Thursday, November 7, 2024

Amazon’s Patience with Grocery Sales Growth Shows How Early Missteps are Hard to Overcome and Why a Grocery Spin Off Might be Coming

 


Amazon's attempt to break into the grocery sector, the company’s prolonged experimentation with various grocery models reveals a hard truth: early missteps in a highly competitive industry can be challenging to overcome, even for a corporate giant according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Today, Amazon’s food sector remains heavily reliant on cash from Amazon Web Services (AWS) to stay afloat, with its food sales focus constantly refined yet seemingly no closer to profitability. The food sector, requiring continuous cash infusions to test new models, has not provided the steady growth Amazon initially envisioned. As the pressure mounts to show consistent profitability across sectors, Amazon may need to consider spinning off its grocery ventures, particularly if they continue to strain overall profit margins.


Early Missteps and Prolonged Experimentation

Amazon’s grocery foray began over a decade ago, initially through AmazonFresh, which aimed to disrupt traditional grocery models with the convenience of doorstep delivery. However, scaling the grocery business presented more challenges than anticipated. Unlike its more successful retail segments, groceries are perishable, require complex logistics, and are extremely price-sensitive. These factors have historically hampered Amazon’s grocery growth, despite continuous adjustments. For instance, Amazon Fresh expanded slowly in the early 2010s, reaching just a handful of cities before losing momentum, underscoring the difficulties of scaling such a model profitably.

The acquisition of Whole Foods in 2017 marked a significant pivot, aimed at enhancing Amazon’s physical presence and adding a premium brand to its portfolio. But even Whole Foods hasn’t met expectations. Whole Foods’ high price points and limited store network have clashed with Amazon’s broader ambitions to serve all consumers, regardless of income. And while Whole Foods did bring Amazon into physical retail, it hasn’t translated into the grocery sales growth Amazon hoped for, highlighting the challenges of aligning a premium brand with mass-market ambitions.


AWS Funding Sustains Experimentation

Amazon’s grocery operations have largely been able to endure thanks to AWS, Amazon’s powerhouse cloud computing division, which has funded numerous ventures and experiments within the grocery sector. AWS accounts for the majority of Amazon’s operating profit, effectively subsidizing losses in the grocery division. Over time, AWS has grown faster and more profitable than any other division, fueling Amazon’s core e-commerce business and its grocery experiments alike.

This reliance on AWS cash flow, however, is a growing liability. As competitors strengthen their own cloud divisions and investor pressure mounts for diversified profit streams, Amazon’s grocery division looks increasingly vulnerable. Unlike AWS or Prime, which have both sustained high margins, grocery sales continue to deliver low margins due to intense competition, high operational costs, and low consumer loyalty. Today, Amazon’s grocery division is one of the few that has yet to prove it can be self-sustaining without AWS cash infusions.


Struggles to Define Its Grocery Focus

Despite these ongoing challenges, Amazon has demonstrated a strong commitment to refining its grocery strategies. This year, Amazon has introduced new Amazon Fresh stores, which have met mixed consumer reactions. The stores’ focus on cashier-less technology and streamlined shopping experience align with Amazon’s strengths, but they’ve been slow to gain traction in a market dominated by established giants like Walmart and Kroger. Furthermore, Amazon’s “Just Walk Out” technology, while innovative, has yet to make a notable impact on grocery profitability and consumer retention.

Additionally, Amazon is exploring a broader range of grocery delivery and subscription models, such as Prime Pantry, and continues to invest in fresh distribution centers. However, these models often overlap or compete with each other, diluting Amazon’s grocery brand and confusing consumers. This confusion has hindered consumer loyalty in an industry where loyalty and frequency are paramount. As Amazon continues to test and refine its grocery focus, it has yet to reach a model that resonates broadly enough with consumers to become profitable at scale.


The Cost of Grocery on Profit Margins

As Amazon faces increased pressure to achieve sustainable growth, its grocery division remains a low-margin sector that dampens the profitability of its overall retail business. Historically, the grocery industry operates with thin profit margins, typically in the range of 1-3%, with companies relying on high volume to drive profits. However, Amazon’s high-tech approach has raised costs in an industry that relies heavily on efficiency and low operational expenses. Additionally, consumer preferences in grocery shopping remain resistant to dramatic changes, with many consumers sticking to established brands and brick-and-mortar stores over Amazon’s various offerings.

In contrast, Amazon’s high-margin divisions like AWS and advertising continue to perform well, and both require less operational complexity and risk compared to groceries. Investors increasingly question whether groceries align with Amazon’s broader profit structure and are beginning to view the division as a drain on resources that could be deployed elsewhere. In a high-growth industry, there is growing concern that Amazon’s grocery sector may ultimately require a spin-off to free Amazon from the burden of sustaining a low-margin, high-complexity business.


The Case for Spinning Off Grocery

Given the continued reliance on AWS and advertising revenues to bolster Amazon’s bottom line, spinning off the grocery sector could be a pragmatic move for Amazon’s future. This strategy would allow Amazon to concentrate on its profitable divisions while giving the grocery segment the independence to innovate without the pressure of sustaining Amazon’s profit margins. In a historical context, companies such as McDonald’s have spun off real estate holdings to drive shareholder value, while corporations like eBay divested PayPal to let both businesses focus on growth. A similar approach could give Amazon’s grocery division the freedom to carve out its own niche while preserving AWS’s and retail’s profitability.

Think about this, while Amazon’s patience in refining its grocery strategy is commendable, its early missteps underscore the difficulty of breaking into a complex, low-margin industry. AWS’s ongoing financial support has allowed Amazon’s grocery sector to persist, but the sector remains an operational drain that limits Amazon’s potential. If Amazon hopes to satisfy growing investor demand for profitable growth, the grocery sector may be the first to go—allowing Amazon to return to its core strengths while freeing its grocery division to find its own path in a challenging market.

Who Might Want to Buy Amazon’s Grocery Business – And Why

Foodservice Solutions® Grocerant Guru® believes  that Amazon's grocery business, encompassing Amazon Fresh, Whole Foods, and other grocery-related ventures, represents an extensive infrastructure of physical stores, proprietary technology, and customer data. Despite Amazon’s extensive investment, the grocery division has struggled to achieve profitability, highlighting challenges in scaling a low-margin, high-complexity business. If Amazon were to divest its grocery sector, it would likely attract significant interest from companies or investment groups poised to leverage its established assets. Here are three potential buyers who may be well-positioned to acquire Amazon’s grocery business, along with insights into why they might take an interest.



1. Walmart: A Strategic Opportunity for Domination

Why Walmart Might Buy Amazon’s Grocery Division

As the largest grocery retailer in the U.S., Walmart has an inherent advantage in grocery, where it already holds around a 25% market share. Acquiring Amazon’s grocery assets could provide Walmart with a robust opportunity to reinforce its dominance and eliminate one of its biggest retail challengers. By acquiring Whole Foods, Walmart could broaden its presence in the premium grocery space, an area where it currently lags. Amazon Fresh’s locations and technology could also bolster Walmart’s own in-store technology initiatives, making Walmart the unrivaled leader in brick-and-mortar and online grocery retail.

Food Industry Facts

·         Walmart’s food and grocery sector accounts for over 55% of its annual revenue and is a major driver of in-store foot traffic.

·         Walmart already has a strong logistics infrastructure that could efficiently incorporate Amazon’s grocery distribution centers, making scaling easier than for many competitors.

What Walmart Stands to Gain

This acquisition would enable Walmart to integrate Amazon Fresh stores into its grocery network, enhancing its geographic reach, particularly in urban areas where Amazon Fresh has gained a foothold. The addition of Whole Foods would further diversify Walmart’s customer base, appealing to higher-income shoppers. The synergy between Walmart’s pricing power and Amazon’s grocery infrastructure could lead to an unparalleled competitive advantage in terms of reach, customer loyalty, and pricing.



2. Aldi: A Low-Cost Leader’s Ambition for Market Expansion

Why Aldi Might Buy Amazon’s Grocery Division

Aldi, known for its no-frills, low-cost grocery model, has been aggressively expanding in the U.S. in recent years, aiming to reach 2,500 stores by 2025. For Aldi, acquiring Amazon’s grocery assets would fast-track its expansion, giving it access to a network of premium stores and new urban markets where its presence is still limited. Aldi’s simplified supply chain and operational efficiency could be effectively applied to Amazon Fresh and even Whole Foods, allowing it to achieve profitability where Amazon has struggled.

Food Industry Facts

·         Aldi has grown 10% in grocery market share over the past five years, capitalizing on its low-cost, high-efficiency model, which appeals to cost-conscious consumers.

·         U.S. consumers have shown increasing favorability toward discount grocery chains, and Aldi’s model has been particularly successful in low-margin environments.

What Aldi Stands to Gain

By leveraging Amazon’s grocery infrastructure, Aldi could expand its reach in dense metropolitan areas, where real estate prices and logistics have typically posed barriers to entry. Aldi’s operational efficiency, coupled with Amazon’s assets, would create a streamlined grocery experience that could challenge conventional players like Kroger and Target. Additionally, Aldi could use Amazon’s tech innovations to refine its customer experience, perhaps adopting cashier-less technology to lower operational costs.



3. Apollo Global Management: A Hedge Fund’s Play for High-Value Assets

Why Apollo Might Buy Amazon’s Grocery Division

Apollo Global Management, one of the world’s largest private equity firms, has a history of acquiring distressed or undervalued assets and turning them profitable through restructuring. Amazon’s grocery business, while not distressed, fits the profile of an asset that could benefit from operational reorganization and increased efficiency. Private equity groups like Apollo often target businesses with potential for streamlining operations and cutting costs, making Amazon’s grocery business a prime candidate for such an overhaul.

Food Industry Facts

·         Apollo has acquired companies across a wide range of sectors, from Albertsons to Hostess Brands, showcasing its familiarity with both the grocery and consumer packaged goods industries.

·         The grocery industry’s market value is projected to grow 5% annually over the next decade, offering high-return potential for firms that can optimize operations and control costs effectively.



What Apollo Stands to Gain

Apollo could restructure Amazon’s grocery business, dividing it into smaller entities or consolidating it with other grocery assets to streamline operations and maximize profitability. Whole Foods, with its strong brand identity, could operate independently under Apollo’s management, with investments focused on sustainable growth in higher-income neighborhoods. Amazon Fresh, meanwhile, could either be sold to other grocery chains or transformed into a high-tech, low-cost model focused on efficiency and profitability.

Why a Sale Could Be Advantageous for Amazon

The grocery business has proven more complex and cost-intensive than Amazon likely anticipated. The grocery sector’s low margins are incompatible with Amazon’s broader financial model, which prioritizes high-growth, high-margin divisions like AWS and digital advertising. By selling its grocery business, Amazon could focus on its profitable segments while freeing itself from a sector that continues to demand cash flow without promising comparable returns.


Think about a little bit more, Amazon’s grocery assets represent a compelling opportunity for strategic buyers or investment groups interested in gaining market share, expanding operations, or investing in high-potential assets. Whether by a dominant player like Walmart, an efficient operator like Aldi, or a private equity giant like Apollo, acquiring Amazon’s grocery business could enable these entities to reshape the grocery market, making the sale a promising prospect for both Amazon and potential buyers.

For international corporate presentations, regional chain presentations, educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert, and public speaking will leave success clues for all. For more information visit GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869



Wednesday, November 6, 2024

Thanksgiving in America: Want to Come Over but Eat Healthy? Bring Your Own Food

 


Thanksgiving is a time to gather, share, and, of course, indulge in a memorable meal. This year, with more Americans embracing diverse diets and healthier habits, “bring your own dish” might be the new Thanksgiving trend, especially as hosts try to accommodate an array of dietary preferences, according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

With more than 45 million Americans attending gatherings outside their own homes, traditional staples like turkey, mashed potatoes, and pumpkin pie still reign supreme, but new lifestyle-conscious dishes are making a big entrance.

2024 Thanksgiving Insights: A Feast of Traditions and Dietary Flexibility

As 76% of Americans report that they’ll attend a Thanksgiving meal at someone else’s home, nearly half (47%) admit that Thanksgiving is one of the few times of year when they fully indulge without worry. Notably, 64% say they’re fine with “overeating on occasion” during this holiday. Meanwhile, the age-old tradition of leftovers is alive and well—83% of attendees hope to take home a bit of the holiday feast to enjoy the next day.


A new consumer sentiment survey of Americans sheds light on Thanksgiving food preferences, revealing which beloved dishes remain strong and how new, lifestyle-friendly dishes are reshaping the holiday menu.
This consumer sentiment survey of 1,076 U.S. adults (ages 18+) was commissioned by
NCSolutions in September 2024 to assess Thanksgiving eating habits and preferences, with results representative of the U.S. population by age, gender, region, ethnicity, marital status, education level, and household income. Let’s see what they found:

Classic Favorites Still Rule the Table

As expected, the traditional sides of mashed potatoes (75%), turkey (73%), and gravy (69%) are planned Thanksgiving staples this year. Rolls (66%), stuffing (63%), and cranberry sauce (59%) also round out the iconic meal. Sweets have their place, too, with pumpkin and apple pie topping dessert lists across the country.

Plant-Based and Alternative Options are Gaining Traction

Accommodating dietary preferences is becoming essential as more hosts welcome plant-based and alternative dishes to their Thanksgiving spreads. Nearly 30% of hosts will offer plant-based options, with 37% of Gen Z and 38% of millennials planning plant-based dishes compared to just 15% of baby boomers. Creative alternatives like lentil shepherd’s pie, vegan stuffing, and cauliflower “wings” are making their way to the Thanksgiving table as people increasingly prioritize dietary considerations.


While 58% of Americans feel it’s not rude for a host to ask guests to bring their own dish to ensure dietary compatibility, this practice is still met with mixed feelings. Among those following specific diets, 36% feel their families don’t fully accommodate their preferences, and nearly one in four have felt judged over their dietary choices. The solution? Many families are finding balance with “bring your own dish” as a friendly compromise that adds variety and ensures everyone enjoys the meal.

Think About This: Tapping into Thanksgiving's Dietary Diversity

As Thanksgiving approaches, consumer goods brands can make a meaningful impact by catering to the modern Thanksgiving menu. Offering products that are vegan, gluten-free, dairy-free, or low-calorie allows brands to tap into the demand for healthier options while respecting the traditions that make Thanksgiving special. By aligning products with the Thanksgiving spirit and diverse dietary needs, brands can establish new Thanksgiving traditions and cultivate loyalty that lasts well beyond the holiday season.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche.



Tuesday, November 5, 2024

Grocerant Guru®: Bob Evans Excels with 'Dining Out While Dining In' This Thanksgiving



More families than ever are looking to make Thanksgiving stress-free, delicious, and reminiscent of the flavors that bring people together. Bob Evans steps in with its Farmhouse Feasts, a celebration of family, flavor, and convenience.

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® says, Thanksgiving is all about family time, but these days, preparing the traditional feast can be daunting. Enter Bob Evans’ Farmhouse Feasts: crafted for families to savor the holiday with all the favorite dishes and none of the stress. This year, the 'Dining Out While Dining In' trend is stronger than ever as families seek the nostalgic flavors they love without hours in the kitchen. Bob Evans’ ready-to-heat-and-serve Farmhouse Feasts and other hot carryout options bring family-size convenience and cherished flavors home, all in just two hours or less.


As America’s trusted go-to for turkey and hearty family meals, Bob Evans continues to raise the bar, providing everything from slow-roasted turkey to hickory-smoked ham and all the sides, baked goods, and desserts that feel like home. “Thanksgiving is a time to cherish family moments, and with Farmhouse Feasts, we’re bringing more of those moments to the table,” said Mickey Mills, CEO of Bob Evans. “Our goal is to offer a truly relaxing holiday meal experience so families can focus on what matters most.”

Why 'Dining Out While Dining In' Is Poised to Be Big This Thanksgiving

1.       More Families Seek Time Savings – According to food industry data, over 60% of families this year want to simplify meal prep. Bob Evans offers the Farmhouse Feast as a complete solution that brings cherished flavors without hours in the kitchen.

2.       Authentic, Familiar Flavors – Studies reveal that holiday dining trends lean heavily towards comfort foods and familiar flavors. Bob Evans, known for its classic recipes, captures that nostalgia, offering slow-roasted turkey, hickory-smoked ham, and sides like bread & celery dressing that remind people of Thanksgivings past.

3.       Restaurant-Quality Meals at Home – This year, 72% of consumers are prioritizing meals from restaurants to re-create a dining-out feel at home. Bob Evans’ Farmhouse Feast embodies this trend, delivering complete meals that taste like restaurant fare but can be enjoyed around the family table.

4.       Convenience Meets Tradition – With more consumers focusing on convenience, Bob Evans bridges the gap by providing traditional Thanksgiving foods that need only heating, letting families enjoy time together without sacrificing holiday customs.

5.       Feeding Gatherings of All Sizes – With flexible options, from a family of four to larger gatherings, Bob Evans offers meals and sides that scale to any occasion, keeping family connection at the forefront of Thanksgiving celebrations.


What Bob Evans Brings to Your Thanksgiving Table

·         Farmhouse Feasts: A Full Thanksgiving Meal for Gatherings Big or Small – Select from three entrée options, including Bob Evans’ famous slow-roasted turkey, hickory-smoked ham, or slow-roasted pot roast with caramelized onions and roasted carrots. Each Feast includes crowd-pleasing sides like mashed potatoes with gravy, green beans with ham, and house-made cranberry relish. Prices start at $84.99, making this an economical choice for a stress-free holiday meal.

·         Holiday Hot Family Meals – Families on the go can enjoy Bob Evans’ signature hand-carved turkey and hickory-smoked ham served hot and ready to eat. With ample family-size portions, the Holiday Hot Family Meal, priced at $99.99, also includes mashed potatoes, buttered corn, and a freshly baked pumpkin pie, perfect for a gathering of six.

·         New Potato Lovers Bundle – Because extra potatoes are always a favorite! The Potato Lovers Bundle, available for just $29.99, features two family-size roasted sweet potato dishes plus mashed potatoes and gravy, ensuring no one leaves the table unsatisfied.


·         Family-Size Sides and Seasonal Desserts – Adding to the Farmhouse Feast, Bob Evans offers favorites like macaroni & cheese, mashed potatoes with gravy, and green beans with ham for just $12.99 each. Complete your feast with seasonal pies like pumpkin and pecan, starting at $12.29, to wrap up Thanksgiving on a sweet note.

·         Dine-In Option Available Thanksgiving Day – All Bob Evans locations will be open from 8 a.m. to 7 p.m. for guests who want a traditional dine-in experience. Enjoy the Premium Celebration Platter featuring slow-roasted turkey, hickory-smoked ham, sides, and a slice of pie, all for $18.99.

“We know families want their Thanksgiving to feel special, yet easy,” said Bob Holtcamp, President and Chief Marketing Officer at Bob Evans. “The Farmhouse Feasts deliver the flavors of home, with dishes our guests remember fondly from childhood. We’re here to help families focus on what Thanksgiving is really about.”

Families can order Farmhouse Feasts online or through the Bob Evans app, available for carryout, curbside pickup, or delivery until November 26. For details and to order, visit BobEvans.com.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: FacebookLinkedIn, or Twitter 




Monday, November 4, 2024

The Rise of Food-Focused Convenience Stores: 7-Eleven and Industry Leaders Set New Standards

 


In recent years, convenience stores have taken a major turn, transforming into food-focused retail hubs that serve as serious competitors to restaurants. Brands like 7-Eleven, Circle K, Sheetz, and Wawa have pioneered this shift, leveraging food sales to drive customer frequency, top-line growth, and profitability. This change is part of a broader industry trend in which convenience stores are emerging as key players in the foodservice sector, finding new ways to meet consumers' evolving dining habits.

There is one company that is the undisputed king of food branding and sales according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who says 7-Eleven's Slurpee has become a global icon, symbolizing the brand's success in food and beverage branding on a massive scale.

Launched in 1966, the Slurpee has since evolved from a simple frozen beverage to a cultural phenomenon, recognized for its colorful, frosty appeal and fun, refreshing experience. With strategic marketing, seasonal flavors, and unique promotional events like "7-Eleven Day," where customers enjoy free Slurpees, the drink has become synonymous with the 7-Eleven brand worldwide. This clever, consistent branding has fueled customer loyalty, driven frequent visits, and helped distinguish 7-Eleven in the crowded convenience store market, reinforcing Slurpee as more than just a drink—it’s a nostalgic and beloved global treat that defines the brand's commitment to fun, accessible indulgence.


7-Eleven: Continues Redefining Convenience with Food-Forward Growth

7-Eleven, a global icon in convenience retailing, has expanded its influence through a strategic emphasis on food offerings. Operating nearly 1,100 restaurant locations in the U.S., 7-Eleven's commitment to food-forward stores highlights the brand’s shift towards integrating restaurant-quality food in a convenience store setting. This effort includes plans to open 500 additional food-centric stores in the coming years, aptly named "New Standard" stores, which feature an enhanced layout, digital services, and restaurant-quality offerings.

7-Eleven’s food offerings and branding innovations are central to its growth strategy. This New Standard prototype evolved from its earlier "Evolution stores," where the company tested fresh product concepts, technology, and restaurant offerings such as Laredo Taco Company, Raise the Roost Chicken & Biscuits, and Speedy Café. Three key initiatives underscore 7-Eleven's success with food:

1.       Branded Restaurant Offerings: 7-Eleven’s in-store restaurant concepts like Laredo Taco Company and Raise the Roost are tailored to consumer cravings for high-quality, quick-service meals. These brands bring a unique flavor and variety that distinguish 7-Eleven’s offerings from traditional fast food.

2.       Technology and Personalization: Leveraging mobile checkout, app integration, and third-party delivery services, 7-Eleven has modernized the convenience store experience. These innovations cater to busy customers seeking efficiency and customization in their food choices, ultimately increasing transaction frequency and loyalty.

3.       Higher Revenue with New Standard Stores: Units built under the New Standard model have already demonstrated remarkable success, achieving a 13% sales lift in their first year. With a projected 30% increase in average daily sales per store by full maturity, these locations show that aligning convenience retailing with foodservice quality and choice is a profitable move.

7-Eleven’s holistic approach to food branding, technology, and the customer experience positions it as a formidable player, even in the restaurant sector. By creating distinct restaurant offerings, the brand solidifies itself as a dining destination while reinforcing convenience store profitability.



Circle K: Fueling Growth Through Food and Beverage

Circle K has followed a similar path by expanding its food and beverage offerings, increasingly setting itself apart in a highly competitive convenience store landscape. Alimentation Couche-Tard, Circle K’s parent company, even considered a merger with 7-Eleven, recognizing the synergies in food-focused growth between the two convenience giants. Circle K’s approach is built on three key pillars:

1.       Grab-and-Go Meals and Fresh Food: Circle K's focus on fresh, ready-to-eat items has attracted customers looking for quality, convenience, and affordability. By offering a variety of pre-packaged meals and snacks, Circle K meets the needs of consumers seeking an alternative to fast food without compromising on flavor or freshness.

2.       Global Beverage Offerings: Known for its Frosty and Simply Great Coffee, Circle K has found success in creating unique beverage programs that drive repeat traffic. Limited-time seasonal flavors and customizable options add a level of engagement typically associated with specialty cafes, drawing in consumers frequently.

3.       Loyalty Programs and Promotions: Circle K's Easy Rewards program has incentivized regular visits and increased basket size. Through personalized discounts and offers, the brand strengthens customer loyalty, making Circle K a habitual stop for food and beverage purchases.


Sheetz: A Convenience Store with a Restaurant Attitude

Sheetz has gained a strong reputation for its restaurant-like menu, featuring made-to-order (MTO) food that rivals that of many quick-service restaurants. Sheetz's success stems from its ability to transform convenience stores into destinations for unique food options. Three primary areas drive Sheetz's customer appeal:

1.       Customization and Quality: The MTO model allows customers to personalize everything from sandwiches to salads, mirroring a casual dining experience. The attention to quality and freshness distinguishes Sheetz’s offerings from traditional convenience store fare.

2.       Seasonal and Regional Menu Items: Sheetz frequently introduces seasonal items and limited-time promotions that resonate with local tastes. From breakfast sandwiches to hearty late-night options, Sheetz appeals to a broad customer base, driving frequency across different meal occasions.

3.       Around-the-Clock Service: Open 24/7, Sheetz caters to a diverse demographic, including shift workers and night owls. Its menu availability at all hours reinforces Sheetz as a reliable destination for high-quality food, no matter the time, keeping its stores busy and profitable.


Wawa: Elevating Convenience with Signature Offerings

Wawa, known for its premium coffee and extensive food menu, has built a loyal following by focusing on a high-quality customer experience that emphasizes convenience without sacrificing taste. Three strategic initiatives have set Wawa apart:

1.       Quality Beverage Program: Wawa’s coffee and smoothie options are beloved by consumers. By continually expanding and refining its beverage menu, Wawa has become a go-to destination for customers seeking high-quality drinks, enhancing daily visit frequency.

2.       Branded Food and Customization: From hoagies to breakfast sandwiches, Wawa’s signature food offerings encourage customization, allowing customers to make each item uniquely theirs. The brand has successfully positioned its food as not just convenient but also crave-worthy, increasing both average ticket size and frequency of visits.

3.       Community-Focused Initiatives: Wawa has built strong relationships with the communities it serves, often running events, promotions, and charitable efforts that foster brand loyalty. These community touchpoints increase customer loyalty, driving frequent visits for both food and fuel.


The Future of Food-Driven Convenience Retail

Convenience stores, traditionally focused on fuel and quick snacks, are now redefining their role by emphasizing food quality, branding, and customer experience. 7-Eleven, Circle K, Sheetz, and Wawa are all driving this transformation, blurring the lines between restaurants and convenience stores. As 7-Eleven’s New Standard stores show, there’s tremendous growth potential in food-focused locations, with new units driving 13% higher same-store sales than the rest of its portfolio and projecting continued growth over the next four years.

Through strategic investments in branded food offerings, technology, and personalization, convenience stores are set to capture a significant share of food sales from restaurants. This pivot isn’t just about convenience but also about offering customers a destination for high-quality, affordable, and customizable food options. As consumer demand for convenience and choice grows, these retailers are poised to meet it, further embedding food as a core element of convenience retail success.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter