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Restaurateurs, retailers battle for out-of-home breakfast bucks

C-stores and supermarkets are expanding foodservice offerings to hold onto their share of stomach as the balance of food dollars teeters more toward away-from-home food preparation

November 5, 2015

Competition for share of stomach has never been greater. The foodservice landscape seems to be in constant motion — literally when you consider pop-ups and food trucks, but competition is also coming from retail. C-stores and supermarkets are expanding foodservice offerings as the balance of food dollars teeters more toward away-from-home food preparation.

In the latest installment of Incredible Breakfast Trends, the American Egg Board (AEB) examined this new competition and how it's affecting where America eats breakfast.

"Breakfast all day is a definite opportunity for supermarket foodservice operations," said John Howeth, AEB senior vice president, foodservice and egg products. "Millennials are driving the trend for all-day-breakfast we’re seeing at QSRs, so it's only logical they'd look for breakfast items when they're at the grocery. Breakfast foods—especially egg-based ones—fit into any daypart."

The study found consumers are often turning to the c-store and the "grocerant" for breakfast needs.

C-stores

C-store operators are capitalizing on breakfast's popularity to transform people stopping for gas on the way to work into breakfast patrons. And it seems to be working. Mintel's 2015 report, Convenience Store Foodservice, reveals 32 percent purchased a made-to-order breakfast sandwich at a convenience store in the last three months.

Grab-and-go is still a required part of the c-store equation, so premade sandwiches are a must to capture customer attention. But made-to-order has become important in building relationships with new customers, especially millennials. Connections are made with patrons when the store employees customize their breakfast sandwiches. C-store managers are now required to have foodservice experience, according to the report.

The 'grocerant'

Grocery stores began introducing prepared meals in the 1970s, but it was three decades before the concept got real traction. Today, "grocerants," defined as grocery stores selling wide arrays of prepared meals, either for eating on site or taking home, are flourishing. According to NPD, while QSR dinner sales have declined, eating dinner at grocery stores rose to 1.8 billion visits annually in 2014.

Freshly prepared food items are often the highest-margin products in a supermarket. Innovation is evident in both foodservice offerings and operations, attracting customers with heightened expectations. Upscale deli items, trend-responsive prepared foods, soup and salad bars, and dining areas are common at grocerants, but breakfast food offerings are not as well represented as foods aimed at other dayparts, and thus have room to grow, according to the study.