Convenience stores give restaurants a run for customers’ money

 
June 29, 2010 | by Jennifer Litz

A new report by foodservice consultant Technomic finds that the c-store segment nominally grew by 1.5 percent in 2009. That doesn't sound like a ton of growth, but it has specific implications for the restaurant industry.

“Convenience stores are investing in prepared foods, which is putting increased competitive pressure on quick-service restaurant chains,” said Darren Tristano, EVP at Technomic.

Examples of upgraded foodservice offerings and facilities Technomic put forth in its c-store foodservice report include 7-Eleven, which began offering takeaway pizzas in more than 1,000 units last fall. Lesser-known foodservice gains at c-stores include Cumberland Farms' new foodservice-focused concept store, which includes a complete all-day prepared foods island with breakfast sandwiches, baked goods and pastries; a variety of to-go salads, fruit cups and yogurt; and a wide selection of sandwiches, including toasted flatbread sandwiches and pizzas.

But perhaps nobody has as much ability to go head-to-head with restaurant innovations and quality as Hunt Brothers Pizza.

Earlier this year, the Nascar sponsoring company brought on Brian Osborn, veteran R&D expert from Buffets Inc. and JTM Food Group. Obsorn described to Pizza Marketplace the brand’s plans to make pizza a much bigger player in the c-store space, and ultimately to make that space more appealing to consumers overall.

“I believe in the trickle-down effect,” he said. “We want to have food at the level of dining that is above us, and deliver that to our customers.”

Though Osborn was tacit about the specific product innovations the company is working on, he promised it nothing short of revolutionary, from the types of flavors offered in the space to the way it’s presented. He promises regional and global flavors, and “out-of-the-box-thinking” with innovative delivery systems.

If they are successful, the company indeed has the opportunity to reshape how people think about c-store food: It has 6,400 locations across 28 states.

“The biggest challenge in the segment? C-stores rely on gas for revenue,” Osborn said. “Food has proven to be profitable for them, but c-store operators are not food people. But they have foot traffic that other restaurants don’t have. Our industry needs to recognize and understand the food business better.”


Topics: Business Strategy and Profitability , Equipment & Supplies , Food & Beverage , Franchising & Growth , Operations Management , Trends / Statistics


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