Sunday, October 6, 2013

Do Convenience Stores have a Competitive Edge Over Restaurants?

Restaurant customer marketing migration has been well documented by Foodservice Solutions® as regular readers of this blog know.  Foodservice Solutions® GrocerantGuru™ Steven Johnson identified five universal commonalities driving the customer migration and included them in the 5 P’s of food marketing.

Today restaurant industry leaders are pondering how to ebb customer migration and garner additional customers. One such leader is Ron Shaich CEO of Panera Bread who when writing about industry competitiveness said “You can go back and look at the top 50 restaurant companies 30 years ago; half of them no longer exist. They were sold, bought out, or hit the wall.”

Success does leave clues, here are some the clues.   Has your restaurant hit the wall? Meaning does your restaurant have flat or down customer counts? Are your sales per-store are still below 2008 levels? Are your profit margins less than they were 5 years ago? If so it might be is it time to sell, exit, or change?

Conveniences stores on the other hand as an industry sector have a 29% increase according to The NPD Group since 2008. They continue to garner the largest share of restaurant industry customers migrating.  They are doing it by expanding, bundling, fresh prepared food meal components as a direct competitor to the restaurant sector. 

Convenience stores the ilk of Sheetz, Rutters, Wawa, and 7 Eleven are all developing a differentiated customer experience that range from direct competition within the Quick Service Restaurant sector to Fast Casual.

In fact Wawa is positioned as Fast Casual To-Go and Sheetz identifies itself as a restaurant that sells gas. 7 Eleven on the other hand is developing 50% of its new stores without gasoline but with a focus on fresh prepared food.  Each of these companies are focusing on meal component bundling a hallmark of the Ready-2-Eat and Heat-N-Eat fresh food grocerant niche.

The convenience store sector is not the only sector targeting restaurant customers.  Chain drug stores have taken notice and entered the fresh prepared food niche. Specifically Walgreens with its Up-Market remodeled stores.  Convenience stores and Drug stores do not think this is a difficult time or environment in which to enter the fresh prepared food space.  In fact that they find it the perfect time to garner new customers, drive frequency, build bottom line profits.

Foodservice Solutions® Grocerant Guru™ contributes the new found success by both Convenience store and Drug stores sectors to the ability to leverage big data.  While many restaurants leverage loyalty programs, customer data that provides strong information on product, customer frequency and pricing opportunity. Conveniences stores and drug stores are looking at data outside the four walls.  Do you have Outside Eye’s?

Foodservice Solutions® specializes in outsourced business development leverage out Outside Eyes for inside Profits. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy Visit , Johnson, or

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