Thursday, April 5, 2012

Why are restaurant consumers finding other options?

The Retail Foodservice growth leadership Award for the 4th consecutive year goes to the Convenience Store sector.  Convenience store sales for 2011 were $ 681 Billion, an increase of 18.5%.  When consumers are ready-2-eat they are entering a convenience store at an ever increasing rate garnering share from restaurants.  Foodservice same store sales within C-stores were up 10.8% in 2011 with a reported increase of gross profit up 7.5%. Success does leave clues and the C-store sector has been picking them up from restaurants.

While the roller grill was the vehicle that created the platform for foodservice success 30+ years ago within the c-store sector.  Industry leaders understand that consumers are dynamic not static and today food prepared on-site at c-stores is driving the fresh food category performance within the sector today.  In fact packaged sandwiches are slipping in year over years sales within the c-store sector.  The roller grill continues to contribute however its role will continue to diminish. Fresh QSR ilk niche offerings are driving top line growth and bottom line profits within the convenience store sector today.

Walgreens has picked up the same clues and now has test units from coast to coast including New York, Chicago and San Francisco with new fresh in store prepared food offerings.  Even the industry lagging grocery sector last year reported deli prepared foods up 6-7% in sales, while only 4% in unit sales.  Regular readers of this blog understand the strength of the grocerant niche and ready-2-eat and heat-N-eat fresh prepared food.  It’s nice to see the grocery sector joining in.

Bundling mix and match meal component options is an area in which the convenience store sector excels. In fact package beverages are now the second most profitable category in c-stores and showing no hint of decline. While restaurants tried bottled beverages most have withdrawn their offerings. Why?

Immediate consumption is still driving consumer focus while targeting fresh prepared food.  Time starved and ill equipped to cook a multi-ethnic flavor profile of foods; consumers will continue to drive this niche to continued success.  Are you ready for help Burger King?  A better menu mix might be better than selling off your stores.

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking. Johnson, or

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