Tough times call for creative measures. The stagnant economy and hefty cigarette taxes have more c-store chains expanding their foodservice segments and adding more roller grill items to provide a greater array of hot food options at a value price to sustain loyal customers.
“Customers automatically associate c-stores and roller grills. It’s been a source of great sales for us,” said Scott Huggins, a marketing specialist for San Antonio-based Tesoro Petroleum Corp. “The roller grill is our primary foodservice offering.”
Diversifying the Selection
As c-stores reach out to consumers through foodservice, many are including more ethnically diverse food choices in order to appeal to a broader consumer base, including a growing number of Hispanic customers.
In July 2007, the Hispanic population in the U.S. exceeded 45 million or 15.1% of the population. What’s more, 37% of Hispanics visit c-stores more than once a week. This means as c-stores expand their roller grill offerings beyond hot dogs, it’s imperative to keep in mind this demographic when choosing which products to offer. In addition, burritos, tacos, chimichangas, taquitos and quesadillas can attract non-Hispanic consumers as well.
According to New American Dimensions, a Los Angeles-based research company, 75% of consumers choosing ethnic foods today are not of the same ethnicity as the food’s origin. As non-Hispanic Americans become more accustomed to seeing ethnic food options, their palates are welcoming new taste profiles.
Consumers today also are used to having options. When multiple roller grills are cooking up everything from hot dogs to burritos, consumers are likely to get the sense that foodservice is important to that store. QuikTrip stores, for example, attract foodservice customers with a myriad of roller grill products from taquitos and egg rolls to various types of breadsticks.
The current expansion of roller grill choices began with the introduction of taquitos and toranados. Currently about 43% of all c-stores have at least one roller grill, but new offerings have prompted many retailers to add more grills.
As the health trend continues and Americans look for more low-fat, health-conscious options, including healthy foods can drive sales.
“Consumers are moving to healthier eating more forcefully today than ever before,” said Jim Schutz, vice president, Open Pantry Food Marts in Pleasant Prairie, Wis.
Foodservice on the Rise
It’s a good thing c-store operators are expanding roller grill programs. Data derived from annual NACS State of the Industry report, which polled 156 retail firms with 20,553 stores as of December 2008, found foodservice accounts for 4.2% of overall sales at c-stores, up 3.9% from the previous year, and accounts for 13.9% of the average monthly sales at c-stores, which totaled $114,010. Foodservice was the top merchandise category with a 2008 gross margin percentage of 52.1%. Within the foodservice category, hot prepared food brought in $11,618 in average sales.
“Consumers are moving into foodservice because their lifestyles are changing, and they are looking for more convenient, on-the-go products,” said consultant Dean Dirks, president of Dirks Associates in Washington. “Foodservice can help retailers today navigate through the tougher times and strengthen the long term viability of the store.”