In 2025, Why Do Some C-Stores Struggle with Foodservice?

 

The convenience store (C-store) industry has evolved far beyond gas pumps and candy bars. In 2025, foodservice is not just an option — it's a growth engine. Yet, despite its potential, many C-stores still struggle to get foodservice right. Why, lets see what Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® thinks.

The answer lies in a mix of operational complexity, shifting consumer expectations, and fierce competition — even as the data points to strong opportunities.

Foodservice: A Key Profit Driver That’s Hard to Master

According to the 2025 Convenience Store News (CSNews) Foodservice Report, prepared food remains the undisputed cornerstone of C-store foodservice programs. A whopping 92% of retailers surveyed offer prepared food, and it accounts for an average of 48% of total foodservice sales.

However, simply offering food isn't enough. Many stores fail to deliver consistency, quality, or variety at a level that meets customer expectations. Inconsistent execution, undertrained staff, and lackluster product offerings can all turn a high-potential category into a weak link.

Beverage Breakdown: Who’s Winning?

Dispensed beverages also play a vital role in C-store foodservice. According to CSNews:

·       Hot dispensed beverages (like coffee) and cold dispensed beverages (like fountain sodas) each account for 24% of total foodservice sales.

·       Frozen dispensed beverages, such as slushies, make up 16% of foodservice sales, with popularity surging among large operators. In fact, 97% of larger chains now offer frozen beverages, up from 77% the previous year.

This data reflects how larger, better-capitalized operators continue to adapt and invest in high-margin offerings — while smaller or independent C-stores often struggle to keep up with innovation or customer experience enhancements.

Five Insights from the Grocerant Guru®: Handheld Foods & Mix-and-Match Meals

1. Handhelds Fuel ‘Immediate Consumption’ Cravings

Consumers on the go want Ready-2-Eat options that require no utensils and no wait. Handheld foods — like breakfast burritos, empanadas, chicken tenders, and pizza slices — meet the needs of time-starved consumers. They’re convenient, portion-controlled, and often impulse purchases that boost check averages.

2. Handhelds Bridge Dayparts for Incremental Sales

Items that can be enjoyed anytime, like sausage rolls or soft tacos, are ideal for C-stores. The Grocerant Guru notes that “handhelds are the only food format that fluidly crosses dayparts — from morning coffee runs to late-night snack trips.” That versatility makes them a must-have.

3. Mix-and-Match Bundling Drives Customization and Loyalty

Consumers want personalized meals, not one-size-fits-all combos. Offering mix-and-match components — like a protein (hot wings or BBQ pork), a side (mac and cheese or salad), and a beverage — empowers customers to build meals to their taste, dietary preferences, and budget.

4. Bundling Increases Dwell Time and Basket Size

Well-merchandised component-based meals draw customers in and encourage exploration. A shopper who came for coffee may grab a hot sandwich and chips if offered a smartly priced combo deal. As the Grocerant Guru says, “Bundling is a silent upsell — when done right, it speaks louder than signage.”

5. Handhelds + Bundles Extend the Brand to Home and Office

Smart C-stores are selling more than snacks — they’re selling dinner solutions. Mix-and-match meal bundles let customers grab a meal now and take another home, extending the brand experience beyond the store. It’s food that fits real-life rhythms, and it’s where real margin lies.

 

Why Are Some Stores Still Falling Short?

Here are the top reasons some C-stores continue to struggle with foodservice despite its profit potential:

1. Operational Challenges

Running a foodservice operation requires skills outside the traditional C-store model. From inventory management to food safety compliance and employee training, it's a full-service restaurant compressed into a convenience format.

2. Failure to Differentiate

Consumers today expect more than basic offerings. Successful C-stores offer unique items, regional flavors, fresh options, and even healthier alternatives. Chains like Wawa, Sheetz, and QuikTrip have invested heavily in signature food items that build customer loyalty — while struggling stores often rely on generic, uninspired menus.

3. Poor Marketing and Merchandising

Even the best product won’t sell if customers don’t know about it. Many stores fail to effectively market their food offerings, both in-store and digitally. Eye-catching signage, strategic promotions, and mobile ordering platforms can dramatically improve sales — but require upfront investment and a solid marketing plan.

4. Inconsistent Customer Experience

The most successful operators have nailed down consistency: the food is hot, fresh, and prepared the same way every time. Struggling stores often suffer from high employee turnover and a lack of standardized procedures, leading to customer disappointment.

 

Industry Outlook: Room to Grow — Carefully

Despite these challenges, foodservice remains one of the most profitable and fast-growing segments of the convenience industry. But the margin for error is shrinking. In 2025, success in foodservice requires more than just putting a microwave next to a roller grill.

Retailers must think like restaurateurs, act like marketers, and operate with the efficiency of fast-casual chains. For smaller operators, that might mean narrowing focus, perfecting fewer offerings, and leveraging third-party partners for logistics and menu design.

As CSNews data and the Grocerant Guru’s insights suggest, the potential is there — but execution is everything.

Gain a Competitive Edge with a Grocerant ScoreCard

Unlock new opportunities with a Grocerant ScoreCard, designed to optimize product positioning, placement, and consumer engagement.

Since 1991, Foodservice Solutions® has been the global leader in the Grocerant niche—helping brands identify high-growth strategies that resonate with modern consumers.

📞 Call 253-759-7869 or 📩 Email Steve@FoodserviceSolutions.us