Retailers that position their stores as foodservice destinations are making a promise to offer fresh, enticing meals and snacks day and night. It’s a promise they can’t afford to break.
By Marilyn Odesser-Torpey, Associate Editor
Research shows that consumers are increasingly turning to convenience stores for their meals. In its September 2017 “North American Convenience Store Consumer Study,” consulting firm AlixPartners reported that the frequency of consumers purchasing a meal at a c-store has increased by 13.2% since 2012.
Consumers who participated in the study also indicated that foodservice is now the primary driver for their in-store purchases in the past 12 months. The top factors consumers consider in selecting a c-store to purchase a meal are price, quality, speed and variety. Older consumers are heavily focused on location and convenience, while Millennials and Gen X both identify price and food quality as their top considerations.
At the same time, however, there is also a large percentage of the population who still view c-stores as simply snack stops. According to Eric Dzwonczyk, co-head of the restaurant practice at AlixPartners, by beefing up their menus and using every opportunity to promote their mealtime food offerings, retailers around the country are demonstrating that it is possible to break through that mindset.
“In some markets, certain convenience stores have raised the bar for foodservice by showing consumers what good really looks like,” he said. “To compete, others need to catch up.”
GRAB AND GO
Though made-to-order immediately communicates freshness and generates buzz, stores that don’t have the space, labor or budget for it don’t have to be left out, said Dzwonczyk. Instead c-stores with off-site proprietary kitchens or commissaries that deliver food to the stores or even stores that have strong relationships with quality-oriented outside suppliers can become foodservice leaders in their markets.
Kwik Trip, which has 550 convenience stores in Wisconsin and Minnesota, is a prime example of a grab-and-go-only operation that has firmly established itself as a food destination in its markets. In fact, when the company recently acquired PDQ Stores in the Wisconsin cities of Madison and Milwaukee, customers came in looking for their favorite sandwiches and burgers.
Kwik Trip is no stranger to fresh foodservice. The company has been focusing on this category for the past 15 years. Grab-and-go is the route Kwik Trip took because that is what customers want.
“Our customers expect the speed of grab-and-go,” said Paul Servais, Kwik Trip’s retail foodservice director. “If we would switch, it would be painful, even if we ask them to only wait for an additional three to five minutes.”
Cold fresh-case foods such as sandwiches, subs, salads and fruit parfaits are prepared in a proprietary off-site kitchen and delivered to the stores daily.
Pizza is available for take-and-bake or baked in the stores to be sold whole or by the slice. Hot foods, such as breakfast sandwiches, burritos and burgers are cooked in the stores’ kitchens. Every day one hot item is selected for sale at “a significantly reduced price,” Servais said.
Foods from the stores’ Hot Spot are such big sellers that the company has to keep adding shelves to the display. The company also has its own bakery where pastries, doughnuts, cookies, bars and other desserts are produced for delivery to the stores.
With the goal of getting more consistently good food out in less time, every year Kwik Trip budgets between $1 million and $2 million for store kitchen equipment upgrades. Recently, the company replaced its Turbo Chef ovens with an upgraded TurboChef I3 Convection/Microwave model.
“We’re constantly reinvesting in our stores,” said Servais.
In addition to speed and convenience, the company is always looking for ways to tempt their customers with new items and flavors. Limited time offers (LTOs) make it easy to deliver more variety.
While some customers are looking for “better for you” sandwiches, salads and snacks, many still want their pizza, cheeseburger and chocolate milk, Servais said. Where the health trend is going for a growing number of consumers, he predicted, is toward “clean” ingredients—without GMOs or anything artificial.
FRESH IS BEST
Burritos are a signature item that carries through the breakfast, lunch and dinner dayparts at Kent Oil Co.’s Kent Kwik Convenience Stores in west Texas, New Mexico and Oklahoma. Five different breakfast varieties are available, made-to-order in-store at 16 of the chain’s 44 locations and delivered daily from the company’s proprietary commissary for the rest.
“We emphasize freshness in all of our stores,” said Stormy Williams, Kent Kwik’s director of operations—foodservice division. “In our advertising for our stores that don’t prepare their own food we point out that it is made fresh in our own commissary.”
Since April, the chain has been featuring breakfast, lunch and dinner bowls. For breakfast, the bowls may be composed of seasoned potatoes, bacon, sausage or chorizo, egg and cheese or sausage with white gravy. Lunch and dinner choices are meat loaf or pot roast with mashed potatoes, gravy and corn.
Breakfast is still the most popular meal of the day at Kent Kwik, but the lunch daypart is growing, especially in the 16 made-to-order locations that offer burgers and fries and chicken tenders. To build dinner business, the retailer promotes a chicken tender meal for four people.
MAXIMIZING MARKETING
Consistently extensive promotions help Nittany Energy’s 25 Nittany Minit Marts in Pennsylvania that have foodservice grow sales throughout the day. Everything for made-to-order and grab-and-go including hoagies; hot, deli and breakfast sandwiches; wraps; pizza; salads and tacos and taco salad is prepared in the stores’ kitchen. Nittany Energy operates a total of 26 stores.
Pizza is experiencing exceptionally strong sales, a fact that Angela Gearhart, the company’s foodservice category manager attributes to more promotions. The pizza is widely touted on billboards, signage in the stores and on the windows, and on Nittany Minit Marts’ website.
“When a customer buys a foodservice item, we put a stuffer in their bag showing the other foods we offer,” Gearhart said. “We’ve been tracking our food sales numbers since we began our promotions and we have noticed a significant increase.”
“Whether they’re buying breakfast, lunch or dinner, customers are looking for value—great food at a great price,” she said. “And that’s exactly what we give them.”
Price promotion, whether coupons or buy one product, get one free, is one of the most valuable marketing tools c-stores have, agreed Dzwonczyk.
“Just look at the way fast food restaurants promote their products,” said Dzwonczyk.
