Convenience stores continually weigh proprietary or branded deli and sandwich programs. There’s a hungry market for each. Learn how to make c-stores deli destinations.
A CSD Staff Report
Ever since convenience stores began to target customers for immediate food consumption, two schools of thought have evolved concerning which method is best for presenting food: proprietary or premade, branded options.
“It depends on the customer,” said Robin Gabriel, coproprietor at Hinsdale, Ill.-based convenience retailer Hinsdale Shell. “Customers in a hurry—maybe they’re on their way to work, or maybe they’re running late—love grab-and-go. Customers that come in for lunch and have time are willing to wait to have a sandwich made fresh.”
Be it proprietary, grab-and-go, or both, there is no argument that a well-run foodservice operation is a key component in a convenience store’s profitability. Given the intense competition c-stores contend with day-in and day-out from fast-food restaurants and other gas and convenience locations, a compelling foodservice operation can often seal the deal.
“A unique food offer can help you distance yourself from the competition by offering something only found at your store,” said Joseph Bona, president and founding partner of New York-based Bona Design Lab LLC, a foodservice consultancy serving the c-store industry. “It can provide a sense of destination and drive customers past the competition and into your store.”
Take Wawa, for example. The Pennsylvania-based chain has built a solid reputation as a destination stop for food thanks largely to its fresh sandwich program.
“We did have some premade sandwiches,” said Lynn Hochberg, Wawa’s director of product development. “But we’re pretty fast, so we decided not to have a redundant product offer.”
That doesn’t mean one should discount the value of a clean, well-managed grab-and-go operation for customers on the run who simply want to grab something to eat and, well… go. Quality food, available in the time it takes to check out, can make your store a foodservice destination for the in-and-out customer. Indeed, many chains, such as 7-Eleven and E-Z Mart, depend on premade items exclusively for their foodservice offerings. Also, grab-and-go offers the ultimate in expediency.
“We do not do a proprietary program at any of our locations,” David Rolf, E-Z Mart’s director of purchasing, explained. “We only do food out of a hot box or a grab-and-go warmer, premade.”
Atlanta-based RaceTrac recently decided to transition from offering both proprietary and grab-and-go items to exclusively grab and go.
“Our guests told us that they prefer quicker food options to fit their on-the-go lifestyles, so RaceTrac has made the decision to shift our food offering to focus more on grab and go,” said Steve Turner, RaceTrac’s executive director, food programs and offers. Turner lists a wide variety of grab-and-go products available at RaceTrac, including sandwiches, pizza slices and breakfast sandwiches, a Swirl World frozen treat station and a “Crazy Good Coffee” bar with up to six blends of flavors and a variety of sweeteners and toppings.
“We are excited about the offer and think it provides a compelling reason to visit our stores, whether you’re on the go and looking for something quick, or you’re a destination guest looking for a full meal,” Turner said.
Even at Wawa, where proprietary reigns supreme, some grab-and-go offerings are available. Just not traditional sandwiches.
“We focus our express case on different things, such as items with more trendy ingredients and easy-to-grab healthy options,” said Hochberg.
For c-stores that see themselves in direct competition with fast food, it’s important to provide a similar dining environment. Toward that end, Hinsdale Shell offers space inside and outside the store for dining.
“We have tables inside,” Gabriel said. “It’s like a little lunch bar, and there are two tables customers can sit at. We also have a bench outside they can eat at.”
Another important ingredient in a c-store’s profitability paradigm: flexibility.
“If a customer asks for something not on the menu, we’ll make it for them 99% of the time if we have the ingredients,” Gabriel continued. “For instance, say someone doesn’t want bread on the sandwich—maybe they want it wrapped in lettuce instead—we’ll accommodate our customers any way we can. If someone wants an extra pickle slice on their sandwich, give them a damn pickle!”
Hinsdale Shell also prides itself on not up-charging its customers.
“A lot of places will charge the same price whether it has bread or not, continued Gabriel. “We’ll take off the price of the bread.”
In order to succeed with a proprietary initiative, efficient use of available space needs to be studied and executed, particularly for a c-store adding a proprietary initiative to an established grab-and-go program.
“You definitely need space,” explained Wawa’s Hochberg. “It all depends on what your focus is. Variety, speed and volume dictate your space.”
Efficient use of space is a key to profitability.
“It has to be easy for your associates to prepare the food properly,” said Hochberg.
And another kind of space needs to be considered, as well: plentiful parking. While a jam-packed parking may seem like a music to a c-store operator’s ears, in reality, it translates into lost profits during peak foodservice sales periods where prospective food customers might drive right past and visit a nearby McDonald’s, Burger King, Wendy’s or Subway instead.
“We see a direct correlation between parking and increased foodservice sales,” Bona noted. “Every parking spot that is perceived to be front of store can be worth anywhere between 0.75%-1.5% of additional foodservice sales. To drive more throughput, you need more parking.”
In terms of freshness, the c-store industry has come a long way over the past few years.
Tim Powell, vice president of consulting at Q1 Consulting, a Chicago-based firm that helps food companies develop proven business strategies, said fresh is definitely in.
“It’s improved versus five years ago, but only about 30% of stores really stress freshness,” Powell noted. “Clear packaging in clam shells and clear tops, black bottoms has improved the perception.”
And make no mistake, the market for items perceived as “healthy”—including “natural” and “organic” products—is enormous. Indeed, according to Euromonitor International, the London-based market research firm, North America is one of the two largest markets in the world for packaged health-and-wellness food product sales in 2017.
“Being natural is consumers’ priority, which helps explain why ‘free-from’ and ‘organic’ packaged foods continue to lead the way in the health-and-wellness space,” said Maria Mascaraque, food and nutrition consultant for Euromonitor International. “Consumers are seeking functionality in the food they consume, but only if it comes through natural ingredients.”
At Hinsdale Shell, a wide variety of salads have been introduced into the store’s foodservice operation for customers wanting to ingest something perceived as healthier. All are premade, grab-and-go items available to customers.
“We make green salads—chef salad, garden salad, Caesar salad, chicken Caesar salad and spinach salad,” Gabriel said. “We also offer homemade potato salad, two kinds of pasta salad, coleslaw, fruit salad and veggie trays.”
However, not everyone is on the freshness bandwagon just yet.
“I think the convenience store industry has, in general, a poor image for freshness and quality,” said Ed Burcher, vice president of foodservice at FriendShip Food Stores in Ohio and former president of Burcher Consulting.“The research that I have seen and been a part of shows that we do not do a particularly good job conveying or executing on freshness, and it is reinforced by our behaviors, product choices and merchandising.”
Powell agreed that c-stores have a long way to go to achieve the perception of freshness to consumers.
“This group does not like throwing coffee, sandwiches, salads or roller grill items away, which hurts everyone long run,” he said.
QUALITY OR CONSISTENCY?
One of the issues a c-store faces in offering a deli program is which is more important—quality or consistency? The short answer is both.
“Yes, quality and consistency go hand in hand,” said Bona. “You can’t have one without the other. You can’t deliver high quality one day and not another day. It only takes one bad experience to lose a customer that you may never get back no matter how hard you try.”
Hinsdale Shell’s Gabriel concurred, but admitted if she had to choose, it would be consistency.
“If a customer comes in and orders a Marty Special, loves it, and comes back two days later for another, they’re expecting the exact same thing,” she said. “That’s huge for us. We don’t want to be a one-trick pony. We want to do it all.”