The Convenience retail channel is reaching a turning point.
A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have. C-store retailers with existing foodservice programs must continue to evolve their offerings to meet the more demanding needs of today’s consumers, and those without foodservice programs must jump in fast to survive.
Although the evolution of convenience foodservice caught some by surprise, it’s been a long time coming, according to foodservice consultant and c-store industry veteran Jerry Weiner.
“This foodservice issue has been moving toward a ‘must-have’ for several years, even decades. I think now, more so than ever, you will need a high-quality food offering to have any success at all,” said Weiner, who has 45 years of experience in managing foodservice programs for both convenience stores and restaurants.
The consumer has changed, too, and seems more willing to try convenience foodservice and “less likely to denigrate it to ‘gas station food,’” noted Tim Powell, managing principal of Foodservice IP, a research-based management consulting firm that specializes in foodservice.
To develop a distinctive foodservice identity and not just a program that blends in with all the other food programs out there, a c-store retailer must have excellent food, a super friendly staff, a clean store and innovative limited-time offers, and be constantly using social media to connect with end users in a productive way, not just selling, according to Powell.
“They must think like restaurants for the food portion, but a grocery store for commodities,” he said. “It’s not an easy task. Each brand has a different mission and perception by its patrons.”
A distinctive, high-quality foodservice program is no longer a want-to-have for a convenience store operator, it’s a must-have.
Advances in Convenience Foodservice
Kevin Smartt, CEO of Spicewood, Texas-based Texas Born (TXB) — honored as Prepared Foods Innovator of the Year in the 2022 Convenience Store News Foodservice Innovators Awards — recognizes high-quality foodservice as a key driver in bringing fuel guests into the store.
“Our industry is often criticized for serving unhealthy foods and being unclean. C-stores trying to break through this stigma are offering healthier, fresh snack and meal items like take-home salad kits, veggie kits, sandwiches and fresh fruit,” he explained.
Smartt also noted that offering multiple modes of receiving meals, such as prepackaged grab-and-go options, theater-style made-to-order stations and mobile ordering availability, is enabling c-store retailers today to better compete against quick-service restaurants (QSRs).
Additionally, he pointed to the increased use of technology in a variety of ways as the most important advancement in the prepared food space over the last 10 years. This includes mobile ordering, self-checkout stations, artificial intelligence (AI) technology to quickly identify store needs, customizable mobile apps and loyalty programs.
Although the COVID-19 pandemic served as a huge catalyst for these advances due to customers shying away from human interaction and high-touch areas, their usage has stayed high even as pandemic protocols have slowed or disappeared entirely.
“These are all extremely valuable tools to ultimately help our guests get in and out of the store as efficiently and comfortably as possible, while taking some of the pressure off our employees as well,” Smartt said.
The role of technology in food at convenience store retailer Casey’s General Stores Inc. is also growing, said Art Sebastian, vice president of omnichannel marketing for the Ankeny, Iowa-based chain of 2,500 stores in 16 states. Casey’s has been honing its handmade pizza program for more than 35 years.
The intersection of technology and food has been growing “over the last four to five years as we’ve assembled a new leadership team and started down this journey of becoming bigger, bolder, more contemporary both on the guest-facing side, but also on the team-member side as of late,” he shared.
Sebastian anticipates technology becoming more and more integral to the category.
“On the consumer side, we know that the role of technology in lives in general continues to increase, right? The stats around how many U.S. adults have a mobile device, the stats around how many hours they spend on the mobile device, the blurring of apps. Now, you can transact through social media channels directly. You can one-tap order. There are so many ways to order. So, for consumers, there’s a significant amount of change in that space,” he explained.
A Chicago native, Sebastian has been pleasantly surprised by how quickly Casey’s guests have embraced technology. “I will bust the myth that rural America doesn’t use technology. They do. And that’s proven to us statistically in the fact that 6.3 million rewards members have downloaded our app and elected to engage with us digitally,” he said.
“I will bust the myth that rural America doesn’t use technology. They do.”–Art Sebastian, Casey’s General Stores Inc.
“And we’ve shared in past earnings calls more statistics around our growing digital business that’s coming from our rewards members ordering in the mobile app,” he continued. “So, we continue to see mobile app usage, both for ordering pizza but also participating in our rewards program — and that means saving offers, using unique one-time-use offer codes, playing the games that we built in our app experience, and so on.”
On the team-member side, like many c-store retailers these days, Casey’s is taking on the challenge of making its employees’ jobs easier and more efficient. Sebastian likes to call it “the shift from clipboard and pen to technology-enabled ways of working.”
“For us, that’s going to continue to grow because we have to be efficient in order to keep up with the growing volumes our stores are seeing,” he said. “And as you know, this labor market is a challenging market and you’ve got to be a good place to work in order to keep your talent. A good place to work does not involve clipboards and pens; it involves what most team members are used to now: applications and technology.”
No End in Sight for Evolution
Looking ahead to the next 10 years, Weiner expects “a great ride for those out there that are working in foodservice.” The use of more high-quality ingredients and more creativity in the product offering are on the horizon, he said, while the days of “fresh food” equating to a frozen packaged burger or breakfast sandwich being microwaved and placed in a heated grab-and-go display are “basically over.”
“Fresh prepared and assembled onsite is the future,” he predicted. “Made-to-order and/or some level of hot and cold grab-and-go is where this goes in the near future and for the long run, dinner plates of a complete meal will be part of this. Snacktime offerings will also encompass high-end foods and sides that can be a snack or an add-on to a meal.”
“Fresh prepared and assembled onsite is the future.”–Jerry Weiner, Foodservice Consultant
Smartt envisions a similar future. “Especially competing with QSRs, it’s critical c-stores are innovating in this space as customers are grabbing and taking meals home now more often than ever. We expect the future to also be filled with fresher options. No longer will guests have to decide between convenience and health or flavor,” he said.
The chief executive also foresees “added convenience” as a major focus for the next decade. “The future of c-stores is improving guest convenience options,” he stated. “This will mostly be through mobile ordering, mobile payment, third-party delivery and simple pickup options. For example, we’ve begun adding heated food lockers for easy, quick pickup.”
The nation’s transition to electric vehicles (EVs) and the rollout of EV charging stations are poised to have a major impact on convenience foodservice as well, making it even more important to prioritize fresh food as a means of drawing customers in.
As Smartt pointed out, it’s “not only providing EV charging stations, but finding ways to make EV guests comfortable. They charge their cars for at least 20 minutes as opposed to gasoline cars needing only a few minutes. How can we appease EV fuelers to choose our location to charge? Is that enticing them with healthy meal options and providing comfortable places to sit and eat while their car charges?”
Regarding the future of convenience foodservice, and particularly how the shift to electric vehicles will impact the business, Powell believes it’s all going to depend on how quickly convenience stores can make the transition. Parking garages are now mostly empty and aspiring entrepreneurs will see this as an opportunity to develop car charging destinations, he said.
“We will likely see less dependence on fuel as driving consumers in. If c-stores can be the go-to spot for EV charging, then coffee and bakery products will be popular,” Powell added.
Weiner speculated that while the transition to EVs is “the inevitable future,” it will likely take at least a generation for its effect on c-store foodservice to be measurable. However, the change will be felt gradually as the upward trend continues over the years, with EV charging becoming increasingly available at QSRs and fast-casual restaurants, plus drugstores, dollar stores and more.
“Their availability will make it imperative that c-stores have a destination offering other than gas to get customers on the real estate, and some form of inside seating that will also make the stop of EV charging and eating a viable alternative,” he said.
Keeping the Focus on the Customer
To stay on top of consumers’ foodservice wants and needs, technology will be essential.
Smartt sees the rise of AI in retail as another opportunity for convenience stores to evolve and improve. TXB is testing SparkCognition’s Visual AI Advisor solution at its Georgetown, Texas, store. This solution enables it to learn the store’s demographic mix of shoppers; where and when people traverse the store and spend time; service-level measures at the foodservice and checkout counters; and movement of customers from the forecourt to the store.
“This is extremely insightful for us as we’re able to identify when shelves are low on product faster, how many times someone has entered the restroom and how often we need to go in and clean, when there is a line at the register and more employees need to be at the counter to help checkout, etc.,” he said. “We’re excited to keep working with SparkCognition and their technology to further improve our customer service.”
Keeping the focus on the customer is a vital part of developing a foodservice identity that enables a c-store retailer to stand out instead of blending in with the competition.
“Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer,” Smartt advised. “You will quickly identify community needs, preferences and ultimately gain their trust.”
Retailers who are looking to develop a distinctive foodservice identity should always start with the consumer.–Keven Smartt, Texas Born
Weiner suggests c-store operators study their competition and take note of what is working — and what isn’t. “I don’t mean to suggest that you should copy them. The last thing I believe in is a ‘me too’ approach,” he clarified. “However, looking at what they are doing that appears to be working will help in leading you down a path.”
Food that is new and different can yield very positive results.
“I am a great believer in unique but executable food,” Weiner said, recalling an instance where his company launched a fresh-off-the-grill cheesesteak in a region where no one else offered it. “Don’t be afraid to step out of the typical c-store box, but ensure you are keeping it high-quality and fresh.”
Source: Convenience Store News