The Future of Convenience Stores: Food Destination

Angela Hanson0
CSNews

CHICAGO — The restaurant industry ranges from ultra casual fast-food joints to premium fine dining, and more than ever, convenience stores are earning a seat at the table. This is apparent at the 2013 National Restaurant Association (NRA) Show, which began Saturday and runs through tomorrow, May 21, at Chicago’s McCormick Place.

In the first of two convenience store-specific panels that are part of the show’s educational track, Convenience Store News Editor-in-Chief Don Longo teamed up with Sheetz Inc. Executive Vice President and soon-to-be CEO Joe Sheetz to discuss the future of convenience stores as it relates to fresh, prepared food. Foodservice is more important than ever and has remained the most profitable category at c-stores for the past five years, according to CSNews research.

Longo presented select insights from CSNews’ 2013 Realities of the Aisle consumer study, showing that sandwiches, hot dogs and pizza are among the most popular prepared food items at c-stores, yet offering healthier options appears to be paying off with increased sales. Other opportunities for growth in prepared food can be found through connecting with the right shoppers, optimizing promotions to drive trips, and reaching consumers in flexible ways.

Of the total foodservice category, “prepared food is the shining star” at convenience stores, Longo said.

Sheetz concluded the presentation with a retrospective on the beginnings of Sheetz Inc. as a business and its evolution into an extremely foodservice-focused chain that considers itself a “convenience restaurant” chain. “Everything we do is through restaurant glasses,” he commented.

The family-owned, Altoona, Pa.-based retailer has found success through its Made To Order (MTO) program, which offers customized menu items through touchscreen ordering, as well as its subsequent Made To Go premade food program. Its loyalty program has also done well.

The company keeps a close eye on the future, reinventing itself and always striving to become the Sheetz that will put the Sheetz of today out of business.

The notion of c-stores being competition in the foodservice market was expanded upon during a panel entitled, “The Convenience Store Competition: What You Can Learn From C-store Foodservice?”, presented by Nancy Caldarola, education director for NACS, the Association for Convenience & Fuel Retailing; Bill Reilly, senior vice president of marketing, GPM Investments LLC, owner of Fasmart/Shore Stop Convenience Stores; and Joseph Bona, president, branded environments, CBX.

While convenience stores are facing a number of new challenges as the foodservice category grows, such as handling space and new equipment requirements, rising food costs and needing additional skilled labor beyond their comfort zone, c-stores are also seeing some exciting positive changes, including expanded menus and product offerings, technology to enhance the order process and expanded fresh and healthy offerings, according to the panelists.

To create a positive impression and combat the fact that gas pumps often turn customers off of c-stores as a foodservice destination, they said operators must use the retail environment to set the stage for the promise of freshness and use the layout to create a strong first impression. Bundled offerings and establishing a sense of place through localized products can also be effective. Most importantly, c-store operators must remember to refine, refresh and revitalize — and don’t stop.