C-stores the new Foodservice Challenger!?
By Dwayne Reno
First it was grocery retailers, now foodservice operators are about to welcome a not so new challenger into the mix. This challenger has been around for some time now and is a local hangout for customers young and old. The challenger is also well known to customers for being a convenient stop for a snack, something to drink and more recently freshly prepared foods. This week I would like to take a look at convenience stores and their plans to increase profits with prepared foods.
Introducing the third wheel
First let’s take a look at why C-stores, who traditionally have only been known for hot dogs and nachos, have decided to compete with fast food operators and food retailers.
Changing customer habits
C-store seems to be the perfect fit for time-strapped consumers who are looking for convenience and don’t mind spending a bit more to get it. Also with the cost of home ownership on the rise many Canadians are choosing to live alone more so then ever before.
Furthermore, many C-stores are seeing profits fall on staple items such as cigarettes and gas, largely due to consumers becoming more health conscious and cars becoming more energy efficient. So with changing consumer habits and the global fast food market expected to reach $743,859 million by 2022, HERE, competitively priced prepared food seems to be a nice fit for C-stores who are looking for new ways to grow profits.
What C-stores are doing right
A recent study by the NPD Group found that C-stores make up 10 per cent of the QSR market and are attracting a much younger crowed than traditional fast food operators. This is largely due to that fact that c-stores can sell more varieties of prepared foods and at a cheaper price point then fast food operators. NRN also reported that the average C-store food purchase was $2 less then at traditional fast food operators, HERE.
Also it turns out that c-stores who traditionally have been mocked for their dry hot dogs and nachos are ramping up their prepared food offerings. Wawa, a Philadelphia based C-store chain offers a full breakfast menu, soups, subs, salads and sandwiches, HERE. Furthermore, the very popular 7 Eleven chain has started selling pizza, chicken wings and fried chicken, HERE. By targeting single and value hungry Canadians, C-stores have made themselves into a very formidable challenger who should not be overlooked by foodservice operators.
What can fast food operators do to stay ahead?
C-stores have also been aggressively competing with grocery stores as well as fast food operators. Although profitable competition with food retailers has taking much needed real estate from prepared foods in favor of in-store grocery aisle and displays. This lack of kitchen space leaves many C-stores chains unable to grown beyond only a few freshly prepared menu items.
Foodservice operators should continue to focus on fresh quality ingredients and seasonal menu items to keep customers interested. Also personal touches such as frosted mugs and strong customer service will keep foodservice operators front and center as the foodservice wars heats ups in 2017.
Until next time your customers want to know why they should spend money at your restaurant, bar or cafe. So give them the goods!
Dwayne Reno CEO & Founder
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