News

C-stores continue to elevate foodservice offerings in market share fight

October 20, 2014

The National Association of Convenience Stores' annual show concluded last week in Las Vegas with some sessions covering the continued elevation of foodservice offerings in the segment, threatening market share from traditional limited-service concepts.

C-stores are pressured to evolve amid the increased expectations of global consumers, according to a presentation by Joseph Bona, president of branded environments at brand agency and retail design consultancy CBX, and Dan Munford, managing director of UK-based convenience and petroleum retail strategy specialists Insight.

"Strategic insight has never been more important, precisely because the retail world is changing so fast," Munford said.

Those changes, Bona added, extend well beyond the rise of ecommerce.

"For example, the phenomenon of channel-blurring has led to a proliferation of competitors from outside the traditional c-store sector," he said. "Whether you're talking about c-stores, QSR and fast food chains or pharmacies and grocery stores, all of these retail categories are chasing the same consumers. C-stores must raise their game."

In Europe and the US alike, a growing number of c-store chains now aim to accomplish this by offering dramatically improved food offerings, often in sumptuous settings relative to the c-stores of the past, Munford said. According to a September 2014 report by Nielson, fresh foods will account for up to 50 percent of category sales in Europe's next-generation c-stores, he noted.

Additionally US-based chains such as Wawa, Sheetz and Rutter's are developing more sophisticated store designs centered on higher-quality food, Bona said. 

"These chains understand that time-pressed consumers crave healthier and better offerings in both the foodservice and grocery areas," he said.

Two-fifths of consumers told Technomic they would visit convenience stores for prepared foods more often if freshness and quality were improved.

C-stores, however, are challenged not just to offer higher-quality food, but also to elevate the overall customer experience, Bona said.

"Coffee shops in the UK, for example, are booming, not because consumers are drinking more coffee, but because they fill a 'social venue' gap in society -- one that used to be met by pubs," he said. "Today's c-stores have the opportunity to do the same thing."

A central issue facing the c-store industry is whether to develop their own foodservice brands or to engage in brand partnerships.

"In the old days, people went to c-stores simply because they were easy to shop," Bona said. "Today, they're looking for something more. They want a pleasant environment, high-quality food, convenient locations, and, yes, good deals. The challenge moving forward is to exceed these rising expectations on all fronts."