Consumers turning in greater numbers to c-stores for their foodservice offerings
One could say it is something of a truism now that Canadian and American consumers are watching their spending more closely.
With stubbornly high interest rates and inflation, consumers across both sides of the border are looking for more ways to stretch their food buying dollars.
Technomic, Inc.’s recent Convenience-Store Foodservice Outlook report finds foodservice operators are competing more fiercely for those consumer dollars, especially as Canadian’s pull back from eating out. While this is putting pressure on quick-service restaurants who are seeing a drop in visits, convenience stores foodservice operations are instead experiencing increasing foot traffic and sales for their food offerings.
According to Donna Hood Crecca, principal and subject matter expert with Technomic, “convenience-store foodservice sales growth is projected to outpace that of quick-service restaurants and foodservice overall in 2024. Consumers appear to be increasingly gravitating to prepared food and beverage offerings in convenience stores, ramping up the competitive intensity between c-stores and QSRs, and making 2024 a potentially pivotal year for foodservice in convenience.”
In the Technomic study, nearly one-fifth (19%) reported increased foodservice item purchases at convenience stores compared to a year ago, with a strong number of those saying they decreased visits to fast-food restaurants (40%) and coffee/beverage shops (39%) as a result. Convenience store foodservice offerings are also becoming attractive to a wider range of consumers as well. The study finds that the shares of female, Gen Z and Hispanic/Latino consumers purchasing prepared food and beverages at convenience stores rose two points from 2022 to 2023. This seems to be the result of convenience stores placing a higher premium on creating a more welcoming and consumer-friendly environment and improving the mix and range of prepared foods and beverages on offer.
READ: These countries purchase c-store meals most often: Survey
“Gen Z is coming into its own with unprecedented foodservice options literally at its fingertips. It’s growing involvement with c-store foodservice offerings bodes well for continued category growth in the channel,” adds Crecca.
Another attraction of convenience stores according to the study is that emphasis on convenience. As they study notes, consumers are “busy with work, school and activities, the ability to check other tasks off their to-do list, such as fueling or charging their vehicle and picking up fill-in grocery items or an Amazon package, is also top of mind. In fact, 75% of c-store foodservice patrons prioritize the ability to multitask at the location.”
So the attractiveness of being able to do many things in one place, and the improved foodservice offerings at convenience stores give them a unique competitive advantage over quick-service restaurants.
When asked to rate foodservice segments visited on key attributes, a larger share of consumers rated convenience-store foodservice offerings as good or very good than said the same for price, freshness, cleanliness, quality and availability of unique items at quick-service restaurants, according to the study. The study also finds that up to 25% of c-store operators report plans to increase menu offerings across their varied prepared food and beverage formats in 2024, with menu updates focused on global flavors, dietary needs, and seasonal flavors and ingredients.
“That variety of food and beverage formats is another competitive advantage for c-store operators in the battle for foodservice occasions,” the study notes. “Today’s foodservice-forward c-store may feature foodservice formats that include cold merchandisers displaying sandwiches, salads and fresh snack items, as well as warmers/hot cases offering breakfast sandwiches, pot pies, burgers, burritos and chicken items. A plethora of customizable food and beverage menu items are available at made-to-order stations. And the roller grill, which is truly unique to the channel, can provide a quick snack or a meal at a value price. Extensive hot, cold and frozen beverages are typically offered to accompany food items or satisfy for a snacking occasion.”
