Technomic Report: C-Store Foodservice Expanding and Prospering

Convenience-store foodservice is a $10.9 billion industry and a key area of opportunity for c-store operators across the country as they increasingly concentrate on providing a greater variety of fresh, high-quality foods. Outside competition is also mounting as c-stores strive to compete with fast-food restaurants.

How c-stores fit into the overall foodservice picture is the subject of a new Convenience Store Market Intelligence Report from the Technomic, Inc., research organization. Among the key findings…

Fully 57% of consumers say they have purchased prepared foods from c-stores and roughly a third who visit c-stores for fresh-food items purchase them at least once a week from these operators. Also, more c-stores are leveraging branded restaurants at their locations. While Subway and McDonald's have locations built into some stores, capitalizing on convenience and foot traffic, more progressive c-store chains are developing and integrating their own branded restaurants into existing stores, transforming the perception of purchasing prepared food at a convenience store.

"Prepared food is a growth opportunity for convenience stores willing to raise the bar on quality and key attributes sought by today's consumers," says Technomic Senior Director Donna Hood Crecca. "Consumers say they would visit convenience stores more often for prepared foods if those foodservice areas were improved upon. Customizing their offerings and a more appealing décor and atmosphere could enhance the experience."

Other consumer insights found in the report include:

• Three-fourths of consumers (76%) who purchase prepared foods from convenience stores report that these locations provide a convenient option;
• Two-fifths of consumers say they would visit convenience stores for prepared foods more often if freshness and quality were improved;
• Convenience stores top other types of retail locations for breakfast patronage, and convenience stores are the only segment to see a significant increase in breakfast patronage over the past few years. This is likely driven by coffee purchases;
• Entrées account for more than half of c-store menu items, with their share of the menu expanding significantly to 51% in the second quarter of 2013 from 47% a year earlier. Sandwich remains the top breakfast entrée.