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How c-store foodservice is transforming to compete with quick-serve restaurants

Published April 27, 2021

A customer comes into your convenience store after a long and tiring commute. He’s exhausted from a full day of work, hungry and looking for a quick bite. But when your double doors whoosh open, he’s greeted by the aroma of hot, fresh pizza, smoky barbecue sandwiches and spicy soup. Suddenly, any thought of a $3 bag of chips and a soda are out the window. Delighted, he orders a large pizza with double pepperoni and a family-sized salad—and it comes out fast and fresh. After breezing right through your self-service kiosk, he’s got a hot, prepared meal he can bring home to his family. And it was so easy, he’s not sure why he always defaults to the local fast food chain.

This scenario is now becoming the norm for convenience stores around the country. If you own a c-store, you’ve probably made dramatic shifts to adjust to changes brought on by the pandemic, including supply chain disruptions, fluctuating customer behaviors and demand for a more robust shopping options. You’re looking for new ways to differentiate your business, attract more customers and drive sales. C-store foodservice is fast becoming the solution.

From the perspective of a consumer, the appeal of quick-service restaurants, food delivery and carry-out meals is obvious. They’re not eating out in restaurants as much as pre-pandemic consumers, and they’re avoiding table-service restaurants and crowded spaces in favor of minimal contact and zero-preparation meals. As a result, food away from home has dwarfed at-home meals at a share of 54.8 percent, according to the USDA, placing a considerable burden on the fast food and quick-serve industries.

Perhaps unsurprisingly, fast-food restaurants have cornered this quick meal market, accounting for approximately 73.1 percent of all food-away-from-home sales in 2019. But c-stores, too, saw a 4.4 percent increase in food service sales over the course of 2019. In 2020, it accounted for 22.6 percent of sales at US c-stores and 36.4 percent of profits, excluding fuel, according to the NACS state of the industry report. 

An increase in food service presents a lucrative opportunity for c-store brands, but it might take some thoughtful adjusting to take advantage of it. So how can you and your c-store benefit from the food service trend while emphasizing your unique value to customers?

There are several examples of how foodservice is transforming within the c-store to compete with quick-serve restaurants. As a convenience store operator, you’ll have to consider if your market wants fresh food options, more robust customer service or variety—and how to provide those services at a reasonable cost. The good news is that you’re well positioned to grab a greater share of the foodservice industry, while continuing to provide a breadth of services not found at any other retailer.

Related: Third-party delivery integration in the c-store: How to make the process simpler

Customer service and engagement

Think of your last great customer service experience. The employees likely treated you with respect, made an effort to understand your needs and provided their services quickly and efficiently. It’s possible that the customer experience made more of an impact on you than the product or service itself, and helped you remember to do business with that company again. This is the kind of service that you want to provide to your customers, especially if you’re introducing a more comprehensive food service program in your c-store. 

Related: 85% of shoppers say they like the idea of ordering foodservice at the pump. Download our ebook for more forecourt insights & strategies.

Despite customer demand for quick, on-demand meals, good service is one of the most important factors for customer retention. Despite customer demand for quick, on-demand meals, good service is one of the most important factors for customer retention. In fact, as a convenience stores, your positive relationships with customers are one of your most important assets.

Fast-food restaurants have a solid edge when it comes to serving meals to customers on tight schedules. Quick service restaurants are designed with this specifically in mind, which makes for fierce competition in the foodservice industry, especially during a worldwide pandemic. But that doesn’t mean that your c-store isn’t in the running.

Think of it this way: as people move through the fast-food line, there isn’t much time to develop personal connections between employees and customers. In c-stores, however, customer service can be the difference between a drive-thru stop and a quick visit to a local store. Using your service strengths—such as the friendly, neighborhood greeting when a customer enters, a secure and speedy checkout process and a bright, clean shopping environment—can make an impression on your regulars and recruit new ones.

Simple touches, such as training your employees on more personal customer service interactions, can also show your value as a local brand that appreciates your patrons. For a customer, being treated with respect can be more of a draw than cheap prices, so the next time someone enters your store, make an attempt at a personal connection. Even the small gestures, such as remembering a customer’s name or regular foodservice order, can make all the difference.

If you’re considering bulking up food service in your c-store, think of ways to further improve your customer service. This may involve updated cleaning and disinfecting standards, employee training or addressing past customer complaints. All of these low-cost options can help a customer distinguish you from other foodservice sellers and keep them coming back for more.

Curbside and contactless foodservice fulfillment

You’ve more than likely used a curbside or contact-free service at least once in the past year. According to CNBC, curbside pickup alone has surged 208 percent, an astonishing change in customer behavior in mere months. Customers now expect retailers to be aligned with the trends, which stress the need for service that’s sanitary, quick and contact-free. Curbside and contact-free food service is not only convenient, but it reduces in-store foot traffic and allows for minimal handling of customer goods.

And c-store retailers are responding. According to a Statista survey published in June 2020, 15 percent of c-stores have started offering curbside pickup and 12 percent implemented delivery services during the pandemic. For many of these stores, the pandemic offered an unplanned opportunity to beta-test these services for potentially permanent implementation.

15% of c-stores have started offering curbside pickup, and 12% have implemented delivery services during the pandemic.

Before the pandemic, it was common for customers to take their time and browse c-stores aisles for snacks and quick meals. You could easily pick up essentials like milk and eggs—while looking for hair care products and over-the-counter medicine for the family. Now, the importance of access to essentials via contactless service is greater than ever.

So how might you get started with contact-free services? Well, there are plenty of models for service that keeps your customers and employees safe. This can mean offering an app for customers to easily order and pick up their groceries at their leisure. Pre-ordering groceries can also cut down on the waiting time typical of full-service restaurants, while offering a more diverse set of perishable and non-perishable goods that quick-serve restaurants cannot offer.

Customers can further limit their in-person shopping through self-service kiosks, whether in store or at the gas pump. Many convenience stores already have self-checkout options, allowing customers to begin and complete their transaction with little to no employee interaction. By maintaining or increasing your amount of self-service POS systems, your c-store could increase the amount of customers looking for quick and reliable service.

And with the latest outdoor fuel pump terminal technology, customers can even order foodservice and other store items right at the pump. These technologies can integrate with your mobile app, so customers can do everything from unlocking the pump, ordering foodservice and paying for their order and their fuel, all with their phone. Or they can tap a loyalty promotion for, say, a free cup of coffee with a breakfast purchase—right on the pump display screen.

Keep reading: See how one c-store brand with 70+ locations is enabling customers to order and pay for made-to-order pizza more—right at the pump.

When looking at options for no-contact and curbside service for your c-store, it’ll be necessary to weigh the costs of operating self-service stations against the benefits of customer satisfaction and retention. It may not always be financially viable to set up mobile app services, or indoor self-service kiosks. But you still have options for contact-free service. Consider allowing customers to call in their orders, for example, or use your c-store website to offer contact-free pickup purchases.

Being aware of food service trends

If you’re a fast-food buff, you’re probably up to date on all the latest deals at your favorite quick serve restaurants. Your customers are paying attention, too, and they could be looking to you for their next quick meal. Promotions in particular can be a great way to get more people in the door, and keep them coming back for both the great meals and the great savings.

A good example of this is quick-service restaurant chain KFC. In their well-known promotion, you can feed a family of four on $20. You just go to the drive-thru, quickly make an order and drive off with a meal. Although this promotion has been around for a while, KFC recently rolled out a curbside option, which makes it even easier for customers to pre-order and pick up their meals with little to no contact with employees.

For your c-store, it may be easier than you think to replicate this model. For families, preparing meals is time-consuming and expensive. More individuals are willing to find other options to avoid these inconveniences, and c-stores may be able to provide the solution that these customers are looking for. In your c-store, consider the promotions that quick serve restaurants use to attract customers. This can mean large, pre-packaged hot foods such as rotisserie chicken and hot dogs, as well as pre-mixed salads and microwaveable meals. You can also offer frozen meals that can be stored and heated later, an option that’s especially attractive for workers with long commutes or families with varying work and school schedules.

But it doesn’t stop here—this concept can apply to local grocery stores and gas stations as well. Promotions and service offerings, such as c-store loyalty cards, coupons, rewards programs—as well as foodservice specific deals such as family-sized meals and build-your-own deli sandwiches—can be reproduced at your own c-store.

Related: Lagging convenience store sales? Here’s how upgraded loyalty program can help—plus tips for building a successful c-store loyalty program.

Of course, this doesn’t necessarily mean following every foodservice trend. Using retail analytics to understand your customers and their preferences is a smart, data-driven way to forecast demand and sales. Also, it may be helpful to directly ask customers what they’re looking for in a quick serve environment. Through conversation or customer surveys, you can adjust your services to fit the needs of your local neighborhood.

As a c-store operator, it’s important to think critically about which foodservice trends apply to your store, and which ones may not fit your customer base. This will allow you to differentiate between which tactics will work best for your customers, and help you tailor your services as such.

Healthy foodservice options

We know that the food service industry is seeing a surge like never before. But we also know restaurants are taking a considerable portion of those profits. So, what will it take for c-stores to compete with quick-serve restaurants? It could come down to the type of food you offer.

As the pandemic grinds along, consumer habits have seen a reliable trend toward health and wellness. Customers are increasingly concerned about their mental and physical health—with products like vitamins and plant-based nutrition seeing major uptake. Healthy food options are a natural extension of these trends, and convenience stores are in a unique position to take advantage of them.

Convenience stores are known for stocking snack food, and they’re rarely associated with fine dining or healthy eating. But c-store have access to food options that quick serve restaurants may lack the time and availability to reasonably stock and serve to their customers. As the global health and wellness food industry steadily grows, customers are looking for fresher, low-fat and low-sugar meals at prices that are suitable for families.

Healthy foodservice options such as salads, fresh fruit and vegetables, chilled breakfast and lunch items, and bottled coffees, teas, and waters are products that c-stores can easily store and sell. In addition to stocking full, balanced meals, c-stores have the advantage of providing other household and personal care items that can consolidate shopping trips for health-conscious shoppers.

Another way to emphasize healthy eating at your c-store is to provide options for restricted diets, such as vegetarians, vegans, diabetics and those following popular dietary regimens such as paleo and Atkins. Delicious and low-cost vegan options, such as meatless breakfast sandwiches or microwaveable burritos, can set your c-store apart as being health conscious and aware of the times. Similar options can be added for those looking for low fat, low sugar, or low salt foods that can be easily grabbed or prepared.

As a c-store owner, you’ll have to determine which healthy food options make the most sense for your store and your customers. This can involve local market research, as well as staying updated on the current demand for healthy quick meals. There is no one-size-fits-all option for any convenience store, and you’ll have to use your discretion to determine which healthy food choices are best for your c-store.

More and better foodservice options

As a c-store, you can expand your menu to meet consumer demand, offering potentially hundreds of more choices on beverages, food and non-food items at prices that rival the average fast food restaurant. In contrast with quick service restaurants, convenience stores can house a bakery, hot meal kiosks, bottled alcoholic and non-alcoholic beverages, hot coffee, fresh fruits and veggies and a gas station under one roof. By providing all of these services in one, you allow customers to limit the amount of stops they make before heading to work, school or home.

When considering the types of food and drink options that you can stock at your location, it will be important to know how many perishable items you can store and for how long. Fresh food items that can only be stored for short periods of time, such a protein and cheese packs, dairy products, sandwiches and wraps may be more lucrative than dried, canned or other nonperishable foods.

To reduce food waste and contamination, it’ll be crucial to keep track of how customer demand interacts with the shelf life of your goods. It’ll also be important to determine how long certain food items will remain fresh, as well as looking visually attractive to customers. Pay attention to the current food items that sell the quickest and at the greatest volume in your c-store. Then think of ways to provide more variations of those items, in either frozen or fresh states, to draw in your current customers and invite new ones.

Fuel a more profitable future with foodservice

Despite shifting trends, convenience stores remain a popular choice for local customers looking for a one stop shop. By modeling the most successful aspects of grocery stores, fast food restaurants and gas stations, you can offer a safe and cost-effective alternative to these services for your local customers.

It may not be entirely straightforward to adjust to such rapid changes, and cost considerations are still a significant hurdle for local convenient stores. Still, even slight low-cost changes to your foodservice offerings can make your c-store more competitive, more relevant and a better choice for your customers.

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