THE CUSTOMER HAS LEFT THE BUILDING: Why Chain Restaurants Are Losing Share of Stomach to C-Stores, Grocers, and Anyone Else Willing to FOLLOW THE CONSUMER

 

When consumers are hungry, they want to eat.

They do not stop and ask whether the food is being sold by a restaurant, grocery store, convenience store, drug store, dollar store, food truck, airport, train station, gas station—or increasingly, somewhere they never considered a foodservice destination before.

They simply ask: “What can I get, where can I get it, how fast can I get it, what will it cost, and will I like it?”

That is the inconvenient truth many chain restaurant executives still refuse to confront.

According to Steven Johnson, Grocerant Guru® at Tacoma, WA-based Foodservice Solutions®, the consumer is dynamic, not static—and the food industry continues to build strategies around a consumer who no longer exists.

The biggest threat to legacy chain restaurants isn't another restaurant.

It is the consumer's willingness to buy food anywhere.

And that means the traditional definition of a restaurant competitor is obsolete.

Channel Blurring Isn't the Problem. Channel Blindness Is.

I first began talking about channel blurring more than a decade ago.

Today, I would argue that channel blurring isn't even the right term anymore.

There are no channels in the consumer's mind. There are only occasions.

Hungry? Find food.

Need breakfast? Find food.

Need dinner for the family? Find food.

Need something portable between meetings? Find food.

Need something at 10 p.m.? Find food.

Need something inexpensive? Find food.

Need something fresh, fast and convenient? Find food.

The consumer doesn't care about the organizational chart separating a QSR from a c-store, a supermarket deli, a dollar store or a restaurant delivery platform.

Those boundaries exist inside corporate headquarters—not inside the consumer's stomach.

And the data increasingly proves it.

Circana reported that U.S. foodservice operator spending reached $357.3 billion for the 12 months ending June 2025, up 3.7% year over year, even as the number of foodservice cases increased only 0.9%. In other words, the industry is generating more dollars in an environment where transaction growth is considerably harder to find.

That should be a giant warning sign for every restaurant CEO, CMO and chief merchandising officer.

When customers aren't necessarily making more foodservice visits, every visit becomes a battle for share of stomach.

Meanwhile, the Convenience Store Industry Is Eating the Restaurant Industry's Lunch

Here is where restaurant executives should really start paying attention.

In 2025, U.S. convenience-store foodservice accounted for 28.5% of total in-store sales and 38.9% of in-store gross profit dollars.

Prepared food alone represented 73.9% of convenience-store foodservice sales, including pizza, chicken, burgers, sandwiches, wraps and salads.

Read those numbers again.

Convenience stores aren't simply selling gasoline with a few hot dogs beside the register.

Foodservice has become a core economic engine of the convenience-store business.

And this isn't a one-year experiment.

NACS reports that foodservice represented only 11.9% of convenience-store in-store sales in 2005. By 2025, it represented 28.5%.

That is not channel blurring.

That is channel migration.

And the consumer is doing the migrating.

The Customer Doesn't Need Your Restaurant Anymore

That is the uncomfortable part.

For decades, restaurant operators could rely on location, habit, brand recognition and routine.

The consumer's food decision was comparatively simple:

Where do I normally eat?

Today the question is different:

What is the best food solution for me right now?

That shift changes everything.

Circana reported in 2025 that value-menu traffic increased 1% across the foodservice industry in the quarter ending June 2025 while overall restaurant traffic declined 1%. Circana also found that 50% of consumers who had not recently dined out said lower prices would encourage them to visit restaurants, increasing to 54% among households earning less than $75,000.

But here is where restaurant marketers need to think beyond price.

Value is no longer synonymous with cheap.

Value is the consumer's calculation of:

Price + Quality + Convenience + Experience + Portability + Relevance.

That is why a $7 meal from a convenience store can compete with a $10 or $12 restaurant meal.

It isn't necessarily because it is better food.

It may simply be better food for that particular occasion.

And that distinction is enormous.

The Restaurant Industry Is Still Measuring the Wrong Battlefield

The restaurant industry has become remarkably sophisticated at measuring restaurants.

Same-store sales.

Average check.

Ticket times.

Labor costs.

Food costs.

Drive-thru times.

Digital orders.

App downloads.

Loyalty members.

But the consumer doesn't measure your restaurant that way.

The consumer compares you with everything else available at the moment of need.

That includes the supermarket deli.

The c-store.

The warehouse club.

The dollar store.

The coffee shop.

The food truck.

The ghost kitchen.

The delivery platform.

The frozen-food aisle.

The ready-to-eat meal in a grocery store.

The heat-and-eat dinner waiting at home.

And every other food option competing for the same stomach.

The restaurant industry's most dangerous competitor may not have a restaurant.

The Numbers Are Already Moving

Circana reported that U.S. restaurant traffic declined 0.3% in 2025, while global foodservice traffic increased only 0.2%. At the same time, average spending per visit continued to rise, including a 3% increase in average spend per visit during the fourth quarter of 2025.

That creates a deceptively attractive situation.

Sales dollars can grow while customer counts remain under pressure.

And that is precisely why chain restaurant executives should stop celebrating topline growth without asking the more important question:

How many customers did we actually win?

Revenue can be inflated by price.

Average check can increase because consumers are paying more.

But customer counts tell you whether people are actually choosing your brand.

Share of stomach is ultimately won customer by customer, occasion by occasion.

Wawa Shouldn't Be an Anomaly. It Should Be a Wake-Up Call.

Years ago, research highlighted something that shocked many traditional restaurant executives: consumers could evaluate a convenience-store foodservice experience more favorably than service at prestigious restaurant brands.

The lesson wasn't that a convenience store had suddenly become a fine-dining restaurant.

The lesson was far more important.

Consumers judge brands against the expectations of the occasion—not against the organizational category in which the company places itself.

A customer doesn't say:

“This is a c-store, therefore I will accept inferior service.”

They say:

“I got what I wanted quickly, it tasted good, it was convenient, the price made sense and the experience worked.”

Expectation met. Value delivered. Customer satisfied.

That's the competition.

The C-Store Has Learned What Many Restaurants Forgot

The convenience-store industry understands something that many legacy restaurant brands have forgotten:

Convenience is not a feature. Convenience is the business model.

In 2025, the U.S. convenience industry generated $341.2 billion in in-store sales and merchandise, up 1.7% from 2024. NACS also reports approximately 160 million convenience-store transactions every day.

Think about that.

The c-store industry has millions of opportunities every day to say:

“We have food.”

And increasingly, that food is fresh, prepared, portable and ready now.

Restaurant marketers should not dismiss that as a gas-station strategy.

They should recognize it as a consumer strategy.

The New Foodservice Battlefield Is Share of Stomach

At Foodservice Solutions®, we have long described this as Share of Stomach.

You are either:

Garnering share of stomach

or

Capitulating share of stomach.

There is very little middle ground.

Every time a consumer chooses a prepared sandwich at a convenience store instead of your restaurant, that is share of stomach.

Every time a consumer buys a rotisserie chicken and prepared sides at a supermarket instead of ordering dinner, that is share of stomach.

Every time a consumer buys a heat-and-eat meal, that is share of stomach.

Every time someone substitutes a snack-sized meal, coffee-and-food combination, grocery deli meal or portable breakfast for a traditional restaurant occasion, that is share of stomach.

The consumer hasn't stopped eating.

The consumer has simply expanded the definition of where eating happens according to the Steven Johnson. 

The Restaurant Brand Model Needs a Reboot

The old restaurant model essentially said:

Build restaurants → advertise restaurants → drive customers to restaurants.

The emerging model must say:

Identify the consumer occasion → identify the consumer need → create the food solution → make it available where and when the consumer wants it → remove friction → build loyalty.

That is a radically different business model.

And it requires restaurant executives to stop asking:

“How do we get customers into our restaurant?”

and start asking:

“Where is our customer eating when they aren't eating with us—and why?”

That is the question worth millions.

Circana's 2025 audience-targeting expansion underscores the point: foodservice marketers can now target not only their own customers but consumers who visit competing restaurant brands and convenience-store foodservice.

In other words, the technology now exists to follow the consumer across foodservice brands.

The question is whether restaurant executives have the courage to do it.

Stop Protecting the Brand. Start Protecting the Customer.

Brand protectionism was once a powerful strategy.

Today, excessive brand protectionism can become brand isolation.

If the consumer wants portability, give them portability.

If they want personalization, give them personalization.

If they want value, redefine value.

If they want speed, engineer speed.

If they want fresh food outside traditional meal periods, create fresh food outside traditional meal periods.

If they want restaurant-quality food somewhere other than a restaurant, figure out how your brand gets there.

The National Restaurant Association's 2025 research found that 64% of full-service customers and 47% of limited-service customers said the dining experience was more important than price. At the same time, 47% of operators planned to add discounts, deals or value promotions to drive traffic.

That creates an important strategic distinction:

"Price may get the customer to look.

Value gets the customer to choose.

Experience gets the customer to return. (Johnson)

The Five P's Are Not Dead—Your Interpretation of Them Might Be

Foodservice Solutions® has long challenged restaurant and retail food marketers to think differently about the FIVE P's of Food Marketing.

Price remains important.

But price alone won't save a brand.

The winning equation is about connecting the right Product, Price, Place, Promotion and Portability to the consumer's immediate need.

And portability deserves special attention.

Because today's consumer increasingly wants food that travels.

Food that fits into the car.

Food that fits into a meeting.

Food that fits into a commute.

Food that fits into a child's schedule.

Food that fits into a workday.

Food that fits into a couch.

The meal is no longer necessarily an event at a table.

It is increasingly a participant in the consumer's life.

The Customer Has Already Moved

The biggest mistake a restaurant CEO can make in 2026 is assuming that consumers are waiting for the industry to catch up.

They aren't.

They have already moved.

They have moved across channels.

Across dayparts.

Across meal occasions.

Across formats.

Across price points.

Across retailers.

Across digital platforms.

Across traditional definitions of foodservice.

The consumer isn't confused.

The consumer is liberated.

It is the industry that is confused.

So I will repeat something I have said for years:

Channel blurring exists only in the blind eye of the brand manager. It does not exist in the mind's eye—or stomach—of the consumer.

The consumer sees food.

The consumer sees convenience.

The consumer sees value.

The consumer sees choice.

And the consumer votes with their wallet.

The restaurant brands that understand this will build a larger Share of Stomach.

Those that don't will continue explaining why their customer counts are declining while congratulating themselves because the average check is higher.

"That isn't growth.

That's capitulation disguised as growth. (Johnson) 

 

Three Insights From the Grocerant Guru®

1. Stop Measuring Restaurants. Start Measuring Food Occasions.

Your real competitive set isn't the restaurants listed in your category report. It is every place your customer can satisfy the same eating occasion. If your competitive analysis doesn't include c-stores, grocery deli, dollar stores, delivery, ready-to-eat and heat-and-eat meals, your competitive analysis is incomplete.

2. Your Customer Count Is More Important Than Your Corporate Story.

A higher average check can make a declining customer base look healthier than it really is. Track customer acquisition, customer retention, frequency and Share of Stomach alongside sales and margin. If you are losing customers while raising prices, eventually the math catches up with you.

3. Build the Food Brand Around the Consumer—Not the Building.

The restaurant used to be the destination.

Today, the consumer is the destination.

Build food that travels. Build meals that fit the occasion. Build value that means more than a discount. Build technology around convenience. Build menus around individualization. And most importantly, build a business model capable of following the consumer wherever the consumer chooses to eat next.

Consumers are dynamic, not static.

Your brand must be dynamic too—or someone else's brand will eat your lunch.

Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenience, meal participation, differentiation and individualization?

Contact Steven Johnson, Grocerant Guru®, at Steve@FoodserviceSolutions.us or visit Foodservice Solutions®.

The question isn't whether the customer has moved.

The question is whether your brand moved with them.