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

Should I Stock Candy Snack Mixes?

By Howard Riell | July 7, 2023

Candy and snack combinations fulfill c-store customers’ salty and sweet cravings.

If American consumers like Product A, and they like Product B, it just stands to reason that they will absolutely love Product A+B. This is why convenience store retailers should be sure to stock candy snack mixes.

Think hybrid cars. Or chocolate and peanut butter: two great tastes in one candy bar.

The appeal of dual tastes is the reasoning behind the rise of candy snack mixes, an example of channel blurring between both popular product categories — and of an idea whose time has clearly come.

The proof that the reasoning is sound lies in the fact that several of the largest, smartest and most successful candy companies in the U.S. have decided to roll out candy and snack mix combos, and sales thus far have been brisk. Among the recently released hybrid products are snack mixes that include chocolate-covered pretzels or chocolate and popcorn.

Another candy giant is combining chocolate and peanut butter with nuts and pretzels.

The sweet taste meets the intersection of candy and snacks, and it continues to rise in popularity. Chicago-based market research firm Circana, formerly IRI, reported that sweet snacks such as snack bars, granola bars and clusters rolled in at $819 million in 2022, a powerful 9.5% gain.

These types of snack and candy medleys are a trend, and a growing one, and the reason is self evident. These items play on customers’ love of salty and sweet combos, giving them candy and a snack in the same item.

Indeed, mixing and matching of familiar flavors has itself become an innovative strategy among candy makers, rendering the old new once more.

This was clearly in evidence at the National Confectioners Association’s Sweets & Snacks Expo in June at the Indiana Convention Center in Indianapolis.

It is axiomatic that while consumers always have their favorite brands and long-cherished varieties of candies and snacks, they also enjoy mixing things up a bit with new products and/or interesting and unique flavors and flavor combinations. That alone should signal a green light to convenience store operators to fully embrace this trend which, after all, only gives consumers more of what they already love.

Source: CStore Decisions

C-Stores Elevate Chicken, Pizza, Roller Grill Menus

By: Marilyn Odesser-Torpey | June 2, 2023

As a growing number of consumers are looking to convenience stores for meals and snacks, retailers are going all out to meet their demands by offering a variety of their favorite foods fast, fresh and at value prices.

Chicken, pizza and roller grill items have been convenience store mainstays for years, but there is always room for innovation and experimentation among these core convenience store offerings. C-store retailers are finding new ways to elevate these foodservice staples as they look to attract new customers.

Kwik Trip and Kwik Star stores in Minnesota, Wisconsin and Iowa sell “a ton” of chicken, according to Paul Servais, the director of research and development for Kwik Trip and Kwik Star, which operate a combined 800 locations.

“Right now, chicken accounts for a little more than a third of our total hot food sales,” Servais explained. “And it’s rapidly becoming a bigger piece of that category’s sales.”

Sold under the company’s Kitchen Kravings proprietary foodservice brand, the chicken is hand breaded and fried fresh in the stores. At Kwik Trip and Kwik Star there is a chicken package to suit every preference and appetite, from the best-selling three jumbo tenders and crispy chicken sandwich to two-, four- and eight-piece bone-in pieces and whole oven-roasted birds.

Servais pointed out that the company introduced the whole roasted chickens to help drive home the notion of Kwik Trip and Kwik Star as top-of-mind dinner destinations. To promote the roasted chickens, the stores feature them at a value price of $5.99 every Monday.

Surprisingly, while the fresh-fried chicken has experienced what Servais described as “incredibly rapid growth,” it has not at all cannibalized the stores’ pizza or burger sales.

“Our sales of those two items have grown as well,” he said. “We believe that the freshness of our chicken legitimizes all the other items in our foodservice program.”

The stores first launched the chicken program in 2019 and had fully deployed it chainwide in 2020. It will also be a featured attraction at several new stores the company plans to open in Illinois, Michigan and South Dakota this year, Servais added.

Pizza Remains Profitable

Pizza is a powerhouse, accounting for 20% of foodservice sales at Fleetway Market, which has a total of 23 stores in central and southern Mississippi, stated Casey Comfort, foodservice and beverage director at Fleetway Market’s parent company Fleet Morris Petroleum. On average pizza sales at Fleetway have increased over 10% year over year for the past two years, he noted.

Fifteen of the stores feature a Hunt Brothers Pizza program. The other eight are located in non-compete areas where Hunt Brothers already operates. New stores in areas where Hunt Brothers does not already have a presence will also include the program, Comfort added.

Not surprisingly, lunch and dinner are the most active dayparts for pizza sales. But, Comfort noted, morning is also a dynamic daypart at many of the stores, not only for the eggs-bacon-sausage-cheese breakfast pie, but for dependable pepperoni and sausage pizzas as well.

Companywide, Fleetway sells more hunks — one-quarter of a 12-inch pizza — than whole pies. But some of the stores in rural areas without competitive pizza shops can sell more than 100 whole pies a week, he pointed out.

The stores promote their pizza offering with collateral materials such as limited-time offers (LTOs) every quarter and window and in-store signage provided by Hunt Brothers. Fleetway’s stores also include pizza on its rewards app and social media posts. Further, the chain is getting into bundling, such as Red Bull and a breakfast hunk or whole pizza and two-liter Coke combos.

Roller Grill Opportunities

For years, Dandy Mini Mart has limited its roller grill offerings to hot dogs and sausages. And for some of its 65 stores in New York and Pennsylvania, that has been enough to earn the grill its place on the countertop in its foodservice area, said James Fry, the company’s foodservice director.

“Some of our stores are destinations for workers who are in a real hurry and only want to grab a quick hot dog,” he explained. “In other stores our sales are flat, and that has made us debate whether to get rid of the grill and cook our hot dogs in our speed oven.”

Before making that decision, Dandy management is looking to the plethora of other items available for roller grill such as specialty hot dogs, tornados, taquitos and roller bites.

“The opportunities are out there, and we need to explore them,” Fry noted. “But we know that we are going to have to either go in whole hog or get out of the roller grill business altogether.”

In July, Dandy will be featuring four kinds of specialty hot dogs on its roller grills to begin to explore the possibilities of the category, he stated. The test will span a two-month period.

Source: CStore Decisions

Candy, Gum & Mint Sales See Upward Momentum

By: Zhane Isom | May 18, 2023

Candy segments at convenience stores are experiencing double-digit increases, with larger sizes rising in popularity.

While chocolate dollar sales grew 14% for the four weeks ending Jan. 28, 2023, according to NielsenIQ, consumers have been especially gravitating toward non-chocolate confections, including gum, mints and gummy candy.

Confection dollar sales were up 21.4%, while gum sales increased 37% and mint sales ticked up nearly 25% for the same four-week period, per NielsenIQ.

S&S Petroleum Inc., which operates 80 locations throughout Washington, Idaho, Oregon and California, is one c-store seeing a tremendous increase in candy sales so far this year.

“We are seeing an increase in the candy category as a whole because more and more consumers are out traveling and stopping for candy and snacks,” said Mike Jones, category manager for S&S Petroleum Inc. “Also, candy sales are increasing because consumers can buy their favorite candy and still be in their budget range. So in consumers’ minds, they can splurge on candy and still be in the $3, $4 and $5 range which is critical, especially with inflation.”

The Rutter’s Cos., which operates 83 locations in Pennsylvania, West Virginia and Maryland, is another c-store chain seeing a rise in candy sales.

“The candy category is off to a hot start so far in 2023, seeing increases in both dollar and unit sales,” said Joseph Bortner, senior category manager for The Rutter’s Cos. “I’d anticipate units to see some softness in the second half vs. the first half of this year after another round of pricing from suppliers, but overall, it should be a strong year for confection.”

Big Candy Bags Are Back

Despite inflation, customers are increasingly selecting larger bags of candy that offer greater variety. Jones has also noticed customers gravitating toward big bottles of mints and larger packs of gum.

“As far as anything else, bag candy is on fire,” he said. “It really has to do with the different flavor innovations out now, including anything sour. I also think the reason consumers are going for larger bag sizes is because the price has decreased, allowing them to get more bang for their buck.”

But even with candy sales on the rise, c-store retailers must work to ensure they’re keeping candy customers engaged with the offering.

“The biggest hurdle for retailers will be how we can create value for our customers,” said Bortner. “With inflationary pressure all around, we need to ensure we’re creating offers that resonate deeply with our consumer base. As suggested retail prices rise, this will continue to be our biggest challenge to find what works best in the days ahead.”

S&S Petroleum and Rutter’s are continuing to enhance their candy categories by stocking new products and adding promotions to keep customers intrigued by their candy offerings.

“We are looking at different ways to promote our candy offerings,” said Jones. “So we are trying to do things like buy one get one for a dollar or some variation of that. We are also looking at opportunities to bundle our candy offerings with other categories, whether it’s with coffee or fountain drinks.”

What’s more, Rutter’s has even started incorporating candy into a few of its proprietary foodservice offerings.

“A staple of our foodservice option is to find new and unique ways to capitalize on the brands our market loves,” said Bortner. “Through the years, we’ve done this by incorporating our favorite confection items into shakes prepared in the kitchen. Thus far in 2023, we’ve taken it even further by creating a sweet and savory peanut butter burger.”

All-in-all, retailers are bullish on the candy category for the year ahead.

“We expect to see significant growth in the candy category as consumption continues to outpace per year, even with higher price points,” said Bortner. “If that pace continues through the rest of the year, we’ll see a record year in confection.”

Source: CStore Decisions