There are numerous obstacles to growth in the convenience store foodservice space. Overcoming them starts internally by understanding the type of foodservice program that is best suited for a particular brand.
Due to space constraints, availability, quality of labor, quick-service restaurant competition, rising costs and more, a brand’s foodservice program must become something that can be executed whether it is grab and go or more of a customized quick-service platform. In any case, growth can’t occur if there is inconsistency of product and service that does not meet the standards of today’s consumer. The key is to address any obstacles and move forward with a winning foodservice program.
Here are six obstacles to growth in foodservice and how to combat them.
1. Trying to be everything for everybody. Solution: Simplification.
Almost four years ago, we were faced with the beginning of the COVID-19 pandemic, and simplification became a critical focus to moving forward.
Bloated menus and complicated systems made execution virtually impossible. Adding additional ingredients and additional menu categories was a problem pre-COVID, but foodservice operators did not recognize this problem. It took a pandemic for operators to understand that going back to your roots and keeping the menu simple and easy to execute was the way to go. This premise has not changed in four years and is likely part of the “new normal” for foodservice. If a menu item is not great every time and is not profitable, it needs to be eliminated.
2. Intense competition. Solution: Differentiate.
There will always be competition, and the focus for convenience store foodservice operators is to decide where they want to compete. Just because there are lines at the Chick-Fil-A down the street doesn’t mean that it is prudent to try to compete with them. In fact, the right decision may be to avoid chicken sandwiches in general. It is more about how you differentiate your menu items from your competition, which ultimately leads to growing
your business.
Take, for example, a burger. There are many elements to a burger including the burger itself, the roll, cheese, lettuce, tomato, sauce and condiments. How do you differentiate what is considered a commodity menu item by consumers? How you approach this is the “secret sauce” to winning over the consumer.
3. Staffing challenges. Solution: Invest in retention strategies.
In order to have growth in convenience store foodservice, there must be a fully staffed team that can execute all menu items. This includes store management. It is up to the company to make it enjoyable for a team member to come to work and provide a quality work-life balance. Staff can’t be held accountable without proper training, and they should have the opportunity to increase their value by learning multiple stations and being an advocate for your brand to the consumer.
Retention is the key and regular interaction with management on ideas and improvements goes a long way.
4. Rising costs and decreased customer spending. Solution: Competitive pricing.
Rising costs on many items is a given. It is more about the operator’s approach to rising costs. If all an operator does is raise their prices to maintain their margins, this will result in customer counts declining. While the consumer understands that many costs are rising, they do not have the wherewithal to continue to pay more for their foodservice. Working closely with supplier partners on competitive price as well as cost saving alternatives can help put items on the menu at a price the consumer will pay.
Innovation must always continue and be priced right and be profitable. This is always a challenge, but having sustainable growth requires it.
5. Declining traffic. Solution: Prioritize consistent execution, value and rewards.
Declining customer traffic remains the most critical business issue today for foodservice. It is followed closely by maintaining customer traffic. Improving traffic and maintaining traffic can’t happen by offering up lost leaders, which have a negative effect on profitability. Ultimately it is about consistent execution, providing fair value and reward customers for their loyalty.
Consumers have many choices where they can spend their hard-earned dollars on foodservice and beyond. They want over the top engagement from team members and a simple process to order, pay and pick up their food and beverage items.
6. Finding great real estate. Solution: Deal with outdated locations.
It is hard to grow if you select mediocre real estate. Convenience still reigns supreme when you think of convenience stores. If it is easy to get there, the consumer will come. The issue continues to be whether they will come back.
When it comes to foodservice, customers always prefer the “shiny new toy.” A new or recently upgraded store alone will not drive food growth, but it does make the food and beverages appear much better than at an outdated store.
Outdated locations are a definite obstacle to growth. Operators have to pick and choose where they can renovate. If foodservice is part of these older locations, it must be executed the same as at a newer location, or the menu or service systems should be adjusted accordingly.
Bruce Reinstein is a partner with Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm. The firm works with leading foodservice operators, suppliers and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. Join the Emergence Convenience Foodservice Group and get two detailed reports per year and the potential to attend Kinetic12’s April and November foodservice forums. For more information: Kinetic12.com or [email protected].