By: Elie Y. Katz | January 3, 2024

Foodservice and providing an outstanding customer experience will help retailers excel in the upcoming year.

As we begin 2024, it is the ideal time to look back at the past 12 months to hone in on the challenges retailers faced and look ahead to forecast the sales trends retailers can expect to see over the next year.

It was relatively easy last year to predict that foodservice would continue climbing up the sales chart, but the story here is just how popular delivery has become with consumers of all ages. The onset of COVID accelerated this trend, but once the trend took hold, it blossomed. With the invention of food delivery apps, ordering from your favorite foodservice provider has always been challenging. More importantly for retailers, food represents a big opportunity for the foreseeable future.

Home delivery is all about convenience whether you run out of food at home or don’t own a vehicle. According to a survey by UpgradedPoints, more than 78% of participants use delivery services every so often, while just 21.2% say they never order delivery.

The survey found that Americans spend over $1,566 annually on food delivery services, with an average order cost of $35.42. On average, they order 3.7 times monthly, and delivery eats up 3.7% of their annual income.

When ordering delivery, participants are most often in the mood for American (26.8%), pizza (23.2%) and Chinese (15.3%) out of every other type of cuisine. Regarding the most popular food delivery app, we found that DoorDash was the most widely used (45.5%), followed by direct orders placed through the restaurant (21.1%).

Some Americans take their food delivery game seriously, with 23.5% members of delivery programs like Grubhub or Uber One. An Uber One membership offers attractive benefits like a $0 delivery fee on Uber Eats and up to a 10% discount on eligible Uber Eats delivery and pick-up orders.

Food for Thought

For the upcoming year, categories other than food with notable growth projections include vaping products, coffee and confections. While keeping ahead of the trends is important, retailers must heavily emphasize category management.

With the average convenience store stocking thousands upon thousands of SKUs, real-time scan data must be used to improve all phases of store management. Remember, delivery is not just about foodservice, but all products stocked in stores.

Since consumer behavior and motivations can differ dramatically, marketing effectiveness should differ systematically across each category. As your customers realize and experience delivery from your store, the greater the opportunity you will have to increase profitability. These issues are key to any formal category management process where retailers must define each category’s role in a retail strategy.

Effective category management requires retailers to understand where to allocate scarce marketing resources to get the biggest bang for the buck.

This is one area c-store owners have typically excelled. However, a prolonged weakened economy creates concerns about consumer spending. For many operators, after surviving COVID-19, tight economic conditions are another obstacle they’re forced to overcome with the same patience and poise they displayed while dealing with issues like tobacco regulations and excessive credit card fees.

In fact, among many retailers, there is a certain degree of optimism for 2024.

Restaurant owners, for example, have a growth mindset. Nearly three in four restaurant operators reported business conditions are already close to normal or are well on the path, and the focus is on sustaining growth in the coming year, according to the National Restaurant Association (NRA). Its annual survey found that 84% of consumers said going out to a restaurant with family and friends is a better use of their leisure time than cooking and cleaning up.

Convenience retailers are well aware of the threats that their traditional business models face. Many are making the necessary investments to enhance customer services, expand product offerings and engage consumers in more relevant ways to improve their competitive position in 2024.

Focus on improving the customer experience. If you ask someone about a good experience they had at a restaurant, they’ll almost never tell you how good the food was — they will tell you how they were made to feel.

C-store customers want the same experience. Focusing on what feelings you want to convey as a foodservice provider, such as quality, consistency, image, culture, etc., is as important as the food you serve.

Keep that in mind when planning for the future. The outlook is promising especially considering the state of the economy. Retailers who have grown since COVID-19 are well prepared to win a greater market share in the coming year.

Elie Y. Katz is the CEO and president of National Retail Solutions (NRS).

Source: CStore Decisions