Foodservice More Profitable for C-Stores

Foodservice is a key area of opportunity for convenience stores, as demonstrated by a recent study from Technomic.

As revenues from gasoline and tobacco products fall, foodservice sales are increasingly becoming convenience stores' most profitable category.

C-store foodservice is an $11 billion industry and the second-largest retail host foodservice category behind supermarkets. The c-store segment comprises about 29 percent of retail foodservice and almost 2 percent of the total foodservice industry. Technomic projects that c-store foodservice will grow nominally by 2.5 percent over each of the next two years.

“Convenience stores have shifted their focus to provide a wider variety of fresh, high-quality food offerings to help gain a greater share of stomach and compete with restaurants,” said Technomic Director of Research and Consulting Services Tim Powell. “At the same time, there seems to be significant room for convenience-store operators to generate increased foodservice sales by translating existing traffic into purchases.”

C-store chains are looking to better position themselves for continued growth in foodservice. Some chains are upgrading their facilities by integrating technology to enhance their offerings and the consumer experience. Differentiating themselves from the c-store crowd could better position themselves to compete with limited-service restaurants.

Technomic industry and chain data enables Technomic’s new market intelligence report to define the c-store foodservice segment, identify the leaders, analyze performance and identify trends.

Among the findings:

- More than half of today's consumers (52 percent) pick up snacks from prepared-food sections of convenience stores or mini-marts, compared to 37 percent in 2010.

- Almost one in four consumers (22 percent) occasionally has breakfast from a c-store during the week, compared to only 12 percent three years ago. Furthermore, 13 percent purchase breakfast from c-stores on the weekends versus 7 percent previously.

- While c-stores score well with consumers in terms of convenience, portability, and speed of food preparation and service, their Achilles heel seems to be the healthfulness of the food, which gets satisfactory marks from just 28 percent of those surveyed.

- During the week, just one in five consumers surveyed indicated that they purchase lunch from retail foodservice locations such as grocery stores (20 percent) and convenience stores (17 percent), while 56 percent purchase lunch from a fast-food restaurant.

Technomic’s Market Intelligence Report: Convenience Stores helps operators and manufacturers stay on top of current trends and evolving consumer needs by mining Technomic's exclusive consumer, menu and industry data to uncover insights and opportunities in convenience-store foodservice. This report includes data from Technomic's MenuMonitor online trend-tracking resource, which analyzes the menus of the top 40 c-store chains on a continuous basis. Consumer data culled from Technomic’s consumer trend reports and other Technomic studies is also included.

Visit Technomic online to purchase or learn more about this report.