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Convenience stores are increasingly positioning themselves to compete with restaurants by offering a growing number of prepared food options.
Although the majority of the c-store industry’s $700.3 billion in annual sales are still derived from gasoline and cigarettes, foodservice now makes up 15.18 percent of that figure and beverage sales make up 14.65 percent, according to Nancy Caldarola, education director of the NACS Center for Achieving Foodservice Excellence.
And those percentages are on the rise, she noted. As of March 31 there were 149,200 U.S. convenience retail locations, conducting more than 160 million transactions daily — with the goal of providing consumers with one place to service all of their needs, including eating, conveniently.
“We are the place you go to refuel, refresh and reward yourself,” Caldarola said, noting that the industry aims to make a difference in the consumer’s life through convenience.
Still, there are lessons both c-stores and restaurants can learn from each other, said Joseph Bona, president of branded environments at brand agency CBX.
First, he noted, c-stores have to work to overcome the so-called “gasoline penalty,” or consumers’ perception that the food might not be fresh at a place that sells gas. “You can have the best turkey sub in the world, but if I can’t get people to understand that we’re a legitimate destination for that, I can’t get them in the front door,” he said.
Because of innovations in the restaurant industry, customers are accustomed to more variety, greater selection, fresher ingredients and better-for-you options, Caldarola added. He said c-stores must follow suit designing welcoming, clean stores and offering customers what they want: good food served quickly.
“Consumers eat with their eyes,” he said. “They buy with their eyes.”
Healthy cues, such as placing produce in front of the cashier’s stand or designing stylish packaging and stores, can help entice customers to step from their gas pump and into the store, he said. As with restaurants, curbside appeal is exceedingly important for attracting consumers.
For c-stores, prepared food offers a big opportunity, said Bill Reilly, senior vice president of marketing GPM Investments. “Female shoppers are a big [on their] wish list as far as reaching new customers,” he said, which is why it’s important to expand beyond the roller grill — where the hot dogs rotate to stay hot — and into produce, freshly made sandwiches, and coffees and smoothies.
But restaurants are not making that job easy, Reilly said.
McDonald’s, which underwent a full-store refresh in recent years, is a big competitor when it comes to coffee and convenience foods, he said.
And even suppliers are getting in on the action, Bona noted, pointing to Chobani Yogurt’s New York City Yogurt Bar.
“They’re taking convenient food transactions away from our industry… and they’re doing it in a rich and engaging way,” he said.
Reilly added that new technologies being employed by c-stores, such as electronic ordering stations, help c-store owners control labor costs and give consumers something they crave: control over the ordering process. Those automated ordering stations can be placed next to the gas pumps or outside of the store, further enticing consumers to not only fuel up outside, but to step inside and buy as well.
“Who am I to tell you how to make your turkey sandwich?” Reilly said of the self-ordering stations. “We gave the power to the consumer.”