Focusing on Foodservice Basics

By: Zhane Isom | July 5, 2024

Retailers are brainstorming new and innovative ways to enhance their pizza, chicken and roller grill offerings as foodservice continues to be a heavy hitter in c-stores.

Implementing a foodservice program has become a must-have for most convenience store retailers as customer demand for food and beverage items increases.

But building out a food menu doesn’t have to be complicated. Many retailers are finding success with tried-and-true foodservice staples, including pizza, chicken and roller grill items. These food offerings in particular allow retailers to get creative while providing customers with convenient and familiar foodservice items they can eat on the go.

Pizza Preferences

Cenex Zip Trip, operator of 40 stores across seven states, co-brands with Hunt Brothers Pizza at 11 of its locations to offer its customers high-quality pizza.

“The Hunt Brothers program provides a great product, a well-known name, great partners who support us 100%, and better food margins with labor cost savings since their product comes pre-sauced and pre-cheesed,” said Jon Fleck, merchandising manager for Zip Trip. “From the owners to the people delivering product to our stores, Hunt Brothers employees are helpful and wonderful to work with.”

Cubby’s, too, has co-branded with Godfather’s Express in most of its c-stores to bring pizza to its customers. In locations where Cubby’s can’t offer Godfather’s Express due to territory restrictions, the c-store offers the Godfather To-Go Program. The company also owns and operates five traditional Godfather’s restaurants.

With both Zip Trip and Cubby’s offering popular pizza brands, they have been able to watch customers’ pizza demands evolve.

“We are seeing more demand for limited-time offers (LTOs) that are of the hot/spicy variety and jalapeño, hot honey varieties,” said De Lone Wilson, president of Cubby’s. “Customers are also always demanding a high-quality, great-tasting pizza.”

Fleck pointed out that Zip Trip customers are also looking for great-tasting pizza at a price they can afford. “Hunt Brothers provides all of that,” he said.

Mobile ordering and delivery continue to play a huge role in the success of pizza offerings.

“Today, they want an easy-to-use app to order it and have it delivered to their home or place of business without speaking to anyone,” said Wilson.

Cubby’s has begun to install grab-and-go warmers in its Godfather’s Express locations specifically to hold large pizzas for grab-and-go during the lunch and dinner dayparts, along with using DoorDash to deliver pizza from those same locations.

Chicken Is Trending

Chicken is another c-store foodservice staple for most retailers. Chicken can be offered in many different ways, from boneless wings to chicken tacos, which allows retailers to make it their own and prepare it the way their customers like.

Kwik Stop, which has 27 locations in Nebraska and Colorado, partners with Krispy Krunchy Chicken at six, soon to be eight, locations.

Through this program, Kwik Stop can offer its customers a variety of chicken, including bone-in wings, chicken tenders and a spicy chicken sandwich. For the morning daypart, the c-store offers a chicken tender biscuit.

At the remaining Kwik Stop locations that don’t have Krispy Krunchy Chicken, customers can purchase chicken gizzards, spicy chicken sandwiches and mesquite grilled chicken sandwiches.

Kwik Stop also offers Chicken Crispitos through another company at all 12 of its deli stores.

“The Chicken Crispitos are a big breakfast seller,” noted M. David May, food service director at Kwik Stop. “It’s a nice grab-and-go item that customers can eat on the go.”

Almost 50% of the revenue in stores featuring Krispy Krunchy Chicken comes from chicken sales, said May.

Out of the many chicken products Kwik Stop offers, customers are gravitating toward tenders.

Customers can choose from a three-piece all the way to a 25-piece tender meal with a biscuit, along with a Krunch Box through Krispy Krunchy Chicken. They can also choose a family meal with 12 pieces of chicken, six tenders, six biscuits and a side, or a 12-piece tender family meal.

Aside from offering affordable family meals, May keeps his chicken offerings new and exciting with LTOs. In June, Kwik Stop introduced an eight-piece bone-in chicken meal with three thighs, three legs and three wings with a large potato wedge, four biscuits and a side for $22.99.

“I wanted to take advantage of the summer market, so I wanted to have a viable option for customers while they are outside more during the summer months,” said May.

Enhancing the Roller Grill

Roller grill items have always been a great addition to c-stores because they are one of the easiest grab-and-go products for consumers. Retailers that offer these items continue to see excellent outcomes from sales to customer feedback.

Rutter’s, operator of 85 c-stores in three states, offers a wide range of roller grill items like all-beef hot dogs, sausages and chicken rollers.

“We expect the roller grill category to see a positive growth of around 3-5% in 2024,” said Philip Santini, senior director of advertising and food service at Rutter’s. “This growth is driven by the rising demand for convenient, high-quality and diverse food options.”

Regarding roller grill trends, consumers are no longer looking for an ordinary hot dog or sausage; they have broadened their taste buds.

“Bold and unique flavors are increasingly popular as customers seek new and exciting taste experiences,” said Santini.

To capitalize on the new flavor trends, Rutter’s is including more diverse flavors and international options for its roller grill.

“Additionally, we are creating new classic options with items currently on our menu,” Santini explained.

As long as retailers that offer roller grill items keep bringing in innovative flavors and ideas, there will continue to be great success in the roller grill category.

“The rest of 2024 looks very promising for roller grill items. The roller grill category is and will continue to be a go-to choice for quick, delicious and varied meal options,” said Santini.

Source: CStore Decisions

Finding Functionality for Summer Sipping

By: Zhane Isom | July 1, 2024

With summer here, packaged beverages are in the spotlight, and retailers are taking stock of the hot segments as well as recurring and new trends as inflation still makes its mark.

The packaged beverage category is getting a lot more attention now that summer is here. Consumers are looking for beverages to cool them down and keep them hydrated in the heat, and they’re especially reaching for new flavors.

Meanwhile, c-store retailers are watching emerging and continuing trends and growth in dollar sales across the cold vault, even if unit sales are flatter overall.

Terry Messmer, category and sales manager for Tri Star Energy, which has 160 Twice Daily convenience stores across Tennessee, Alabama and Kentucky, mentioned that he has seen an uptick in beverage dollar growth.

“(However), we continue to monitor unit sales as retailers continue to increase the unit purchases. We are starting to see a decline, and we need to make sure that we keep a close eye to ensure that we don’t lose too much in unit sales,” he said.

In fact, carbonated beverages reached $10.7 billion in dollar sales, which is a 5% increase, while its unit sales held steady at 4.31 billion, a 0.3% increase for the 52 weeks ending April 21, according to Chicago-based market research firm Circana.

“I see the packaged beverage category continuing to rise if speaking of dollar sales. Inflation will cause an increase in dollar sales,” said Brian Young, vice president of Young Oil, which operates 11 Grub Mart stores in Alabama. “I see the category staying flat if speaking of volume. Having to choose between a Pepsi or Coke contract causes several products to be at a big price disadvantage versus the dollar, grocery or wholesale stores, which appear to have a different set of contract offerings.”

Bottled water, as well, has seen a rise in dollar sales. This segment rang in at $5.78 billion, a 4.5% increase for the 52 weeks ending April 21, per Circana. However, unit sales fell 2.5% to 2.35 billion.

“Even in uncertain economic times, bottled water remains consumers’ preferred option for a relatively inexpensive, convenient, portable beverage,” said Michael Bellas, chairman and CEO, Beverage Marketing Corp., in a recent statement. “Functional benefits that drove bottled water to the No. 1 position, such as calorie-free refreshment and healthy hydration, will drive its future performance.”

Summer Beverage Trends

Along with craving new beverage flavors and brands, consumers are prioritizing their health and searching for better-for-you and functional beverage options.

For the 52 weeks ending April 21, energy drinks totaled $14.3 billion in dollar sales, a 12.1% increase, while unit sales for the segment increased 2.3%, according to Circana.

Young noted that energy drinks are doing great in his stores, with Ghost Hydration standing out as a popular seller with customers.

“Health and wellness continue to be the greatest driver of beverage selection by today’s consumers,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. “Drinks with health and wellness attributes and/or functional benefits are likely to be where the greatest growth and innovation is.”

Following energy drinks are sports drinks with $4.88 billion in dollar sales, a 6% increase for the 52 weeks ending April 21, noted Circana.

“2024 is the year of rapid hydration, and any item that contain electrolytes are what consumers are looking for,” said Messmer. “I am also seeing continued growth in the energy category, especially within the functional subcategory of energy with items with a little more caffeine and zero sugar.”

Navigating the Beverage Sector

The beverage category is one area that is constantly seeing new flavors, brands and innovative ideas. With the constant overflow of new beverages on the market, c-store retailers are left with the challenge of ensuring they have the right drinks in their coolers while keeping tabs on the next big thing.

“There is a continued influx of new items. There are a lot of new items, but many don’t seem to have a good strategy for how they are going to be the next big brand that consumers will be talking about,” said Messmer.
Hemphill agreed, noting that marketers must also continue developing meaningful innovation that can cut through the clutter.

“The beverage marketplace is very competitive with more products and categories than ever vying for the attention of today’s consumers,” explained Hemphill.

Nonetheless, packaged beverages will continue to see growth as long as brands keep introducing new beverages to consumers and giving retailers more options to add in their stores.

Source: Convenience Store News

Sizing up Snacks

By: Zhane Isom | July 2, 2024

Sweet, salty and healthy snacks are thriving in c-stores as consumers continue to purchase them, and retailers are adjusting their snack sections based on growing trends.

The snack category at convenience stores is expected to see continued dollar sales growth as inflation pushes prices higher and customers seek out new flavor experiences across sweet, salty, meat and healthy snacks.

Flavor and taste reign supreme in the snacking universe, with 83% of consumers reporting they choose snacks with a flavor they prefer, according to Circana’s recent comprehensive analysis of the snack market. The analysis also stated that 46% of Americans eat three or more snacks each day, helping the snack category continue to grow exponentially.

Snack Outlook

Retailers reported seeing an increase in consumers’ salty, sweet and healthy snack purchases.

However, sweet snacks have received the most attention, resulting in a significant dollar sales increase. Cookies garnered $1.23 billion in dollars, a 13% increase for the 52 weeks ending April 21, per Circana.

Farmers Union Oil Co., with one store in Montana, vouches for sweet snacks’ continued growth.

“For our sweet snacks, most of our customers come in for our Peanut Butter Crispy Bars, Maple Bars, Cinna Babies and Hostess snacks,” said Diane Meeks, c-store manager, Farmers Union Oil. “Our Cinna Babies come in a pack of five small cinnamon rolls, and we typically sell between 150 to 200 packages a month.”

At Farmers Union Oil, Hostess doughnuts are a huge hit. The company sells about 30 bags of Hostess Donettes Crunch a month.

Following sweet snacks in terms of trends and dollar sales are healthy products. In particular, healthy snacks and granola bars have seen the most traction from consumers.

For the 52 weeks ending April 21, snack bars, granola bars and granola clusters saw a 9.6% increase in dollar sales and stayed relatively flat at -0.2% in unit sales for the same period, noted Circana.

“There has been a notable increase in the popularity of high-protein granola and energy bars,” said Meeks. “We are also noticing a growing demand for fruit and veggie grab-and-go cups.”

Randy Adams, category manager/buyer for Huck’s, with over 125 locations in five states, has noticed an uptick in healthy snack demands. He mentioned that Hippeas and some salty, better-for-you snacks have been doing well in his stores.

Other healthy snacks seeing dollar sales gains in c-stores are snack nuts, seeds and corn nuts. Seeds reached $999 million in dollar sales, which is a 4.3% increase for the 52 weeks ending April 21, per Circana.

“Additionally, we have always seen a high demand for products like sunflower seeds, especially being in a farm and ranch community with baseball season in full swing,” said Meeks. “Sunflower seeds are currently our No. 32 top seller.”

For salty snacks, consumers still demand their favorites, including potato chips, pretzels and more.

Potato chips increased 9.4% in dollar sales and 2% in unit sales for the 52 weeks ending April 21. Pretzels increased 8.2% in dollar sales for the same time frame, per Circana.

The salty snack segment has been heating up at Huck’s as customers demand more snacks with heat.

“Anything with heat, whether it’s the Frito Flamin’ Hot line or items with Tajin, are trending,” said Adams.

Since spicy snacks are doing exceptionally well at Huck’s, the chain has decided to add a section in its stores called BIGG HEAT that displays a variety of hot, salty snacks.

Meat Snacks at C-Stores

2024 has been a rocky year for meat snacks, with inflation playing a massive role in sales at c-stores.

Meat snack dollar sales stayed steady at -0.5%, but unit sales dropped by 5.5% for the 52 weeks ending April 21, noted Circana.

“The pricing on jerky is starting to have a little bit of a negative impact on unit sales,” said Adams. “I am seeing a shift from consumers from the bagged jerky to sticks because they can still get them for under $2.”

Farmers Union Oil, nonetheless, has seen growth. Meeks explained that jerky products have taken the top two spots in its grocery and snack categories this year. Craig’s Jerky is the c-store’s best-selling brand in terms of quantity and revenue.

“We expect an increase in our healthy and meat snacks … due to the products we are starting to bring in from local vendors,” she said. “With jerky taking the No. 1 spot and being a high-priced item, I believe we will increase the category by 5%.”

Snacks will continue to make great strides in c-stores. It is up to retailers to offer and know what their customers want and when they want it.

For instance, Farmers Union Oil is adding fruit, veggie and protein cups to its open-air selections and including more local vendors in the category. And Huck’s is keeping salty products in its loyalty program since the segment is popular in Huck’s stores.

Source: CStore Decisions

Emphasizing Store Cleanliness

By: Elie Y. Katz | June 27, 2024

With foodservice gaining importance in convenience stores, retailers cannot afford to give customers the impression that employees have poor sanitation habits or that their standard of excellence doesn’t extend to cleanliness.

Research consistently shows that dirty, poorly stocked bathrooms turn customers away and that clean, sanitary bathrooms are much more important to women than to men. Clean restrooms are so desirable that one in three Americans would pay to use a restroom if they were assured it was clean and well-equipped.

Seventy-two percent of those surveyed by the National Association of Convenience Stores said they stop using the restrooms, followed by those who have to pump gas (68%) and 66% who need to buy food or drinks.

Whether you operate a restaurant, convenience store or even your corporate office, many people will use your restrooms daily — customers, potential employees, business partners, etc. A dirty bathroom will impact your business’s reputation and bottom line.

According to The Facilities Group, a Tampa, Fla.-based facility maintenance and management firm, a recent survey found that 60% of Americans immediately leave a business or are less likely to return after encountering an unpleasant restroom.

That means for millions of Americans, the cleanliness of your facilities will define your brand and reputation. Many public restroom complaints can frustrate customers. Lack of soap, clogged toilets and dirty sinks are among the most common issues when using a business restroom.

The Facilities Group said dirty bathrooms damage your reputation in three key areas:

1) Creating a Health Hazard. Any unclean place can lead to health risks. Hundreds of people use public restrooms daily, making them the ideal setting for gathering germs. A dirty bathroom can cause bacteria and germs to linger, putting customers at risk of viruses and other health issues.

If your employees also use these restrooms, the problems increase, mainly if you sell foodservice items. Dirty bathrooms lower employee morale and cause health issues. For customer and employee safety, keeping restrooms clean is essential.

2) Reflects Poorly on Your Business. It is essential to consider the state of your bathroom as a reflection of your business image. For instance, if you own a restaurant and need to remember to clean your restrooms, customers may question the cleanliness of your kitchen.

These negative perceptions can significantly harm your business, especially in the modern age when even one online review, blog post or social media share can quickly spread the word.

Businesses in the service industry, such as hospitality, can give their customers peace of mind by maintaining clean restrooms. People encountering dirty bathrooms can develop a negative image of your stores and could begin to distrust other aspects of your company, including customer service.

Furthermore, if your competitors operate clean restrooms, which is their reputation, you will need more time to win back a customer who lost confidence in your brand.

3) Deters Potential Customers. A customer’s first encounter with your business could be when they stop in to use the restroom. If they find it dirty, they will be less likely to return. People who use your bathrooms may become potential clients, but when you need to remember to maintain your restrooms, these customers stay away. First impressions are lasting.

Clean restrooms give customers a positive perception of your business. Customers will appreciate your efforts and reward your business with increased sales and positive reviews that generate interest among future customers.

When customers have confidence in your facilities, especially in a restaurant environment, they shop more, stay longer and continue spending money on food and drinks.

Source: Convenience Store News

Summer Shakeup

By: Emily Boes | June 17, 2024

With the summer upon us, c-store retailers are using this time to offer new promotions and prioritize seasonal favorites to snag summer travelers and hometown locals.

Changing seasons are often times when people take stock of their lives, assessing where they’re at and where they want to be. Similarly, companies will do the same, and convenience store retailers are no exception. With changing weather comes new foot traffic patterns, trends, priorities and attitudes.

Now that we’ve kicked off the summer months, c-stores are primed to cater to new customer needs as summertime brings about more activities that put customers on the road.

While customers emerge from winter hibernation and children are let out of school, a c-store’s ability to cater to its customers is more important than ever. With events such as camping trips, barbecues, Fourth of July celebrations and more ahead, c-stores should be prepared to stock for these needs accordingly.

For instance, displaying marshmallows, graham crackers and chocolate in a highly visible spot is paramount for the anticipatory or even last-minute s’mores nights. In the same vein, stocking up on hot dog and hamburger buns and paper products will be beneficial for summer cookouts.

And, staying supplied with cold beverages is a must while customers attempt to cool down in the summer heat.

Road Tripping

Most significantly, summer is traditionally the season for road trips. The opportunity this has provided for c-stores can’t be overstated.

On May 23, according to AAA, 38.4 million drivers were expected to be on the road for the Memorial Day holiday weekend and gas prices averaged at $3.61. Now that the holiday has passed though, lesser demand has pushed the national average of a gallon of gas to $3.48 on June 6. The eight-cent drop doesn’t seem like much, but it’s the largest one-week drop in price in 2024 yet.

And on June 13, the national average for one gallon of gas has fallen further.

“So, is the typical robust summer driving season a thing of the past? Or is gas demand just taking longer to pick up steam?” questioned Andrew Gross, AAA spokesperson, in a press release.

Regardless of dipping demand, road trips haven’t gone by the wayside completely, and being prepared for the necessary fueling stops is essential for retailers.

Snacks are a big get during these stops, as well as drinks.

In fact, according to the International Bottled Water Association, bottled water retail sales in 2023 upped 6.5%, based on Beverage Marketing Corp. data. Many consumers are growing to prefer healthier beverages.

And, potato chip unit sales are rising, hitting 893 million units sold for the 52 weeks ending April 21, per Circana. Due to inflation, dollar sales grew for sweet snacks like cookies and granola bars, as well.

Additionally, maintaining clean restrooms is important, as drivers are likely to align their fuel/stretch/bathroom breaks. If a customer has a great restroom experience at a store, they’ll want to make the same stop on the return trip.

Promotional Opportunity

Consumers won’t always search for just their favorite packaged snack or beverage. Many prefer cooked foods, whether on a road trip and looking for lunch or while taking a break from work to walk to their local c-store for a hot meal.

And taking advantage of summer promotional opportunities is a good way to entice these customers and more.

Maverik and Kum & Go (K&G), for example, launched a summer program together, the first time the two brands will have consistent summer offerings since Maverik’s 2023 acquisition of K&G.

Combined, they have nearly 800 stores in 20 states.

As part of the program, Maverik launched smoked brisket breakfast and lunch options, available in both Maverik and K&G locations. Each brand will also have items specific to them.

In addition to the brisket offerings, limited-edition sweet treats will be available through Oct. 1, including a s’mores doughnut and s’mores stuffed cookie.

As for beverages, the chain is rewarding loyalty members with the 89-cent Fountain Frenzy, giving discounts for up to a large-sized fountain drink through Oct. 1.

Casey’s, too, with over 2,600 in 17 states, launched summer promotions and menu items, such as its new BBQ Pulled Pork Pizza and King’s Hawaiian Pulled Pork Sliders.

Customers can also buy a large pizza and receive a large single-topping pizza for 50% off from June 26 to Sept. 3; purchase $3 Cheesy Breadsticks with a large pizza; receive a large specialty pizza for $14 on certain days; and more.

7-Eleven, with more than 13,000 stores in the U.S. and Canada, also launched a new summer treat — the Drumstick Slurpee Blue Raspberry Vanilla Cone.

The opportunity for c-stores to take advantage of the summer months and reel in new customers exists. Aside from deals and strategic merchandising, this is also a great season to rent out space to (if possible) other vendors, such as fruit or popcorn stands, to entice customers.

Convenience store retailers know what their customers want, and now is the time for a fresh outlook and preparation for the months ahead.

Source: CStore Decisions

Winning Foodservice Daypart by Daypart

By: Emily Boes | June 5, 2024

C-store retailers looking to succeed with foodservice programs are appealing to customers differently based on daypart, strategizing with their offerings and marketing efforts.

As c-store foodservice programs continue to grow, it’s important for retailers to focus on dayparts, understanding how best to promote and manage foodservice at different times of the day.

Shop Rite/Tobacco Plus, which operates 36 Shop Rite locations and 24 Tobacco Plus sites in Louisiana, for instance, has been focusing on the “after-school snack time,” noted Angelle Cloud, who is both a registered and licensed dietitian nutritionist and is the foodservice compliance director and dietitian for the company.

“These are generally parents and teens looking for a quick bite while they are in between appointments and events. We make sure that our hotbox is full, fresh and stocked with the favorites,” she said. “This is also a great time to offer menus, and when applicable, talk about our drive-through or other special conveniences that we offer in that location. Getting those customers to become regulars and/or return at more standard mealtimes is a big goal for all of us.”

The two brands offer a combined 34 Bourbon Street Deli locations within the stores.

Daypart Offerings

At Quality Dairy Co., which operates 26 sites in Michigan, breakfast is the most popular daypart.

“Here at Quality Dairy, we cut our teeth on our doughnuts and coffee. We make our doughnuts fresh every day for all of our locations,” said Michael Wensel, Quality Dairy fresh food category manager. “We probably have 50 different styles of doughnuts at any given time that you can try.”

The chain also stays busy during the breakfast daypart due to its specialty hot food offerings and variety of coffee options.

That said, in a move that brought a large uptick in customers at Quality Dairy for the lunch/dinner daypart, the chain launched a fried chicken program in February.

“It’s a fantastic product. People are coming in specifically for that chicken now, which is cool,” said Wensel. He said he likes seeing on customers’ faces how much they enjoy the chicken.

“And then they realize they’re getting it at a convenience store. That still has that kind of negative stigma. But when they’re like, ‘Oh … I’m still in a convenience store, and I’m getting this really good food.’ That’s why I’m here. That’s the purpose of all of this is to change that narrative,” said Wensel.

In the mornings, Shop Rite/Tobacco Plus serves grab-and-go items such as breakfast biscuits and burritos at its smaller locations and for quick purchases at its larger spots.

Additionally, customers can choose to order local favorites such as boudin balls, links and egg rolls, offering different flavors within each of the categories, since the company makes its own boudin.

“Lucky for us, in Louisiana, the perfect Cajun breakfast is boudin and a Coke,” said Cloud.

Not solely for breakfast, these items are able to cross from daypart to daypart.

“(This) is great for business,” Cloud noted. “Customers know what to expect and we can assure the quality as we oversee production from start to first bite.”

Daypart Marketing

Successful foodservice programs need strategic marketing plans.

Shop Rite/Tobacco Plus takes advantage of social media and on-site signage to reach customers at different times and maximize shopping potential when they are at the store.

“Approaches that appeal to various ages and types of customers are valuable because you don’t have to reinvent the wheel and put in tons of extra work,” said Cloud.

At Quality Dairy, the chain uses pumptoppers and social media outreach, as well. In areas with Quality Dairy’s hot food locations, it sends mailers. For lunch and dinner, the mailers are sent to a larger radius. The chain also incentivizes customers with bag stuffers such as coupons and extra rewards.

“At some of our other locations where we have a little more technology, we recently had been using the (Dover Fueling Solutions) Anthem pumps that have a giant touchscreen right on the gas pump itself,” said Wensel.

Customers who fill their gas tanks at these pumps will notice a slot machine appear on the touchscreen that allows them to win one of three prizes, such as $1 or $2 off an in-store purchase, a free doughnut or a free hot food item.

“That accomplishes two things. One, it obviously gets the customer to walk into the store and then increases your market basket. … Two, it exposes them to some of the things that they may not have realized that we have,” said Wensel.

The rewards on these pumps change by daypart.

Additionally, Quality Dairy partners with local businesses, such as a vegan restaurant and a company that sells kombucha, and does combined advertisements.

“(We’re) putting out signage for those as well, just to kind of get the attention that it deserves and hopefully reach a different clientele than we’re normally used to having walk in our stores,” Wensel added.

Overall, the way to foodservice daypart success needs to be broken down into questions such as, “Who are our customers? When are they coming to our store? What is in demand in our area?” and more, said Cloud. “When you can answer these types of questions and execute with consistency and quality,” she continued, “I really think that customers will find you.”

Source: CStore Decisions

Six Factors for Success in C-Store Foodservice

By: Bruce Reinstein | June 3, 2024

As the c-store landscape changes, more c-stores are shifting their approach to food to keep pace with evolving customer expectations.

How important is foodservice to the future of convenience stores?

The response to this question varies considerably from company to company and person to person. There are many factors that go into the response as rural stores will vary from urban locations and the type of consumer will also have an impact.

The one thing that is very consistent is that today’s consumer is looking for some type of foodservice whether it is “restaurant quality” or simply something to eat or drink. There is not one way to do food, but without foodservice, there may not be a future for many convenience stores.

Here are six factors for success in foodservice to pay attention to amidst the changing c-store landscape.

1. Adapting to the “modern” c-store consumer. The modern consumer still values convenience when it comes to c-store foodservice, but their demands are quite different from the traditional consumer. The younger consumer is looking for healthier options that are freshly prepared. They prefer customized products, but grab n’ go with a clear differentiation toward quality is appreciated. The modern consumer wants to engage through technology whenever possible so they can order and pay at their pace and be able to customize, when possible, to their preferences. They will pay a little more to get what they want.

2. Thinking like restaurants. If you want to be successful in c-store foodservice, you must think like a restaurant. The downfall of c-store foodservice is when there is a lack of commitment to standards and 100% execution. A convenience-only mindset cannot be a factor in creating a great foodservice program. Restaurant operators focus on food quality, service/hospitality and delivering on the promise. C-store foodservice must follow this formula. It will help create a more loyal foodservice customer. The foodservice team should want the consumer to come for food and beverages and then get gas and more while they are there, as opposed to coming for gas and other products and then deciding to purchase food or beverages.

3. Understanding changing consumer expectations. For many consumers, simply purchasing food and beverages without knowing more about what they are buying is old news. Expectations have changed dramatically and will continue to change. It starts with quality products and a selection that appeals to a broad base of consumers. Quality and freshness are where the consumer starts. Many are looking at health and wellness when they make their selections. Others are looking at ethnic and global flavors. Our population continues to become more diverse and consumer palates are changing. Today’s consumers also live in a digital world and want order and payment options that allow for an easy and consistent experience.

4. Engaging with the community to drive customer loyalty. C-stores used to be the place where you picked up something when nothing else was available or it was on the way to somewhere else. Foodservice has made c-stores into destinations and with that comes the responsibility to be a part of the community by supporting events and the people who make a community great. It is great to tell a story, but it’s important to deliver on the story. Community engagement drives traffic, but it doesn’t maintain traffic. Consistent food and beverage quality and great hospitality will keep them coming back.

5. Driving traffic. C-store foodservice operators are looking to both drive more traffic as well as maintain the traffic that they have. The consumer wants nothing more than to be loyal and come to the same locations to get what they crave. Whether it is grab n’ go, customized or a combination of both, the product quality must meet or exceed expectations and must be consistent each and every time the consumer has the product. It therefore falls on the operator to have a menu and limited-time offers that each employee is capable of producing consistently. The consumer will not accept poor service, out-of-stock items or a product that does not meet their expectations. Traffic will grow, but foodservice operators must make the difficult decisions necessary to provide the consumer with what they want.

6. Balancing driving revenue with managing costs. It is quite simple. Growth without profitability is a formula that does not work. Many have worked hard on driving revenue through loss leaders. It is important in today’s marketplace to run promotions on the foodservice side that are compelling, a good value and more profitable than a standard menu item. It sounds like a daunting task, but it really isn’t. It takes some creativity, engagement with the customer to understand what they are looking for and engagement with the foodservice staff to confirm what the customer wants.

Freshness, quality, healthier options, combos, a diverse menu, enhanced packaging, hospitality and consistency are important drivers of revenue, but the challenge remains to make sure that cost is fully evaluated to create a true balance.

Source: CStore Decisions

McLane Opens Innovation Kitchen Facility at Company Headquarters

By: Kevin McIntyre | May 14, 2024

The facility is a dedicated c-store showcase, in a real-world setting, focused on the exploration of consumer trends and taste innovations.

McLane Co. has announced the grand opening of its Innovation Kitchen at the company’s headquarters in Temple, Texas.

Designed for customers as a full-scale replica of the complete c-store experience, this state-of-the-art space showcases how cutting-edge retail foodservice equipment and products seamlessly fit into various footprints and counter spaces while exploring the world of McLane Fresh, Emerging Brands and CVP private label brands.

From visualizing how a range of products and equipment integrates into their store layout and planograms to sampling products and exploring marketing materials, customers will gain valuable insight into how McLane’s offerings can elevate their retail product mix and boost customer experience.

Beyond the showcase experience, the space will serve as a dedicated hub for development and innovation, allowing the McLane Fresh team to conceptualize and test new menu items that cater to evolving consumer trends and customer requests. Customers will also be invited to sample these creations.

“We are excited to unveil the McLane Innovation Kitchen, a space that embodies our dedication to innovation, collaboration and a world-class customer experience,” said Vito Maurici, McLane Customer Experience Officer. “This facility showcases our commitment to setting new standards for excellence in the industry and underscores our role as a trusted partner in our customers’ success. Through this platform for product testing, creation and display, we have the opportunity to engage with customers at every stage of their retail foodservice journey.”

The Innovation Kitchen includes offerings like Cupza!, McLane’s award-winning beverage line, Central Eats grab-and-go products for every daypart, Prendisimo pizza and made-to-order options.

McLane offers customizable solutions for retail and restaurant customers, from ordering and fulfillment to equipment and in-store merchandising, aimed at eliminating barriers to entry for smaller retailers and solving logistical challenges for large chains. More information on convenience store solutions from McLane is available on the company’s website.

Source: CStore Decisions

Staying on Trend With Snacks

By: Zhane Isom | May 7, 2024

Retailers are keeping tabs on new snack trends and inflation pressures as they look to enhance their snack aisles.

The sweet, salty and meat snack categories continue to perform well at convenience stores despite inflation’s tight hold on these segments.

Salty snacks, for instance, have been a hit in the snack aisle, ringing in at $45.1 billion in dollar sales, a 4.5% increase for the 52 weeks ending March 16, according to NielsenIQ (NIQ).

Worcester, Mass.-based Nouria, with 175 locations throughout New England, expects its salty snack category to increase by 4%, as stated by Meghann Eaton, category manager at Nouria.

“Salty snack growth is coming from better-for-you options, added protein and cleaner ingredients,” she said.

Sweet snacks have also seen slight growth in dollar sales at $9.23 billion, a 1.8% increase, even as it decreased 6% in unit sales for the 52 weeks ending March 16, per NIQ.

Eaton has forecasted a 6% increase in sales for the sweet snack category, especially considering Nouria’s fresh My Nouria line of pastries, cakes, cookies, muffins and brownies.

However, meat snacks have been feeling the effects of inflation the most when it comes to unit sales but continue to do well in c-stores.

Meat snacks dropped 6.3% in unit sales for the 52 weeks that ended March 16, noted NIQ, while its dollar sales held steady with a 0.8% decrease for the same period.

Snack Trends to Watch

The inflation impact, while worth observing, is not stopping consumers from buying their favorite snacks. Consumers are still looking to try new flavors, trending snacks from social media and healthier options.

“Bold new flavors continue to be big wins within these categories, especially within salty snacks,” said Cameron Baer, center store category manager for Rutter’s, which has 85 sites throughout Pennsylvania, Maryland and West Virginia. “Both bold and spicy flavors continue to be the leader in 2024.”

Retailers have been seeing bold new flavor trends with meat snacks, as well.

“Shoppers want hot and spicy flavors in their meat snacks. Wild River Jerky and No Man’s Land Jerky are growing in popularity as ‘old-fashioned’ jerky that offer a longer-lasting flavor,” said Randy Demster, buyer for the Army & Air Force Exchange Service (AAFES). AAFES exclusively serves U.S. military personnel and their families on bases around the world.

Keeping these trends in mind, retailers are rearranging their snack sections while thinking of new ways to fight inflation.

Like Nouria, Rutter’s customers are looking for better-for-you snack options, in addition to value and flavor innovation.

“All of these are top of mind when planning assortment and promotions in 2024,” said Baer. “We are not in the business of simply continuing what we have been doing. It is important to introduce some of these new offerings and flavors.”

With retailers offering deals and promotions, consumers are able to continue buying their favorite snacks while staying within their budget.

“Costs are up everywhere, so innovation and promotions that cause excitement are key to all categories this year,” said Eaton. “Consumers are wanting deals within the category while satisfying more than one need at once. They want salty and protein, sweet and fresh, and quality and price.”

Regarding meat snacks, consumers are continuing to change the way they purchase these products to help deal with inflation. At Rutter’s, for instance, customers have been moving from bags to sticks.

“Much of this is related to price sensitivity from the consumer as bagged products have continued to rise,” said Baer. “This makes pricing and promotion much more important within this category.”

Looking Ahead

As 2024 continues, retailers are willing to think outside the box to keep sweet, salty and meat snack sales up and further engage their customers who purchase these products.

“We are currently looking into brands that have a mission like Veteran owned, giving back to local heroes, supporting local communities or helping protect our environment,” said Eaton.

“The Exchange is looking at multipack meat snacks as a growth opportunity. Shoppers are looking for individually packed meat snacks that are low calorie,” added Demster. “We are adding new products for our planograms such as mini cannisters with new flavors from Frito-Lay, Rap Snacks, Planters and Hippeas.”

Jaco Oil Co.’s Fastrip Food Stores, which has 55 locations in California and Arizona, has even gone as far as working on adding new racking inside the stores while ramping up promotional activity, noted Fred Faulkner, director of sales and marketing at Jaco Oil Co.

Rutter’s, too, has been working to drive even deeper discounts for its customers.

“Meat snacks especially have experienced a lot of pricing action over the last few years, so we are working to provide promos to get these products to our customers at a discounted rate,” said Baer.

Source: CStore Decisions

Serving up Fresh, Authentic Hispanic Food

By: Zhane Isom | May 7, 2024

As Hispanic food continues to flourish in c-stores, consumers are expanding their taste buds and asking for more authentic, fresh, customizable and flavorful Hispanic offerings.

The sweet, salty and meat snack categories continue to perform well at convenience stores despite inflation’s tight hold on these segments.

Salty snacks, for instance, have been a hit in the snack aisle, ringing in at $45.1 billion in dollar sales, a 4.5% increase for the 52 weeks ending March 16, according to NielsenIQ (NIQ).

Worcester, Mass.-based Nouria, with 175 locations throughout New England, expects its salty snack category to increase by 4%, as stated by Meghann Eaton, category manager at Nouria.

“Salty snack growth is coming from better-for-you options, added protein and cleaner ingredients,” she said.

Sweet snacks have also seen slight growth in dollar sales at $9.23 billion, a 1.8% increase, even as it decreased 6% in unit sales for the 52 weeks ending March 16, per NIQ.

Eaton has forecasted a 6% increase in sales for the sweet snack category, especially considering Nouria’s fresh My Nouria line of pastries, cakes, cookies, muffins and brownies.

However, meat snacks have been feeling the effects of inflation the most when it comes to unit sales but continue to do well in c-stores.

Hispanic food has been the star of the show at c-stores that offer it due to its convenience and customizable options. Consumers hunger for grab-and-go items like tacos and burritos that they can customize to meet their specific cravings.

At Kwik Stop Convenience Stores, which operates 27 locations in Nebraska and Colorado, the most popular tacos in its Mexi Fresh program are the soft shell and Krispy tacos, according to M. David May, food service director at Kwik Stop.

“Our soft shell tacos were sold the most, with our Krispy tacos following behind with 66% of sales,” he said. “As far as our burritos go, our most popular one is our bean burrito, followed by our Grande burrito. Our Sunrise and All American breakfast burritos also perform well in the morning.”

Another c-store chain seeing its Hispanic food offerings do well is 7-Eleven with its Laredo Taco program. 7-Eleven has over 13,000 stores throughout the U.S. and Canada, with Laredo Taco offered at more than 550 of its c-stores.

“Breakfast tacos are our most popular item on our menu, with our average store selling more than 200 each day,” said Christopher Switzer, senior product director at 7-Eleven.

Rutter’s, too, has seen significant growth with its Hispanic food offerings.

“We’ve observed that many Hispanic items on our menu are conveniently suited for on-the-go consumption, which aligns perfectly with the needs of our constantly moving customer base,” said Philip Santini, senior director of advertising and food service at Rutter’s, which operates 85 locations throughout Pennsylvania, Maryland and West Virginia. “Coupled with the increasing demand for more flavor and variety, we see ample opportunity to further develop this category within our locations.”

However, consumers’ taste buds have expanded, and now they are looking for more authentic Hispanic food offerings made with fresh ingredients and that are full of flavor.

Rutter’s offers a variety of Hispanic options such as tacos, walking tacos, burritos and empanadas, and the c-store chain plans to introduce even more options to its customers in the future.

“It’s clear that our customers have a strong affinity for the Hispanic flavor profile, and we’re dedicated to satisfying their preferences by continually enhancing this section of our menu,” said Santini.

Amplifying the Hispanic Food Menu

To keep up with consumer demands, retailers are looking at how they can further evolve their Hispanic offerings, whether by adding new items to the menu, adding new seasonings to their flavor profile or ensuring ingredients are prepared fresh daily.

For instance, May is looking for new items to add to the Mexi Fresh menu.

“I recently went to a food show where a company presented me with Spanish rice because we don’t have rice in our program, and I think that would be a great addition,” he said.

To improve the quality of items on the menu, May also changed the queso that was on offer.

“I went through a company called Marcos that has a good queso, and we started offering that. Now, our queso is ranked at No. 13 as far as sales go,” said May.

Quality food is important to customers, whether it comes from a traditional full-service restaurant, a convenience store or other foodservice options.

Rutter’s, on the other hand, is looking into introducing new flavor combinations, spicing up the menu, and maintaining its focus on high-quality items that are convenient for on-the-go consumption, noted Santini.
Elsewhere, 7-Eleven’s Laredo Taco program is raising the bar when it comes to offering consumers authentic Hispanic food.

“Laredo Taco is all about using authentic flavors from deep Texas culture,” said Switzer. “It starts with fresh flour tortillas hot off the grill, loaded with sizzling fillings and topped with fresh salsas.”

Customization Is Still in Demand

Even though authenticity, new flavors and fresh ingredients are at the top of the demand list for Hispanic food, consumers still want to have the option of customizing their orders.

Rutter’s has homed in on customization with its “Made for You” menu, allowing customers to tailor their orders to fit their needs.

“The ‘Made for You’ option is highly favored by our customers. We prioritize customization and catering to individual preferences, a strategy that deeply resonates with our patrons,” said Santini. “Our objective is to offer the highest-quality items and a wide variety to our customer base, ensuring they can create exactly what they want when they want it.”

He noted that customization enhances the customer’s overall dining experience.

As consumers’ demands change for Hispanic food, retailers must be willing to alter and improve their offerings to keep up with and continue to see growth in this area.

“With each store launch we’re seeing great responses from customers looking for fresh, authentic food, and we plan to continue to grow the brand as appropriate,” said Switzer.

Kwik Stop is currently offering a $6 Mexi Bag that comes with a beef burrito, a small peso and a side of queso.

“I encourage any convenience store out there looking to get into authentic Hispanic food to offer some type of promotion to grab customers’ attention,” said May.

Source: CStore Decisions

Coffee Consumption Rises

By: Emily Boes | April 17, 2024

Total coffee servings experienced a 5% year-over-year growth globally.

Consumers globally are increasing their coffee consumption. Total coffee servings experienced a 5% year-over-year growth globally, outpacing the 3% recorded in the United States, based on Circana’s CREST Commercial Foodservice data.

Circana’s extensive research combines global data with local depth, providing nuanced insights for each country, spanning restaurant chains and independent segments.

This growth trend was observed in 11 of the 12 countries tracked, with China emerging as the frontrunner, experiencing the highest coffee consumption growth rate.

“Coffee is a unique category where trends and competition intertwine on both global and local scales,” said Tim Fires, president of global foodservice at Circana. “Cold coffee emerges as a standout trend, experiencing substantial growth across all 12 countries we monitor. However, the competitive landscape, encompassing both chain and independent establishments, exhibits unique characteristics in each country. Understanding both the overarching global trends and the intricacy of the local marketplace is critical for success in this category.”

A few key findings include:

  • Coffee servings clocked in at over $36 billion. South Korea stands out as the only country that did not experience year-over-year growth in coffee servings.
  • While hot coffee remains the dominant choice globally, cold coffee has gained momentum, indicating a long-term growth trend. China led cold coffee consumption growth from 2019 to 2023, boasting a 20% compound annual growth rate, with cold servings constituting 33% of total coffee consumption.
  • Coffee outpaced both tea (+4%) and carbonated soft drinks (+3%) in terms of year-over-year servings growth, emphasizing its position as one of the fastest-growing beverage categories globally.

C-store chains can take advantage of growing coffee trends as they look to revamp their hot beverage stations. For example, as the summer months approach, enticing customers with upgraded cold coffee selections could pay off.

As one of the staples of the c-store industry, coffee should always be a category that c-stores frequently navigate and stay on top of.

Source: CStore Decisions

Chocolate Succeeds Despite Setbacks

By: Zhane Isom | March 22, 2024

While unit sales take a hit, the category is still expected to see sales gains in 2024.

Chocolate remains a popular pick-me-up for customers, but recent price hikes have more customers looking for value, while new launches and a variety of options buoy impulse buys. Overall, category sales are expected to grow in 2024.

Chocolate candy dollar sales reached $3.67 billion, a 7.9% increase for the 52 weeks ending Dec. 31, 2023, per Circana. Out of all the chocolate segments, novelty chocolate candy saw the highest dollar sales increase (23.2%) for the period.

“My sources in the industry expect dollar sales for chocolate to grow between 2-4% this year,” said April Gelber, center store category manager for Cubby’s, which owns c-stores and supermarkets in Nebraska, Iowa and South Dakota. “Most recent (Circana) data also shows that in the Midwest specifically, chocolate accounts for a larger percentage of total candy, mints and gum sales as compared to the rest of the U.S.”

However, although chocolate sales are rising, unit sales for the category are trending downward.

Chocolate unit sales dropped 3.8%, with sugar-free chocolate declining the most at 27.1% for the 52 weeks ending Dec. 31, 2023, per Circana. Price per unit increases likely contributed to the decline, with chocolate prices up 12.1% for the period.

“Chocolate candy has been hit hard with double-digit price increases leading to monthly volume losses over the last year. Over the last 52 weeks ending Jan. 28, 2024, pounds of chocolate posted a 4.5% decline,” said Dan Sadler, principal, client insights for Circana. “The price for chocolate heavily relies on the cost of cocoa, which is at an all-time high and is not expected to soften until later in 2024. This will likely lead to dollar growth, but pound sales will remain soft.”

Chocolate Trends

But despite rising prices, the chocolate category at c-stores is expected to see sales gains in the new year.

One trend driving chocolate sales is consumers wanting larger amounts of it for consumption.

Bags and boxes of chocolate that are greater than 3.50 ounces saw a 9.5% increase in dollar sales, according to Circana.

“Additionally, in our market and across the U.S., customers are trading up for the larger take-home packs at a higher rate vs. the instant consumable packs because of the perceived value in those larger pack sizes,” said Gelber.

Sadler even stated that more consumers are gravitating toward private-label chocolate items due to price increases.

Going forward in 2024, consumers will continue to base their chocolate cravings on price, value and trends.

“We are keeping our chocolate sets current with a balance of old favorites and fresh new items,” said Gelber. “You never want to not have a new item that is backed by loads of marketing.”

Source: CStore Decisions

Snack Sales Climb

By: Howard Riell | March 18, 2024

Dollar and unit sales of salty snacks continue to trend upward even as inflation pushes prices higher.

Despite higher prices, customers are still snacking, and they’re seeking flavor innovation, protein, energy and taste from their snack options.

The convenience store salty snack category saw dollar sales of $8.08 billion, a gain of 14%, for the calendar year ending Dec. 31, 2023, according to Circana. Units sold topped 2.87 billion, a rise of 3.2%.

Today’s customers want flavor adventures from the snack aisle. Mintel reported that 23% of chip consumers in the U.S. want more limited-edition seasonal flavors. Demand is also up for health-boosting snacks. Mintel reported that one-third of U.S. customers say snacks with functional benefits are worth the price.

Some 74% of customers refuse to sacrifice taste when buying snacks. Meanwhile, 55% of customers cite protein as the most important nutritional attribute, and 60% want snack products to provide energy, per the fifth annual U.S. Snack Index by Frito Lay.

Pack size trends are also evolving. “The consumer has moved from the take-home packages to the immediate consumable bags,” said Tom Tucker, director of marketing for Maryville, Tenn.-based EZ Stop, which operates 25 c-stores.

“Frito items continue to provide most of our dollar sales and profit dollars,” Tucker said. “We finished 2023 with an 18% increase over prior years with Frito, while the salty snack peg section had a 26% decline in sales. Our top 20 selling Frito items accounted for 47% of the total sales and 53% of the total profit.”

There were only four large bags in the top 20, Tucker added. The remaining bags were $2.49 items.

“Flavors as a percent of the total were evenly divided with the exception of Doritos, which had 35%. Lay’s were at 20%. Cheetos, Funyuns and Ruffles were at 15% each,” he said.

EZ Stop has found that the standard two-fer promotion has become ineffective in delivering enough lift to offset the margin reduction.
“We moved to a product bundle program that has proved itself in building increased take rates and profit,” Tucker said.

The bundles include buying a bottled soda and getting money off a bag of chips, buying chips and getting a bottled soda for a reduced amount, or purchasing a bag of chips and a bottled soda and getting a roller-grill item free.

“Bundling the chips with an item that the consumer would naturally pick up has paid off for us,” he said.

Mastering The Basics

Increasing sales isn’t too complicated, Tucker noted. “These basics have not changed. Employ and train the best people. Have clean, well-organized stores. Price products with the market. Offer a loyalty platform for your customers.”

Bob Phibbs, principal, Retail Doctor Consultancy, said mastering the basics fuels sales and what’s good for the salty snack aisle is good for all other aisles: intelligent store layout. One of the most basic changes that can jumpstart salty snack sales is improved lighting. “Inside the store, you can enhance any merchandise’s visibility and store ambiance with better lighting,” Phibbs said, noting LED lights can reduce electricity costs while highlighting the salty snacks.

Source: CStore Decisions

Energy Drinks Enjoy Strong Sales

By: Zhane Isom | March 15, 2024

Energy Drinks will continue to thrive in 2024 as long as retailers keep innovation as a top priority.

The energy drink category finished 2023 off with a bang in terms of sales and is expected to continue thriving in 2024.

Dollar sales for energy drinks reached $14.1 billion, a 14.6% increase for the 52 weeks ending Dec. 31, 2023, according to Circana. Energy drink unit sales reached 4.67 billion, up 8.8% for the same period.

“Energy drinks have been one of the shining stars in refreshment beverages in recent years,” said Gary Hemphill, managing director of research for the Beverage Marketing Corp. “We expect solid volume growth of about 5% this year based on our preliminary projections. Dollar growth is likely to be even stronger.”

Red Bull, with $5.34 billion in dollar sales, up 9.3%, led the category, followed by Monster, with $3.85 billion, a 12.1% increase.

“I have observed a consistent growth trajectory in the energy drink market, with capacity expanding by approximately 9-10% annually,” noted Nicole Masullo, director of operations for Nittany Oil, which operates over 85 Minit Mart locations throughout six states.

Innovation is Essential

Energy drinks are mainly known and used to provide consumers with an energy boost to help them through the day. However, now, consumers are buying energy drinks for other reasons, including flavor, social media trends and health benefits.

Now that consumers want more from energy drinks, retailers need to start thinking outside the box when rearranging their offerings.

Hemphill mentioned that he has noticed innovation as one of the category’s key growth drivers and expects to see that continue through new flavors and various energy drink line extensions.

“Some trends in the energy drink category include a growing demand for healthier and natural ingredients and innovative flavors, such as the newest, hottest trend on TikTok or other social media outlets,” said
Masullo. “We have had several requests for new innovative products such as Rat Bastard and Prime.”

Aside from innovation, consumers are constantly seeking ways to reduce their spending costs when purchasing energy drinks since inflation is still causing price increases in some areas.

“Customers are seeking advantageous two-for-four deals,” noted Masullo. “Rather than making separate stops before and after work to purchase energy drinks, they now prefer consolidating both stops into a single trip.”

As 2024 continues, retailers need to home in more on innovation, whether it’s adding a new brand of energy drink or offering more flavor options to continue driving energy drink sales.

“My energy drink offerings typically consist of a two- to three-year set that embodies the latest trends from industry leaders such as Red Bull,” said Masullo. “We have plans to add more new items into our warm sets and work them into our cooler areas.”

Source: CStore Decisions

Investing in HBA Diversity

By: Anne Baye Erickson | March 13, 2024

Health and beauty products will always be in demand, allowing the category to continue seeing growth in sales.

The health and beauty aids (HBA) category offers something for everyone. Of course, there’s the convenience of picking up emergency pain relievers, first aid items or cold medicine. People also grab makeup products for last-minute touchups or buy haircare products on the way home after a busy day. That breadth of the HBA product selection enables convenience stores to meet an array of needs for a variety of customers. What’s more, it’s a category that can absorb a mix of new items and new promotional opportunities.

“I see changes every year. (When) a new item comes out, you must try to give it a chance, to have it in your store for three months,” said Faiz Simon, president of Island Lane Capital, which owns Simon Xpress in Warren, Mich., and 14 other sites under a different banner name. “The items I see growing are energy items as well as supplemental to alcohol or tobacco relief.”

“Dermatology-influenced skincare products, such as CeraVe, as well as vitamins, supplements and haircare with Olaplex have driven the largest year-over-year growth at the Army & Air Force Exchange Service (AAFES). Aluminum-free natural deodorants and men’s grooming and personal care, such as Duke Cannon and Manscaped, were the top-performing brands in 2023,” said Kye Corn, division merchandise manager for AAFES. AAFES exclusively serves U.S. military personnel and their families on bases around the world.

Although Simon sees the potential that new products or diversifying selections offer, he noted space limitations dictate how varied a store’s HBA inventory can be. At AAFES, Corn takes advantage of generous shelf real estate. This year, he hopes to address the needs of the customers more holistically.

Expanding Assortment

“In 2024, the Exchange’s focus will be on embracing diversity and celebrating every individual’s unique beauty and wellness. The strategy for 2024 is to expand the assortment on skincare supplements, men’s skincare, pro-age, mature skin, professional haircare and natural, clean products,” he said.

That’s not to say he’ll overlook the category’s staples, some of which registered notable bumps last year. Circana market analysis of c-stores confirmed vitamins remain a hot HBA product, with approximately 23% growth in both sales and units. Weight-control offerings posted double-digit gains, 36.6% in sales and 24.2% in units. Cosmetics were a big beauty mover for c-stores in 2023, especially eyeshadows, which boasted a jump of more than 274% in dollar sales and nearly 292% in units.

While HBA transactions may not add up to the levels of tobacco, fuel, beverages and snacks, the category does offer c-stores the opportunity to serve customers’ needs, not just impulse buys, and that reinforces the convenience factor with each purchase.

Source: CStore Decisions

Doughnuts, Cookies Offer Opportunity for Bakery

By: Marilyn Odesser-Torpey | March 5, 2024

Customers may choose to purchase certain bakery items from a c-store to treat themselves or others or for health reasons.

2023 was a “mixed bag” for the bakery category, with dollar sales up 6.3% and unit sales down 2.1%, stated Jack Ince, education coordinator for the International Dairy Deli Bakery Association (IDDBA), quoting data from the company’s Integrated Fresh Data dashboard.

He attributed much of the unit sales drop to inflation.

“Bakery has often been viewed as an impulse buy, which can negatively affect the unit growth,” agreed Whitney Atkins, IDDBA’s vice president of marketing.

The good news, IDDBA reported, quoting a 2023 Circana “Omnibus” survey, is that 30% of shoppers said they continue to make impulse purchases to reward themselves, and 29% said they do it to treat someone else.

C-stores can capitalize on this mindset in 2024 to boost bakery sales.

The survey also pointed out that many of the smaller, handheld items are showing unit growth from last year.

“Doughnuts stand out as a top performer ranking highly for total dollar/unit sales growth percentages,” Ince elaborated.

He continued that cookies, specifically the more modern style of giant, chewy cookies with surprising flavors and over-the-top toppings, have been steadily gaining popularity in the quick-service restaurant dessert world.

“Retail bakeries can absolutely take advantage of this trend,” he said.

At Dysart’s Travel Stops’ nine locations in Maine, cookies baked in the company’s proprietary commissary are a main attraction.

“Pumpkin chocolate chip cookies are our biggest sellers year-round, probably because they’re so unusual,” noted Tim Dysart, vice president of the company. “Chocolate, pumpkin and other flavored whoopie pies are always in high demand, and we can never make enough of our no-bake chocolate and peanut butter cookies.”

Because cookie sales are consistently high, Dysart’s stores offer between eight and nine varieties at any given time. Doughnuts and banana-chip and pumpkin-chip sweet breads, whole or in two-slice packs, are other customer favorites, pointed out Megan Guenther, Dysart’s general manager.

The Health Factor

Another element with an impact on the bakery category is increasing consumer interest in “healthier” products, “although what that means to consumers varies drastically from one to another,” Ince said.

“Many consumers will be drawn to sourdough breads or a seeded loaf, seeing it as a functional food, while others will see an occasional treat like a doughnut as great for their mental health,” he remarked.

Ince stated that portion-controlled treats are attractive to a growing number of consumers. Cupcakes, for example, saw a strong increase both in dollar sales (41.7%) and units sold (8.7%) versus two years ago.

“People don’t bake at home anymore, so there’s always a place for a good bakery,” Dysart said.

Source: CStore Decisions

Refreshing the Roller Grill

By Marilyn Odesser-Torpey | February 28, 2024

Hot dogs and sausages boost roller grill sales at c-stores, but customers also enjoy new flavors and seasonings.

As roller grills beef up offerings with innovative flavors and trendy toppings, they have the opportunity to be an integral part of c-store foodservice programs in 2024.

York, Pa.-based Rutter’s has a roller grill in every one of its 85 stores in Pennsylvania, Maryland and West Virginia, featuring a wide array of products, said Philip Santini, senior director of advertising and food service for Rutter’s.

Among the stores’ roller grill items are hot dogs, egg rolls, sausages, chicken roller bites and tornados. Santini pointed out that the company is “always looking at new options with different flavors, seasonings and combinations as they are introduced.”

Looking at the year going forward, Santini stated, “I believe there is a chance to broaden the range of flavors available, and we see an opportunity in allowing our guests to customize their items.”

He anticipates that the category will at least maintain its current level, but with the introduction of new products and flavors, he believes that Rutter’s “can observe an increase” in sales over the coming months.

The appeal, he said, is that roller grill items are “versatile, quick, convenient and affordable.” For the retailers, the grills provide consistent cooking that helps maintain the quality of and expectations for the products.

While lunch is the peak daypart for roller grill sales, the category is popular in all dayparts, Santini pointed out.

Hot Dogs and Sausages

Hot dogs and sausages are two of the roller grill’s most popular items. Total hot dog sales rang in at $2.99 billion and 896 million pounds, reflecting slight decreases (0.1% and 1.2% respectively) in 2023 over 2022. Total dinner sausage sales increased a bit (0.2%) to $5.3 billion and decreased 0.2% in pounds to 1.2 billion, according to the National Hot Dog and Sausage Council.

“Americans love hot dogs and sausages as delicious staples that offer affordable protein and many other nutrients in their diet,” said Eric Mittenthal, president of the Council. “Even with more products of all types offering protein available on the market, hot dog and sausage sales remain strong as families continue enjoying the products they’ve loved for generations.”

New products, Mittenthal reported, are mostly brand favorites reformulated with a reduced fat content or increased protein content. In the last few years, new products in flavors such as honey and brown sugar, barbecue, Cajun, spicy, and teriyaki have been introduced. A consumer survey last year revealed that 60% of consumers (mostly older) preferred all-beef hot dogs, while younger consumers preferred hot dogs made from other proteins such as pork and chicken.

Source: CStore Decisions

How to Meet or Exceed Customers’ Food Expectations

By: Bruce Reinstein | Partner with Kinetic12 Consulting | February 26, 2024

Follow these six tips to ensure you’re satisfying customers’ wishes with your menu offerings and the overall foodservice experience your store provides.

When it comes to foodservice, what is the consumer looking for? The answer is not a simple one. It will vary from market to market and location to location. Regardless of the market or location, consumers’ expectations have dramatically increased. This is mainly due to cost inflation in all aspects of their lives.

Where convenience store foodservice used to be about convenience alone with limited expectations, it is now about convenience with “over the top” expectations. This involves quality of product, great service, excellent value and an environment that is clean, easy to navigate and has clear differentiation from others.

From Kinetic12’s Q4 Emergence Convenience Store Foodservice Group Report

Here are six strategies for meeting or exceeding customers’ foodservice expectations in 2024.

1.) Consistent execution: Keep it simple. Regardless of what the consumer is purchasing, they want it the same way every time. They have made the choice to visit your brand and expect that it will look and taste the same every time or they will be forced to choose an alternative.

Customers are well educated in today’s marketplace. They understand when portions and quality have been reduced. They no longer have patience for labor shortages or other excuses. The result must be achieving the same standard of quality every time.

Operators must keep their menu simple with as few steps as possible for their staff. Taking the potential for problems out of the equation will ultimately lead to the guest satisfaction.

2.) Well-trained staff focused on the guest experience. A great team starts with great leadership. It is very apparent to customers when team members are enjoying their time at work. It is clear when their focus is on providing customers with great products with an even better experience.

Management must provide a solid team engagement platform to allow team members to voice their thoughts on all aspects of what can drive an outstanding, consistent guest experience. Engagement areas include menu options and standards, packaging, technology integration and loyalty. There must be a clear focus on training with incentives for employees to gain training on multiple stations.

Team members are looking for a quality work-life balance. A happy team member will perform at a higher level and the guests will reap the benefits.

From Kinetic12’s Q4 Emergence Convenience Store Foodservice Group Report

3.) Technology integration. There are many options for operators regarding technology, but there is a significant cost associated with these options. The best option is one that enhances the customer experience. If you can make it easier for customers, it becomes that much easier for the staff to execute the orders.

Improved online ordering, mobile apps and digital/touchless payment options can have a positive impact on guests. It can also potentially raise the average check by putting orders in the hands of the consumers instead of the employees.

4.) Continuous menu innovation: Adapt to trends. Today’s consumers want new options to pique their interests. It is true that people tend to be creatures of habit, but these habits are changeable based upon several factors.

Differentiation continues to be a crucial factor in what drives a consumer into a foodservice operation. Quality, consistent products remain the top desire of customers. It also must be consistent every time, whether it is eaten on premises, in their car or after delivery.

Consumers are also more educated about food and beverages as they are watching more cooking shows and are more engaged at home in preparing trendy foods. They expect to see their favorites available, but also new and exciting options.

5.) Provide great value: Understand your customers. Value is defined in many ways. It is not just about the price. A c-store foodservice operator must understand their customers’ preferences, needs and expectations to decide on the type of menu, service levels and environment that they will have. Value may be defined by the least expensive price alone, but for many consumers, there is a balance they look for between price and value.

It may be about portion size, quality, how the product holds up from purchase to home, ability to consume the product while traveling, time it takes to get the product after ordering, ability to customize and so much more. In the end, consumers want to feel that the operator met or exceeded their expectations. Customers will pay different prices for that perceived value.

From Kinetic12’s Q4 Emergence Convenience Store Foodservice Group Report

6.) Consumer engagement: Be flexible and adaptive. Never assume you fully understand your customers. It is crucial to keep them engaged and listen to their needs. One thing that is very clear is that consumers want it to be easy to order, pay for and receive their food and beverages. It should not be difficult for customers to figure out where to go or what to do to get their food and beverages.

There also must be some level of customization available for consumers. Yes, grab and go is crucial and those products are ready for the customer to choose and take with them, but some customers want it “their way.” Loyalty is based upon great execution, but also providing the customer with a voice. They know what they want, and their feedback provides the operator with the ability to adapt. It is important to be flexible rather than upset by change.

Source: CStore Decisions

Bruce Reinstein is a partner with Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm. The firm works with leading foodservice operators, suppliers and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. Join the Emergence Convenience Foodservice Group and get two detailed reports per year and the potential to attend Kinetic12’s April and November foodservice forums. For more information: Kinetic12.com or [email protected].

Six Strategies for Coping with Inflation in Convenience Store Foodservice

By:  Bruce Reinstein | January 18, 2024

Staying on top of your business minimizes the impact.

Convenience store foodservice operators are coping with inflation in different ways, but it is the consumer that has had to make serious adjustments to their spending habits. It is up to operators to provide their customers with quality options at a manageable price.

This is something that is quite doable as long as the operator is open to making changes that will not affect the size of the portion or quality of the product. Consumers have gotten very educated from these tactics and value is their main focus when it comes to a positive experience.

Operators look at cost inflation as the No. 2 biggest obstacle to revenue growth.

Here are six strategies for coping with inflation in c-store foodservice.

1. Do not use inflation as an excuse for reduced profitability.

The foodservice industry has always had ups and downs when it comes to cost inflation. This relates to food and beverage, packaging, staffing and all other costs. There is a tendency to dwell on the negatives and look at those as the reason you can’t be profitable.

Inflation should become the impetus to driving new revenue and creatively adjusting costs. Consumers have a choice as to where they go, and those operators that focus on consistent execution, great speed of service, a welcoming environment with engaged team members and a mindset to avoid being transactional will be the winners in times of cost inflation.

2. Adjust your menu offerings to provide value at a manageable cost.

Convenience store foodservice customers are looking for great tasting food and beverages, speed of service, good value and convenience as their greatest expectations. To meet or exceed these expectations, operators must make some menu and operational adjustments. Having a balance of meeting customer expectations and being profitable has challenges but is very doable.

It starts with the menu. What is selling, what is not selling and what are customers craving? What is the cost structure of all of these items and are there menu items that are complicated to prepare and take too long for the customer to get? Is there a grab-and-go program that provides customers with the opportunity to get what they want at a faster pace?

These are questions that have to be asked constantly, and adjustments that have to be made quickly and efficiently. While doing this, it is crucial to avoid reducing quality or portion size.

3. Work closely with your manufacturer and distributor partners.

Foodservice operators must lean on their manufacturer and distributor partners. Many of them have the capabilities to support operators through culinary, marketing and data. They also have the knowledge to support cost reduction by providing alternative products at a better price that match the quality standards of the operator’s business. In addition, supplier partners can provide labor savings options, including speed scratch and par baked items.

It is important to challenge your manufacturer and distributor partners. They have many solutions to potential cost inflation problems.

4. Focus on staff engagement and create a winning environment.

A great team can only be attained with great leadership. The cost of labor is higher than it has ever been, but with solid productivity and limited turnover, higher labor costs can have minimal effect on the bottom line.

Convenience store foodservice operators can minimize the cost of labor by cross training their teams and avoiding just filling slots with “bodies.” Creating an excellent work-life balance for team members and management, along with making going to work fun, will not only be positive for the staff, but also for customers.

Staff engagement is crucial to success. Leadership must value their thoughts and recommendations to keep them focused on doing a great job and making a difference in the customer experience.

5. Improve execution to create better consistency and less waste.

Great execution starts from the time the delivery truck comes to your door.

Refrigerated and frozen products must be put away quickly and efficiently with proper rotation to avoid waste. Prep in the kitchen should be simplified and speed scratch products, as well as further processed ingredients such as broccoli florets, should be added. It may appear to be more expensive, but reducing labor, throwing less useable products in the trash and being more consistent will ultimately lower costs.

The same holds true with the production of menu items. Keeping it simple and having great training will have a positive effect on the execution of what the guest has ordered. It will also bring them back more often.

6. Don’t be afraid to make changes.

There is a tendency to protect the “sacred cows.” Most of the time, these menu items are not as popular as you would think and, in many cases, they are not as profitable as other items.

The consumer has changed, and operators must change with them. This involves making it easier for customers to order, pay and pick-up, as well as providing the type of menu selection and value proposition that will keep them coming back.

The consumer wants quality food and beverage with great service. They also want it that way every time. It seems like a daunting task, but if operators are willing to adjust, they can appease the desires of their guests and in the long-term, that means happy, loyal customers and greater profitability.

Bruce Reinstein is a partner with Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm. The firm works with leading foodservice operators, suppliers and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. Join the Emergence Convenience Foodservice Group and get two detailed reports per year and the potential to attend Kinetic12’s April and November foodservice forums. For more information: Kinetic12.com or [email protected].

Source: CStore Decisions

Looking Ahead in 2024

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

Snacking Study Finds Customers Are Feeling the ‘Time Crunch’

By: Kevin McIntyre | January 2, 2024

Frito-Lay and Quaker revealed in its fifth annual U.S. Snack Index that one-third of Americans have just 30 minutes to prepare and enjoy meals.

Frito-Lay and Quaker have joined forces to unveil the fifth annual U.S. Snack Index, which confirms that many U.S. consumers see time as a main factor when preparing meals. The report noted that a lack of time to prepare, eat and enjoy meals — especially among parents and younger generations — will blur the once-clear line between “snacks” and “meals” in 2024.

“While Frito-Lay and Quaker’s latest Snack Index confirms that time is scarce, the data also reinforces the fierce passion that consumers have for their food preferences,” said Denise Lefebvre, senior vice president of R&D for PepsiCo Foods. “As we look to 2024, we have a tremendous opportunity to continue meeting the evolving needs of our consumers. It has never been more important for us to infuse that inspiration with innovation, delivering on our promise of more smiles with every bite.”

Frito-Lay and Quaker unveiled the three food and snacking trends poised to shape the year ahead:

The Time Crunch Dilemma

While there might technically always be 24 hours in a day, 80% of Americans feel like their days actually have fewer hours. This burden is most acutely felt by younger generations (85%) with no sign of letting up, as 60% of consumers expect demands to increase in the new year.

In 2024, Americans will say goodbye to hours spent marinating, chopping, roasting or baking. A proliferation of the “no-prep dinner,” defined as a simple meal that requires little effort to make, will continue to grow in popularity, alongside dinners rooted in Americans’ favorite snack products.

  • A Dash to Dine: According to the Index, the average American has only 52 total minutes per day to prepare, eat and enjoy their meals. One-third of consumers note having even less time, scraping together less than 30 minutes a day to prep and enjoy meals.
  • Snacks Move to Center Plate: More consumers are integrating their favorite snack products into meals, up 35% over previous years. Once a week, over half of consumers proudly use snacks as a key ingredient in no-prep dinners, while more than one-third seize this opportunity multiple times a week.
  • Top Truths: When asked why snacks are an important part of their no-prep repertoire, Americans report yearning for a specific snack (51%) and being too busy to cook (44%) as the top rationale.
  • #GirlDinner Debunked: The internet might have dubbed snack-focused meals as #GirlDinner, but in 2024, the trend is for everyone. Men (92%) report being just as likely to use snack foods in meals as women (93%), with 36% pushing snack and meal boundaries more than in previous years.

Introducing the Snack Savant

The rise of the self-proclaimed Snack Savant will undoubtedly make waves in 2024. There is no shame in their snack game, as the Savants proudly embrace all things food, adventure and community:

  • Defining the Snack Savant: Millennials (83%) and Gen Z (82%) are most likely to embrace this title, with the majority of these Snack Savants also being city dwellers (77%). They are resourceful — 55% report their favorite snack combinations are inspired by what is already in the pantry — and lean on social media for additional ideas (32%).
  • Snacking as an Art, Not an Act: 80% agree that combining multiple food products to create the perfect bite is an art form. While 65% admit to having eccentric snack combos, they are not the slightest bit embarrassed and will proudly “shout their unique combos from the rooftops” anyway.

Snacking for Tasty Satisfaction

In 2024, snacking will be centered on the importance of purpose, protein and packing a punch:

  • Protein Power: When eyeing snacks at the grocery store, Americans cite protein as the most important nutritional attribute (55%). Compared to previous years, an overwhelming 79% of consumers admit it’s more critical than ever for protein to take center stage — especially true for those most crunched on time (80%).
  • Energy Boost: At least once a week, 60% of consumers look to their favorite snack products to provide energy. Millennials (72%) are by far the generation most in need of a pick-me-up, compared to Gen Z (62%), Gen X (61%) and Baby Boomers (46%). Parents have everyone beat, with 72% leveraging snacks for energy.
  • Taste Triumphs: Across generations, nearly three-quarters of consumers (74%) refuse to sacrifice taste when selecting their snacks. Baby Boomers are the most unwilling to compromise on taste (84%), followed by Gen Xers at 75%.

This survey was conducted between Dec. 6 and Dec. 12, 2023, among a national sample of 2,000 nationally representative U.S. adults ages 18-plus. The interviews were conducted using an email invitation and an online survey. The data has been weighted to ensure an accurate representation of the U.S. adult population ages 18-plus.

Source: CStore Decisions

Meat Snacks Evolve With Consumers


By: Howard Riell | November 6, 2023

While inflation plays a role with meat snack sales, c-store retailers are finding ways to draw consumers to the category, including by stocking changing flavor and package size preferences.

Stubborn inflation may be impacting meat snack sales at c-stores, but loyal customers are still finding ways to grab their favorite meat snacks on the way out the door.

Price aside, health concerns, taste trends, package size and promotions that stress value have become more important than ever.

For the 52 weeks ending Sept. 10, sales of dried meat snacks across the c-store channel totaled $2.2 billion, down 1.4%, according to Chicago-based market research firm Circana. Within that category, jerky notched sales of $872 million, a drop of 5.1%.

“In the U.S. convenience store market, meat snacks have a positive sales outlook, with a compound annual growth rate of 7% from 2022 to 2027, reaching a total value of $1.7 billion in 2027,” reported Hannah Cleland, an analyst in the consumer division of GlobalData. “Convenience stores are an important channel for meat snacks, accounting for 25.6% of all U.S. retail sales in 2022 and increasing to 26.4% by 2027. This said, convenience stores and meat snack brands will have to address evolving consumer trends in order to stay competitive.”

Pricing Predicament

Despite meat snack sales only dipping minimally across all c-stores, per Circana, individual chains are seeing different results.

“All brands have seen a major decline in unit sales thus far in 2023. Customers seem to definitely be monitoring how they spend their money,” said Mike Jackson, category manager for Carroll Motor Fuels’ High’s Stores, which operates 60 c-stores in Maryland, Delaware and Pennsylvania.

“The higher costs and retails on meat snacks have definitely impacted sales. I believe customers are looking at the high retails on the larger bags and are choosing to spend that money on something else. When a bag of jerky costs almost the same, if not more, than a sandwich and a drink, the customer is deciding to spend their money on a meal,” he continued.

Additionally, Cleland pointed out that meat snacks typically have a higher price point than other savory snacks, such as nuts and potato chips. “Brands will have to combat this through meat snacks’ positioning as on-the-go, nutrient-rich products as additional justification of value,” she said.

For those customers choosing to purchase meat snacks at High’s, it seems as though sales have seen a return to the stick segment.

“The majority of SKUs showing increases in unit sales compared to last year are the lower-priced sticks. The 3.25-ounce jerky has seen a significant decrease, but the largest decrease has been the larger 10-ounce-sized bags,” reported Jackson.

High’s stores feature meat snack endcaps that are highly visible to customers and carry both stick and jerky products.

“This allows the customer to compare prices and determine for themselves what the best value is,” Jackson noted.

Jackson explained that High’s has implemented a variety of promotions this year to help garner sales.

“With retails so high, doing any kind of two-fer or bundle promotion is problematic. The price point is just too high for customers to consider it a value,” he said.

At the Army & Air Force Exchange Service’s (AAFES) stores, on the other hand, “our two-for-$12 pricing is seeing great results,” Randy Demster, the system’s consumables meat snacks buyer, reported. “In addition, bundling a meat snack and a beverage is a very effective promotion.”

Trend Alert

Health and wellness remains the most influential consumer trend in shoppers’ product and service choice, according to GlobalData’s TrendSights consumer trend framework.

“Meat snacks, which can be viewed as highly processed, fatty and salty, will have to improve formulations and marketing to persuade customers of the health benefits,” Cleland said. “For instance, leaner cuts of meat could prove beneficial due to low fat and high protein content, if positioned correctly.”

Additionally, meat substitutes and plant-based products could still stand to offer a nutritionally and sustainably superior alternative to meat snacks, GlobalData found. However, the plant-based/meat-substitute market has been struggling with dampened growth projections and formulations and production processes yet to be perfected.

“Alternate protein sources such as chicken and pork are a growing trend in meat snacks at the Army & Air Force Exchange Service’s Express stores,” said Demster. “Bulk bagged meat sticks and beef jerky are trending, as well.”

AAFES operates more than 580 Express c-stores.

At present, Demster has added Jack Link’s, Old Trapper, Cattleman’s Cut and No Man’s Land Beef Jerky, which are all hot brands at Exchange stores.

“The fastest-growing flavor is hot-and-spicy, and the Exchange is seeing unit movement increasing in the core sizes of two-ounce and 3.25-ounce bags,” he said.

Inflation has caused shoppers to move to smaller pack sizes in meat snacks.

At High’s, spicy items are also still at the top of unit sales.

“Meat snacks are an impulse buy and should be merchandised on queue lines and in self-checkout lanes,” Demster recommended. “Shippers are also a great way to merchandise the products, creating secondary locations in the store and increased takeaway.”

Source: CStore Decisions

Health & Beauty Feels the Pinch of Product Shortages & Inflation

By: Debby Garbato | October 31, 2023

As challenges linger around the category, some consumers are turning to larger packages for better value.

NATIONAL REPORT — A Pounding Headache or stuffy head cold cannot wait, making health and beauty care (HBC) the second most profitable convenience store category after ice. However, despite its “immediate need” nature, supply shortages and inflation are hitting HBC harder than other product categories. This is prompting some retailers and suppliers to seek alternative resources and keep tight reins on inventory.

Subcategories most affected by out-of-stocks include over-the-counter (OTC) pain relief, one of the biggest segments, as well as feminine hygiene. While overall c-store transactions and store traffic have improved, the HBC business is still feeling the fallout of COVID-19 related manufacturing shortages. On the pricing end, average retails across HBC increased 7.4 percent vs. last year, according to Nielsen. And in some segments, the increases were in the double digits.

“You can’t talk HBC without talking supply chain,” said Cameron Baer, center store category manager for York, Pa.-based convenience store chain Rutter’s. “It hit HBC really hard; subcategories are still affected, requiring constant item changes. Other categories are closer to normal, but HBC has had a harder time recovering. We have pivoted many times, switching suppliers and switching back when inventory becomes available. It’s essential we offer what consumers are looking for.”

For most c-stores, HBC represents just 1 percent or less of in-store sales. But average gross margins in the category are significant, rising from 50.8 percent in 2021 to 51.95 percent in 2022, according to NACS data. HBC’s destination nature furthers its value.

[Read more: Cultivating the C-store HBC Habit]

Favoring Food, Drug & Mass

With some ingredients in short supply, HBC vendors are favoring food, drug and mass accounts, which comprise the majority of their business and involve larger package sizes.

C-stores, in contrast, favor small packages merchandised in inline sections of about four feet, along with clip strip packets of OTC drugs and vitamins merchandised behind the register. Clip strip packaging is made specifically for convenience stores.

“Suppliers are focusing on large packages, which is generally what you don’t find in c-stores,” said Baer.

One component that has been difficult to procure is the Mylar-type film that lines single dose clip strip OTC packets. Ron Andrews, national sales manager at Elk Grove, Ill.-based Modern Aids Inc., explained that many packaging components come from overseas, namely China. While the pills are produced by major suppliers, Modern Aids makes its own clip strip packets. It also supplies c-stores with nail clippers and small packages of razors, shampoo and diapers.

The situation has become a huge headache as trial sizes of OTC pain, stomach and upper respiratory medicines comprise 73 percent of convenience channel HBC unit share and 51 percent of dollar share, according to Nielsen figures.

In feminine hygiene, certain tampon applicators have been hard to procure, said Michelle Ridder, director of category management at Lil’ Drug Store Products, an HBC supplier based in Cedar Rapids, Iowa. Consequently, Tampax’s percentage of the c-store segment dropped 9 points to 40 percent during the first half of the year, Nielsen data shows, while Playtex’s share increased from 8 percent to 12 percent, and Stayfree doubled its share to 8 percent.

“[This is] an example of how an immediate-need item is more important than brand,” Ridder pointed out. “I heard problems will persist into 2024.”

Baer echoed that it has been “hard to acquire” single-use and small multipacks of tampons. When it comes to brand, he reiterated Ridder’s thoughts: “Whether it’s changing a brand or having a different SKU, some product is better than none.”

Wallet Squeezing

No doubt, inflation is impacting spending. In c-store HBC, skincare has taken the hardest pricing hit (up 12.9 percent), driven by double-digit increases for Old Spice, Secret, Axe and Degree, said Nielsen. Feminine hygiene is a close second (up 12.6 percent), with the prices of eight top SKUs up double digits. Ridder reported that she has also seen steep condom price increases. “One major retailer increased them by $1.50,” she shared.

In OTC medications, inflation has driven single dose demand. “When the SRP [suggested retail price] rises, people just buy two pills to get the job done,” said Andrews. “The days of larger purchases are past. Price increases have changed many things.”

Still, single doses dominate. “Take-home packages are growing and have the highest ring, but single doses remain the majority of unit sales,” Fasel added. “The biggest challenge is finding the balance between single dose and take home to maximize dollars without sacrificing unit sales.”

While retailers and suppliers must profit, raising prices is tricky. They must carefully analyze what the market will bear. “It’s all about price elasticity,” said Andrew Csicsila, North American leader of the consumer products practice at AlixPartners in New York.

Price acceptance does vary by retail channel. For instance, while big-box shoppers think about prices for planned market basket purchasing, c-store consumers often want one or two immediate-need items, even if the products are more expensive than elsewhere.

HBC Opportunities

Despite the higher prices and shortages, there are some opportunities in the c-store HBC business. Depending on the retailer and market, these can include supplements (both traditional and “trendy”), private label and larger assortments.

During the pandemic, c-store vitamin and supplement sales skyrocketed. While growth has slowed, Mason Vitamins Senior Vice President of Sales and Business Development Chuck Tacl believes there is room for growth in clip strip or peggable small packages.

“We think there’s a void, with strong household penetration after COVID,” he said. “Key areas people are looking for are immunity, sleep and stress relief. There’s maybe three to five items that would resonate.”

Innovation in a category dominated by basics tends to grab attention. “Whenever retailers offer innovative items in new flavors and formats, it allows them to stand out against [their] competition,” said Kristen Thaler, category manager of the Center for Category Innovation at Temple, Texas-based distribution company McLane Co. Inc.

Tacl pointed out that retailers need to learn which products are reliable. Both packaging and ingredients are concerns. “The distributor, retailer, supplier and consumer need to be educated on what products are efficacious and which ones you should question. … I’ve seen gummy supplements in clear plastic. They need more stable, foil type packaging so the sun doesn’t break down effectiveness,” he said. “There’s opportunities in c-stores for reliable supplements.”

Most HBC products stocked at c-stores are from branded suppliers that consumers trust. “Sets are mainly comprised of national brands that consumers recognize,” Fasel added. “There’s more skepticism around fad and quick-fix products because they lack brand recognition.”

Rutter’s Baer avoids fad products. “How do you gain trial?” he said. “How do you make sure it’s going to stick? It’s a fad. We’re in the business of providing consumers with what they’re looking for.”

Private label HBC products, on the other hand, are not a fad. They have been proven to enable c-stores to generate even bigger margins while controlling package size and appearance.

The HBC category’s small size, though, makes private label only viable for large chains.  7-Eleven Inc. rolled out 24/7 LIFE about three years ago. The line, which encompasses several nonfood categories, includes OTC drugs, toiletries and other HBC items.

McLane offers a private label alternative under its Consumer Value Products (CVP) banner. CVP spans multiple categories. HBC items include bath tissue, ibuprofen, baby wipes, deodorant and OTC stomach relief. “It’s a great option for smaller retailers who want to incorporate private label into their strategy, but can’t offer a line of their own,” said Thaler.

Source: CStore Decisions

Should I Start a Dispensed Tea Program?

By: Howard Riell  | October 27, 2023

As customers search for better-for-you options at c-stores, tea could prove a rewarding option.

Convenience operators wondering whether or not they should introduce a dispensed tea program at their stores need to know that there are solid reasons why the answer should almost certainly be yes.

For convenience store retailers across the United States, dispensed teas, like dispensed waters, remain part of an overall trend favoring dispensed beverages in general, including coffee, nitro brews, waters and energy-infused drinks — all of which are viewed by consumers today as better-for-you choices. It shares the spotlight with a host of dispensed beverages that are non-GMO, organic and use pure sugar cane instead of corn syrup, including flavored lemonades and functional/dietary beverages.

At the same time, Americans have clearly demonstrated a thirst for flavored teas. To no one’s surprise, accommodating c-store retailers have responded by rolling out fresh-brewed flavors such as raspberry, papaya, green tea, mango black tea and raspberry black tea.

In general, consumers pick up coffee at convenience stores because it gives them a shot of energy. On the other hand, tea — oolong, black or green — offers an alternative and is a gentler beverage. With L-Theanine effectively modulating the onset of caffeine’s energy boost, it can also decrease stress, jumpstart creativity and help provide focus.

Cold dispensed beverages have proven to be a significant profit generator for the convenience store channel. For one thing, the size of the drink is more adjustable than with a bottled or canned beverage out of the cooler. Dispensers also create the option of blending multiple drinks. The cup also permits consumers to add ice in any amount, sometimes in a choice of shapes, to their drink. Added value in the form of free refills is also a powerful attraction.

Tea can also provide another reason for customers to enter the store, especially for those customers who don’t drink coffee.

According to Statista, per capita consumption of tea is expected to rise, having stood at 430 grams in 2022. Additionally, the global tea market value is expected to rise to $160 billion by 2028.

Source: CStore Decisions

Gen Z Favors Both Dispensed and Bottled Beverages

By: Kevin McIntyre  | October 27, 2023

A recent survey found that the generation exhibited a preference for both cold dispensed beverages and packaged beverages, compared to other generations.

With the beverage category constantly evolving and mutating, it is incredibly important as a retailer to understand your customers’ preferences.

A recent survey conducted by FoodserviceResults, with support from CStore Decisions and the National Advisory Group (NAG), found that Gen Z prefers cold dispensed and packaged beverages more than other generations.

The survey found that 37% of Gen Z customers purchased a cold dispensed beverage at their last c-store visit, and 24% purchased a packaged/bottled beverage.

Participants from four generations were surveyed about their c-store purchase behavior, with categories such as packaged foods/snacks, hot prepared foods and more being reported on.

The report, titled “Understanding the Food-Focused C-Store Shopper,” surveyed 2,002 U.S. convenience store food and beverage customers about their purchasing behaviors.

Source: CStore Decisions

Fuel, Dispensed Beverages and Grocery Items Drive C-Store Visits

By: Kevin McIntyre  | October 25, 2023

A recent survey found that one in three respondents noted gas as the primary purchase that motivated them to visit a c-store, with dispensed beverages and pantry items following behind.

While it is no surprise that fuel remains the driving force when it comes to c-store visits, there are a variety of offerings that have proven to be essential for retailers looking to provide for their community and customer base.

Two options that stick out are cold dispensed beverages and pantry/grocery items.

A recent report by FoodserviceResults, working alongside CStore Decisions and the National Advisory Group (NAG), titled “Understanding the Food-Focused C-Store Shopper,” found that 10% of c-store shoppers consider cold dispensed beverages to be the “primary purchase” that motivated them to visit, with an additional 10% saying the same about pantry/grocery items.

Participants were also surveyed about frozen dispensed beverages, hot dispensed beverages/coffee, hot prepared foods and more.

The report surveyed 2,002 U.S. convenience store food and beverage customers about their purchasing behaviors.

Source: CStore Decisions

Recent Study Shows Importance of Food Safety Education

By: Kevin McIntyre  | September 20, 2023

The study highlights handwashing, thermometer use and cross-contamination as main points of emphasis for kitchen behavior.

The U.S. Department of Agriculture (USDA) has released results from a five-year study that observed how consumers prepared meals. Produced by USDA’s Food Safety and Inspection Services (FSIS), the study highlights the importance of safe food handling practices.

“These studies are important for USDA to understand consumer behaviors in the kitchen and it is timely to be releasing the latest findings during Food Safety Education Month,” said USDA under secretary for food safety Dr. Emilio Esteban. “The results allow us to shape food safety communications and help consumers safely prepare food.”

The study observed food safety behaviors, including participants’ thermometer use for ground pork sausage, handwashing and cleaning and sanitizing of food preparation surfaces.

Handwashing

As seen in the previous four years of the study, thorough handwashing remains a concern. The most recent data shows that 87% of participants self-reported they washed their hands before starting to cook in the test kitchen. However, only 44% of participants were observed doing so before meal preparation. Additionally, handwashing was not attempted 83% of the time when it should have been done (e.g., touching raw sausage and unwashed cantaloupe, cracking eggs, contaminated equipment or surfaces). Throughout the study, 96% of handwashing attempts did not contain all necessary steps.

Thermometer Use

In the study, 50% of participants used a food thermometer to check the doneness of the sausage patties. However, 50% of those participants did not check all the patties with a food thermometer. It is important to check all pieces of food being cooked to ensure all have reached a safe internal temperature. Thickness and size of a food item can cause it to cook to different temperatures.

Cross-Contamination

The study used a harmless tracer bacteria, which was injected into the pork sausage, to simulate the spread of foodborne illness-causing bacteria during meal preparation. Among the surfaces tested, the kitchen sink was most often contaminated, with 34% of participants contaminating the sink during meal preparation. The next highest was the cantaloupe, with 26% of participants introducing contamination when cutting the cantaloupe during meal preparation. Contamination on fruits and vegetables, and other ready-to-eat foods, is especially concerning because these foods are consumed raw, without a final step like cooking, which kills bacteria.

Source: CStore Decisions

Balancing Simplification With Sustainable Foodservice Growth

By: Bruce Reinstein | August 11, 2023

Keeping it simple, but maintaining standards is key for c-store foodservice success.

Simplification does not mean lowering standards.

During the last few years, the foodservice industry was forced to simplify its operations due to labor shortages, supply chain disruption and cost inflation.

“Sacred cows” were eliminated from menus, and in most cases, consumers did not miss many of the items that were eliminated. The idea of trying to be everything for everybody was not possible and still is not. The simplification mindset works and will stick as we move forward, but simplification has nothing to do with reducing quality standards. It is actually about raising the bar on standards by taking the complexity out of the business for both the staff and customers.

Here are six steps to balancing simplification with sustainable foodservice growth:

1. Establish consumer friendly order/payment/pickup. If a customer can’t figure out the order and payment process, and is not clear on where to pick up, an operator is unlikely to get this customer back a second time. Whether on a phone, pump, computer, kiosk or face to face with a cashier, the process must be simple and easy to navigate from beginning to end. The pickup process must be equally simple, and there should be multiple pickup options to choose from, including pickup windows, curbside, pump side, drive through and more.

2. Don’t over-complicate the menu or the process. Providing consumers with the ability to customize their menu items without having to spend a lot of time figuring out what the options are, and what the up charges will be is a great way to get repeat business. Below is a simple approach to sandwiches. One price, choose your bread and protein, choose as many condiments as you want. The same process has been effective with bowls and salads in the foodservice industry. Yes, some of the items will have a high food cost and some will be low, but the overall food cost will balance out and the consumers will be back.

3. Stick to the brand’s core. Don’t try to be everything to everybody. If you are known for having great burgers, it doesn’t mean that you can’t have a great chicken sandwich, but can you have great burritos, salads, pizza and more? The larger that your menu gets, the more likely you will fall short on guest expectations of many of those items. Every brand started with a particular menu item that was its signature. They then built on that item to create a category. From there it was about adding more and more items to compete with others and trying to satisfy an entire group of customers. There is no better time to innovate around these core items.

4. Make it easy for your team members to consistently execute. One thing that has changed in foodservice is the necessity to have a team that is trained to do more with less. The labor force may have increased, but simply adding bodies is not in the best interest of an operation. In order to consistently execute with a smaller team, employees must be cross-trained, and the menu items must be easy to produce. This starts with simplified prep and fewer steps in producing the actual items. Complexity leads to mistakes, and consumers do not have a great deal of patience for orders that do not meet their expectations.

5. Take emotion out of decision making. The success of foodservice is impacted by how decisions are made. Simplification becomes much easier when both customers and team members are engaged. Emotional decisions tend to be complicated and are made without a true understanding of what consumers are looking for and whether it is feasible for team members to consistently execute the item

Differentiating your brand can be done in very simple ways. Keeping the mindset that “different is better than better” sends a clear message that just because you think you are better, does not really mean that you are. The consumer is the one who makes that decision.

6. Focus on SKU rationalization and build multiple recipes from each SKU. The pandemic taught us to reduce the number of SKUs being purchased and to incorporate those ingredients in as many recipes as possible. Single use SKUS simply have no place in foodservice. They take up space and increase waste. Pizza is a great example of a product with limited SKUs and with the options of creating other recipes from the basics. Pizzas have now spun off into bowls, folded sandwiches, bread sticks, calzones and much more. Culinary innovation can be simple, but still extremely appealing to consumers.

Bruce Reinstein is a partner with Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm. The firm works with foodservice operators, suppliers and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. Contact him at [email protected]  or learn more at Kinetic12.com.

Source: CStore Decisions

Improving Supply Chain Practices

By: Emily Boes | August 11, 2023

C-store retailers are still navigating the supply chain post-pandemic, learning which strategies lead to success and focusing on struggling categories.

A few years ago, during the height of the COVID-19 pandemic, the supply chain proved a constant source of stress for convenience store retailers. With out-of-stocks aplenty and hardships maintaining inventory in a timely manner, c-store operators had to be creative with solutions.

“Overall, the pandemic brought about significant changes in the supply chain, prompting companies to rethink their strategies, embrace digital transformation and prioritize resilience and flexibility in their operations,” said Nick Triantafellou, director of marketing and merchandising, Weigel’s, which operates 74 c-stores in Tennessee.

Now, supply chain issues aren’t as prevalent, but they haven’t quite gone away.

“Supply chain for many items had been constricted (during the pandemic), with many items not available or only certain sizes or flavors available,” said Fred Faulkner, director of sales and marketing for Jaco Oil Co., which operates 55 Fastrip stores in California and Arizona. “The inventory levels started to improve in late 2022, and now in 2023 they are better; however, they are not 100%.”

Judy Wall, purchasing/product analyst and marketing for Corner Store, agreed that the supply chain could still use improvement, although it has been getting better with time.

Based in Seminole, Texas, Corner Store broke ground on its fourth location in June. Recently, the chain has noticed a change in product supply.

“Various items that were gone for months are back in production, and we’re able to make our customers happy by bringing them back,” said Wall.

For Weigel’s, the pandemic led to the chain adopting practices that it still maintains to allow for stronger business.

“It took great partnership, staying nimble as a company and communication skills to get through the pandemic. In the past year, we have come out stronger with our vendor partners due to what it took to get out of the pandemic,” said Triantafellou.

Supply Chain Struggles

At this time, Fastrip is still struggling with the supply chain for confectionary and grocery items such as pet food, dry goods and condiments.

Corner Store, on the other hand, is still experiencing issues with supply for bottled drink and mineral water products.

For Weigel’s, supply chain issues are occurring with primarily center store categories.

“It pops up randomly with things you wouldn’t expect like marshmallows. Or as products start to bounce back from their pandemic dip (i.e. gum) with significant growth over the last year, our top manufacturers can’t keep up and have caused huge holes in regrowing subcategories,” said Triantafellou. “We closely watch commodity reports to try to gain any insight we might be able to gain about future issues in our supply chain, like the cocoa shortage the world is entering.”

Weigel’s is currently preparing for potential shortages in products that rely on cocoa beans, readying helpful strategies.

Inventory Solutions

Convenience stores have experimented with different methods to find solutions for out-of-stocks.

Recently, Fastrip has explored alternative supply sources, either as secondary or primary sources depending on the category.

“And of course (we have been) staying on top of situations when needed or applicable to encourage prompt delivery or supply,” Faulkner continued.

When the situation is dire, Fastrip acquires inventory even if it means purchasing from a competitor such as Costco, Walmart or Sam’s Club.

“The bottom line is we try not to be out of stock at any time on anything,” said Faulkner. “We may also on occasion substitute sizing to accommodate our customers — 24 ounces vs. 16 ounces, etc.”

Faulkner said he believes the best way to manage the supply chain is to stay ahead of changes in the marketplace. He encouraged convenience store retailers to anticipate challenges and follow instincts. “You have to make decisions and then react quickly. Sometimes you win, sometimes not, but you have to react,” he said.

Triantafellou concurred that reacting and staying nimble are key to finding solutions for out-of-stocks.

For example, Rebecca Gregory, Weigel’s center store category manager, adjusts planograms (POGs) on the fly to fix holes by filling them with similar products that Weigel’s is able to source from its wholesaler. She also sends out new POGs and tags to all stores, weekly if necessary, Triantafellou said.

“She has stayed on top of her merchandising principles and makes sure stores always have a solution to issues we are seeing,” Triantafellou said. “Instead of throwing up her hands when an item all of a sudden hits a supply chain issue, she stays nimble and acts fast.”

Weigel’s deploys a seven-step process for top supply chain management.

With all vendor partners, Weigel’s enhances visibility, diversifies the supplier base, strengthens collaboration with suppliers, prioritizes inventory management, embraces technology and automation when possible, invests in omnichannel capabilities like Vroom and Uber Eats, and continuously assesses and improves.

“We are always looking at ways to collaborate and communicate with our vendors more while following our best practices,” said Triantafellou.

Corner Store’s Wall emphasized the importance of having backup vendors and establishing good relations with the companies and representatives they work with.

Additionally, Corner Store built more storage space to hold extra items. If a product is struggling to be stocked, the chain will order an additional case of that product when it places the order.

When it comes to out-of-stocks, “unfortunately there is no perfect solution,” Wall noted.

“Whenever we notice we’re struggling to receive a certain product, we reach out to our additional vendors to see if they are able to supply us with that item,” Wall said. “One of the downsides is that the secondary vendors are normally not able to match the cost price of the original vendor.”

This then results in either the company’s reduction in the gross profit margin or a new change in price for the consumer. Triantafellou also stressed that in the c-store industry there will never be a “perfect, no-issue” day.

Therefore, he continued, adaptability, resilience and leveraging technology effectively are the keys to best supply chain management post-pandemic.

“By implementing these best practices, you can enhance efficiency, mitigate risks and meet the evolving demands of the convenience store industry. It is the ability to react quickly and find solutions that will see your stores through any challenges they face,” said Triantafellou.

He noted that the best partnerships are built on growing the overall category’s business.

“Increase focus on building strong relationships with suppliers, logistics partners and customers to address challenges and find innovative solutions. Collaboration platforms, video conferencing tools and real-time data sharing become essential for effective supply chain management with your partners,” Triantafellou advised.

Source: CStore Decisions

Convenience Drives Contactless Payments in C-Stores

By: Zhane Isom | August 10, 2023

As the demand for contactless payment continues to grow, retailers are enhancing their systems while keeping an eye on data security.

When COVID-19 arrived in March 2020, retailers rushed to implement contactless payment options to keep shoppers and employees safe. Three years later, customer demand for contactless payment continues to increase given its speed and convenience.

To accommodate the increased use of contactless payments, retailers are enhancing or upgrading their systems while taking data security into consideration to keep customers’ information safe.

It is estimated that the global contactless payment market will be valued at $90.6 billion by 2032, up from $22.4 billion in 2022. It is expected to exhibit a compound annual growth rate of 15.4% during the forecast period 2023 to 2032, according to Market.US’s Global Contactless Payments Market Report.

Technological advances and retailer adoption are expected to help spur growth in the segment.

“Simplicity, which goes hand in hand with speed, is the most important feature for customers,” said Perry Kramer, managing partner for retail management consulting firm Retail Consulting Partners. “This is often best facilitated by allowing the customer to tap before the conclusion of entering the items, and by minimizing the excessive questions that many retailers clutter their payment terminal with at the time of checkout.”

At Pete’s Convenient Stores, which has 53 locations in Missouri, Kansas and Oklahoma, more customers are using its Express Lanes for self-checkout because they’re convenient and get them out the door faster. The Express Lanes accept cash, credit and EBT (electronic benefit transfer). The c-stores also feature scan-and-go, which customers can use to scan and pay for their purchases through their smartphones. Both offer a contactless solution in the sense that customers don’t have to interact with employees.

“We found that the customer likes to have both cash and credit options. They also want to have the capabilities to pay for fuel through the Express Lanes,” said Brenda Elsworth, chief operating officer for Pete’s Convenient Stores. “In some of our stores, a second and third Express Lane were installed as customers preferred the Express Lanes.”

Elsworth has also seen an upward trend in customers’ use of contactless payment and a downward trend in lines at the point of sale, which has caused the convenience store to enhance its contactless payment systems.

“We are banking our Express Lanes together at the main pay spots, and we are also running more promotions online to incentivize the customers to use our online payment system,” said Elsworth.

The New Normal

Now that contactless payment is offered in most convenience stores, customers are more frequently seeking it out over more traditional forms of payment at the register.

“We have reached a tipping point with customers that they now see some type of contactless payment as a default process,” said Kramer. “It could be a contactless credit card, QR code on a phone, Apple Pay or Samsung Pay. This has been driven by the expansion of contactless hardware and software into almost all retail locations.”

Nonetheless, Kramer noted that even though most stores have contactless payments, some retailers still have not fully adopted the technology. Some retailers have been slow to adopt the technology because they want to get every use out of their payment hardware and have little desire to deal with the challenges that new highly complex software brings, he suggested.

Considering Data Security

Since contactless payment has become customers’ go-to source of payment, retailers have to start considering improving their data security to keep customers’ information secure when using contactless payment.

“All of our credit information is run through our P66 processor, which allows our customers’ card information to stay safe and secure whenever they use one of our contactless payment systems,” said Elsworth.

Kramer suggested retailers should focus on using payment tokens whenever possible and invest in modern payment systems at every point in the payment ecosystem. He also noted that retailers should avoid building custom solutions and leverage mature products.

“Like most software and products, there is a need to maintain operational efficiencies to support the security process,” Kramer said. “This includes patching and maintaining upgrades for all software and hardware and showing endless due diligence.”

“Take data security seriously,” added Elsworth. “Have a security analyst run tests and ensure you are protected, as well as your customers.”

The Future of Contactless

Contactless payment is expected to continue to rise in popularity at c-stores as consumers continue to prioritize speed and convenience while in the store.

“We think contactless payments, whether through online, mobile devices or express lanes, will only grow,” said Elsworth.

Overall, convenience store retailers should continue to improve their contactless payment systems and data security to keep up with technology and customers’ needs.

“Contactless payments will continue to evolve in the quick-service restaurant and convenience store vertical faster than in other areas due to the ever-increasing need for speed and convenience in these verticals driven by labor shortages and the consumers’ need for a frictionless experience,” said Kramer. “Retailers will continue to try and use mobile applications, (QR codes and near field communication on phones) to link payment tokens with customer rewards, memberships and basic customer relationship management identification, merging tendering and customer capture into a seamless and rapid process.”

Source: CStore Decisions