Foodservice Remains the Key to Future Success

JohnNewBy John Lofstock, Editor.

While trendy items like electronic cigarettes and energy shots offer convenience store retailers a respite from depressed tobacco and fuel margins, it should be perfectly clear to all store owners that developing a great foodservice program is what it will take to remain profitable in the future.

Convenience store operators are driving sales of healthy, portable foodservice offerings like packaged sandwiches, wraps, salads and some roller grill items. But, historically, the industry has seldom gotten the attention it deserves for its healthy food options. Changing that perception, and making consumers aware of the healthy items c-stores carry, will take some effort.

That’s because a whole different mindset is required when it comes to working with perishable products. This is an area that c-stores need to understand and perfect to boost fresh food sales. I’ve had several executives at top-quartile c-store chains tell me that over the past five years they have shifted their mindset from convenience store operator to foodservice operator. Not even a dual focus anymore. Strictly foodservice. Rutter’s Farm Stores, for example, looks to recruit restaurant managers to run their new sites. They bring an entirely different focus to the operation, including separate foodservice profit and loss statement, training programs and recruiting tactics.

Focusing on the Food
Tim Powell, director of research and consulting services for Chicago-based Technomic Inc., said there is a growing demand for healthy fare in the form of fresh-cut fruit, salads, grilled and fewer fried products in convenience stores.

“Industry leaders in foodservice like Wawa, Sheetz and Quick Chek have developed a tolerance for waste and accepted that if you offer fresh foods consistently, eventually—as new customers walk through the doors, especially females—you will eliminate the perception that only old hot dogs and burnt coffee are awaiting them,” Powell said.

When Datassential interviewed 75 c-store decision-makers, they found that 40% said consumer perceptions are a potential issue affecting their foodservice growth.Three-quarters of these operators said creating a more premium perception around their food was an objective of their foodservice program.

About 40% of the operators said they currently offer some kind of pre-packaged/grab-and-go salad and approximately 30% offer fruit cups. Around 20% said they would be interested/would consider adding fruit cups or cut-up vegetables and 15% indicated they would consider adding salads.

C-store shoppers are willing to pay more to get the fresh, quality deli sandwiches, wraps and salads they want, the Datassential study showed. When the researchers showed price points for various items and asked consumers to state their likelihood to pay that amount, pay more or pay less, about one-third of them said that $5 was the right price for a sandwich, wrap or salad. More than 40% said they would be willing to pay more for an item they felt was fresh and good quality. Breakfast, however, is another matter. Nearly two-thirds said that $2 was the right price for a breakfast sandwich. Few were willing to pay any more.

The bottom line, Powell said, is that the convenience store chains that will be successful with their foodservice programs must evolve into offering healthier items. “Others will simply perpetuate the perception of a gas station with food if they don’t expand and rotate menus,” he said.

So as you prepare to head into your 2014 strategy meetings and you’re looking for that next big trend to help you ride a wave of profitability, begin with evaluating your food program. It doesn’t have be vast and it doesn’t have to be all things to all people. What it has to be is fresh, quick and affordable, and it has to be served by outstanding employees that truly care about the customer service experience. It’s a challenge that will keep you awake at night, but it’s a challenge you can’t afford to ignore.

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