News

Convenience stores positioned for foodservice growth

November 30, 2012

According to new research from Technomic, foodservice is a key area of opportunity for convenience 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 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 Tim Powell, director of Research and Consulting Service at Technomic. "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.

Technomic's Market Intelligence Report: Convenience Stores report highlights include:

• 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 quick-service restaurant.

Read more about trends and statistics.