Convenience stores excel at foodservice sales

Foodservice is a key area of opportunity for convenience stores (c-stores). As revenues from gasoline and tobacco products fall, foodservice sales are increasingly becoming convenience stores’ most profitable category.

November 29, 2012

Foodservice is a key area of opportunity for convenience stores (c-stores). 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% of retail foodservice and almost 2% of the total foodservice industry. Technomic projects that c-store foodservice will grow nominally by 2.5% 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 Tim Powell, Technomic Director of Research and Consulting Services. “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’s new “Market Intelligence Report: Convenience Stores” finds that more than half of today’s consumers (52%) pick up snacks from prepared-food sections of convenience stores or mini-marts, compared to 37% in 2010. 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% of those surveyed.

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