Operators are leveraging multiple strategies to drive visits in 2025,” Crecca said. “Foodservice plays a key role.”
The top strategies, according to Technomic:
- 47%: Expanding/enhancing foodservice offerings (this jumps to 60% for chains)
- 39%: Improving the in-store experience
- 39%: Increasing foodservice marketing/promotions
- 38%: Offering more limited-time offers
- 36%: Offering more foodservice specials/deals
- 32%: Implementing strategic price promotions across key categories beyond foodservice
- 31%: Increasing loyalty/rewards program deals and/or benefits (this is 45% for chains)
When it comes to what c-stores need the most from foodservice suppliers to drive traffic, operators cite deals/promotions for loyalty/rewards members, social media marketing initiatives and exclusive offerings, Crecca said.
Operators also want prepared food menu item development, strategic price promotions, and prepared beverage menu item development.
“Value meal deals heighten competition with QSRs (quick-service restaurants),” Crecca said, noting that 30% of consumers report decreased c-store foodservice purchases in favor of QSR value meal deals.
“Fifty percent say they would purchase prepared food/beverages at c-stores more often if more value meals were available,” she added.
Driving Sales
Operators might want to focus on cold beverages to help grow sales. Cold and frozen offerings are projected to grow three times the rate of hot/specialty offerings through 2028, Crecca said.
“Fifty-five percent of total prepared beverage sales in c-stores are generated by coffee and coffee drinks,” she said.
The hot case/warmer also is an area on which to focus, with 43% of c-store operators reporting hot case sales increased in 2024 and 48% reported stable sales.
The top reasons for sales growth were increased consumer demand and increased offerings, Crecca said.
Crecca also discussed the importance to consumers of c-store format offerings during the breakfast daypart, noting that 78% of employed c-store patrons are commuting at least a few days a week—and that QSR breakfast sales are slow.
Consumers who find the following somewhat important/very important:
- 62%: Hot case/warmer items
- 61%: Bakery case items
- 54%: Cold case grab-and-go items
- 52%: Made-to-order food item
- 41%: Roller grill items
Expect more cautious consumers and more seeking deals in their c-store foodservice purchases, she said.
“The battle for traffic continues,” Crecca said. “Win occasions with high-value price promos and LTOs. Suppliers: Be transparent and proactive around produce availability and price shifts.”
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