Offering freshly prepared food is becoming the new normal for c-stores as they go head to head with quick-service and fast-casual restaurants, grocery stores and even dollar stores and bookstore cafes for their share of consumers’ wallets. According to the NACS State of the Industry report, last year, 11% more c-stores were selling prepared foods compared to 2015.
At the same time, the number of consumers stopping at c-stores for a quick snack or meal is growing. Almost half of consumers buy prepared-food snacks in convenience stores, according to Technomic’s 2016 Snacking Occasion Consumer Trend Report, powered by Ignite.
“As the industry grows away from the gas, smokes and Cokes model, foodservice is a must and today’s customers are demanding it. Some consumers won’t even come into the store unless you offer it,” says Drew Mize, senior vice president and general manager of global retail for PDI, a software company based in Temple, Texas.
With foodservice comes foodservice management
While many operators are making a play for foodservice, and several are doing it very well, a huge challenge is managing these programs, says Donna Hood Crecca, senior director with Technomic.
One big hurdle, she says, is “closely managing ingredient and item procurement and execution to control food and labor costs. Lack of experience and expertise in foodservice costing and operations models often result in foodservice programs that may be popular with consumers but not so profitable for the convenience retailer.”
Making money with a foodservice program is nonnegotiable, says Mize, and it can be difficult to manage and optimize all the components. Retailers also have to figure in labor cost, which is significantly higher in foodservice than other store categories, he says. “So, while it’s easy to associate a great gross margin with the foodservice category, it’s really hard to make money off it, which is the bottom line,” he points out.
A good software program is essential to help control foodservice costs, profits and quality.
PDI’s c-store ERP platform provides software that can:
- Track items’ sales (if they’re selling and when they’re selling), recipes, receiving, inventory and sales components so retailers can properly purchase the component parts and track results for the foodservice program.
- Help retailers properly account for items they are selling, “so you can properly audit and account for waste, bad merchandise and spoilage,” says Mize, “so these components can be reduced. Everything you are throwing out is expensive and that comes straight out of the bottom line.”
- Control regulatory pieces of a foodservice program, including nutrition labeling. “It’s important to have that data so it’s in your price book, in your systems and you have that information from the start in order to support upcoming product-labeling requirements,” Mize says. PDI’s software will have the ability to print labels in spring 2018, but until then, its systems have the data required to support labels.
- Also coming up in 2018, PDI will offer software to control advanced production planning—knowing when to start the process of building end products so they’re available at the right time. This helps staff understand the process of making something, such as when to take dough out of the freezer.
“We need to give the staff all the tools they need for the business,” says Mize.
This post is sponsored by PDI