Inside the Numbers: Rutter’s FARM Stores
200+ Number of prepared food combinations available at any given time.
6 New prepared food items added to Rutter’s menu in February 2010.
5 Prepared food items dropped from Rutter’s menu in February 2010.
20% Store sales from prepared foods in the 37 Rutter’s locations equipped with order kiosks.
As the economic downturn eases, the restaurant industry will see a gradual improvement in 2010, according to the National Restaurant Association’s (NRA) 2010 Restaurant Industry Forecast. Industry sales are expected to reach $580 billion this year, up 2.5% in current dollars over 2009. However, NRA is forecasting a nearly 5% increase in the convenience store segment, which is nearly double the 2.5% jump forecasted for the food industry overall.
This bodes well for c-store operators with growing fresh food programs. Capturing their “fare” of the prepared foodservice demand is heavily dependent on execution.
“Growth is really triggered by quality, variety and price/value,” explained Jerry Weiner, vice president of foodservice for 54-unit Rutter’s Farm Stores in York, Pa. “It is variety that prompts frequency of visit, which is a big part of growth. The quality is necessary because the dollar is being watched much more closely and wherever they spend it they’re going to want to get as much in terms of quality and value as they can.”
Going forward in 2010 and beyond it is incumbent upon operators to make sure all of those essential ingredients are present, Weiner added, by “doing your homework, focus groups, learning what your customers want, looking at competition that is successful and a lot of testing and trial.”
How much is enough? “Here at Rutter’s there is no end. When I develop a product I make sure we can execute it,” Weiner said.
For example, to give a new item a fair shot at being successful, it executes an initial two-week test in a single store to nail down the operational brass tacks. The next step is a five- or six-store test for six weeks.
At that point, Weiner said, “it has to reach certain average sales per store numbers in order for me to continue with it. Once that’s done, and I’m confident that the procedure is correct, then the expansion of the test is more for the consumer feedback.”
Indeed, Weiner insisted, the most common mistake made by c-store operators is simply that they haven’t done their homework. “Some operators don’t understand what they have to do from the corporate side in order to make a wonderful food program actually work and be profitable. It’s about infrastructure support and understanding the cultural change that has to happen at the store on an operational level in order to execute food.”
Those two pieces, Weiner continued, “are crucial. It doesn’t matter how much money you spend or how indepth or not you get into food. It doesn’t matter if it’s a simple grab-and-go program or a complex prep and assemble-to-order program. I don’t care what food you’re selling—chicken, pizza or sandwiches. If you don’t understand the cultural change that has to happen operationally and the amount of support on the infrastructure side that you have to devote to that program, then that’s the biggest failure.”
What some operators may not be doing well enough is building trust in shoppers that they do operate a quality program, suggested veteran consultant David Bishop, managing partner with Balvor LLC in Barrington, Ill., a retail marketing and research firm.
“What they could be doing better besides the normal rotation and watching their codes is promoting the quality ingredients that they use in those products,” Bishop said.
Repeat business will come naturally, Bishop continued, if the quality and value proposition are there. “In other words, the mistake retailers make is to say, ‘OK, I’m going to promote this free with the purchase of something and they’re going to try it.’ If I don’t have a high-quality product that satisfies my customers’ needs, they’re probably not going to come back and buy it again.”