Convenience stores that sell food and beverages continue to steal market share from limited-service restaurant chains, new research finds.
While quick-service chains have expanded their operating hours and menus to operate across all dayparts and capture consumers trading down from casual and fast-casual competitors, they still face threats from convenience stores. Chicago-based market research firm Technomic Inc. found in its “Consumer C-Store Brand Metrics Shopper Insights Report” that a significant number of quick-service consumers are starting to view convenience stores in the same category as limited-service eateries for prepared foods and beverages.
Technomic’s study, which surveyed more than 3,700 consumers, found that 27 percent of respondents said that if they had purchased a meal from a convenience store somewhere else, it would have been from a quick-service restaurant. The same number of consumers said they would have purchased the meal from another convenience store.
Tim Powell, a director at Technomic, said 82 percent of survey respondents said they buy prepared foods or beverages from convenience stores once a month, and 52 percent do so once a week.
“Convenience stores are increasingly falling into the same consideration set as fast-food restaurants,” Powell said. “This really speaks to the enhanced foodservice offerings in convenience stores, as well as evolving consumer behaviors.”
Twenty-seven percent of consumers said they purchased an afternoon snack on their most recent trip to a convenience store, Technomic found, while 19 percent bought lunch on their last convenience store trip and 23 percent ordered just a beverage.
Impulse buying was a key factor in convenience-store sales, the data found, as 31 percent of respondents purchased a prepared food item at a convenience store only after seeing it on the premises and getting a craving for it.
Food and beverage sales growth at convenience stores has prompted several restaurant companies to expand their unit counts with locations in convenience stores or gas stations.
Yum! Brands Inc. said it will put its KFC, Pizza Hut and East Dawning brands in Sinopec gas stations in China, the company’s powerhouse growth market. The deal with Sinopec calls for 50 such locations to open over the next five years.
Convenience stores have been a particular target for Quiznos, which in 2011 opened more than 200 such locations featuring its signature toasted subs and on-the-go breakfast items to cover all dayparts. Quiznos has signed expansion deals with Hess Gas and Go in Florida, MAPCO in the Southeast and Champlain Farms in Vermont.
Several other restaurants are adding convenience-store units, such as Pizza Pro, a 550-unit chain based in Cabot, Ark., and sandwich chain Subway.
Milford, Conn.-based Subway counts convenience store units among its more than 8,000 “nontraditional” locations. Expanding outside freestanding brick-and-mortar units has become so commonplace for Subway that the chain no longer uses the term “nontraditional” to distinguish on-site units among its more than 34,000 total franchised restaurants.
Nation’s Restaurant News proprietary research found that convenience-store chains 7-Eleven, Wawa, Circle K, Casey’s General Stores and Sheetz generated enough food and beverage revenue to qualify for the Top 200 census in 2011.
According to actual or estimated results in the Top 200 report, the five convenience-store chains included in the most recent study had average growth in domestic systemwide food and beverage sales of 6.8 percent in their latest completed fiscal years and 6.7 percent in their preceding fiscal years. By comparison, the 40 chains in the 2011 Top 200 report classified as “sandwich” brands — McDonald’s, Burger King and Wendy’s among them — had average domestic systemwide sales growth of 3.3 percent in their latest fiscal years and 1.8 percent in their preceding fiscal years.
Contact Mark Brandau at [email protected].
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