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

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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

Hand Held Food for Immediate Consumption Will Drive Casey’s General Stores Growth

 

At the intersection of consumers trends, pizza delivery success, and branded line extensions Casey’s General Stores have added new hand-held food menu items for immediate consumption is a perfect fit Edifying its consumer focused grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared menu in the minds-eye of the consumer, according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Here are some of the reasons according to Johnson:

1.       Convenience: Casey's General Stores are often located in convenient locations, such as along highways or in rural areas. Customers who are on the go and short on time appreciate the ability to grab a quick and easy bite to eat without having to stop at a restaurant or sit down for a meal.

2.       Impulse purchases: Hand-held food items are often impulse purchases, meaning that customers may not have planned on buying them but are enticed by their convenient packaging and tempting displays. This can be especially true for customers who are hungry or tired, which can be common for people traveling or stopping at a gas station.

3.       Variety: Casey's can offer a wide variety of hand-held food options to cater to different tastes and dietary needs. This could include items like:

4.       Sandwiches: Pre-made sandwiches, hot dogs, and burritos are popular choices for a quick and filling meal.

5.       Snacks: Casey's can offer a variety of sweet and savory snacks, such as chips, candy bars, fruit, and trail mix.

6.       Baked goods: Fresh-baked donuts, muffins, and cookies are popular grab-and-go options for breakfast or a sweet treat.

7.       Beverages: Casey's can offer a variety of beverages to complement hand-held food items, such as coffee, fountain drinks, bottled water, and energy drinks.

8.       Profitability: Hand-held food items typically have a high profit margin for convenience stores like Casey's. This means that the store can make a good profit on each item sold.

9.       Minimal preparation: Most hand-held food items require minimal preparation, which allows Casey's to keep labor costs low and ensure that customers can quickly get what they need.

Overall, hand-held food for immediate consumption is a strategic fit for Casey's General Store due to its convenience, impulse appeal, variety, profitability, and ease of preparation. These factors combine to make it a popular and profitable category for the store.

Brad Haga, senior vice president of prepared food and dispensed beverages at Casey's, stated, "Our guests will be delighted when they find all of these delicious sandwiches in our warmers now, including my personal favorite — the Spicy Crispy Chicken," ... "In partnership with our culinary and operations teams, and our suppliers, we nailed these new sandwiches. The guest feedback from our soft launch has been overwhelmingly positive and now we're sharing with all of Casey's Country that we are the place to get a high-quality sandwich when you're on-the-go."

Now let’s look at the four new sandwiches:

·         Spicy Crispy Chicken Sandwich — Made with a marinated and breaded fillet in a blend of red chili pepper and spices, served with crunchy dill pickle chips on a warm, brioche-style bun

·         Crispy Chicken Sandwich — Made with a marinated and breaded fillet in a blend of savory spices, served with crunchy dill pickle chips on a warm, brioche-style bun

·         Quarter Pound Angus Beef Burger — Topped with melted American cheese and served on a warm, brioche-style bun

·         Breaded Pork Sandwich — Made with a delicious pork fritter and served on a warm, brioche-style bun

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Why Hiring Recycled Restaurant Executives is Counterproductive

 

Regular readers of this blog know that the restaurant industry is facing a labor crisis, as many operators struggle to find and retain qualified staff. Some may be tempted to hire experienced executives from other restaurants, hoping to benefit from their expertise and connections.

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, this strategy may backfire, as recycled restaurant executives may not be the best fit for the unique challenges and opportunities of each restaurant.

Recycled Executives May Bring Old Habits and Biases

One of the risks of hiring recycled restaurant executives is that they may bring old habits and biases from their previous roles, which may not suit the current needs and goals of the new restaurant. For example, an executive who worked for a large chain may not be able to adapt to the culture and operations of a small, independent restaurant. They may impose standardized processes and policies that stifle creativity and innovation. They may also have a narrow view of the market and the competition, and fail to recognize the changing preferences and expectations of the customers.

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Recycled Executives May Lack Fresh Ideas and Perspectives

Another drawback of hiring recycled restaurant executives is that they may lack fresh ideas and perspectives that can help the restaurant grow and improve. The restaurant industry is constantly evolving, and what worked in the past may not work in the present or the future. Recycled restaurant executives may be reluctant to embrace new trends and technologies, and may resist change and experimentation. They may also have a limited network and exposure, and miss out on valuable insights and opportunities from other industries and sectors.

Recycled Executives May Create Conflict and Turnover

A final pitfall of hiring recycled restaurant executives is that they may create conflict and turnover among the existing staff and stakeholders. Recycled restaurant executives may have a different vision and style than the owner, the manager, or the employees, and may clash with them over various decisions and actions. They may also have a negative reputation or baggage from their previous roles, and may face resistance and distrust from the customers, the suppliers, or the community. These conflicts may result in lower morale, productivity, and performance, and may lead to higher turnover and attrition.

Think About This

Hiring recycled restaurant executives may seem like a quick and easy solution to the labor crisis in the restaurant industry, but it may be counterproductive in the long run. Recycled restaurant executives may not be able to adapt to the specific needs and goals of each restaurant, and may bring old habits and biases, lack fresh ideas and perspectives, and create conflict and turnover. Instead of relying on recycled restaurant executives, restaurant owners should invest in developing and retaining their own talent, and seek out diverse and innovative leaders who can bring value and growth to their restaurants.

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: Facebook,  LinkedIn, or Twitter

McDonald’s Success Looking A Customer Ahead with CosMc’s

 

McDonald’s, the fast-food behemoth, has a rich history of investing in other restaurant chains.  In the late 1990’s, as regular readers of this blog know, McDonald’s bought Donato’s Pizza, Boston Market, and a stake in fledging Chipotle Mexican Grill. 

However less than a decade later, McDonald’s divested from all three chains, which had become distractions as McDonald’s struggled.  At least that was the company line. According to an article by Yahoo Finance, McDonald’s sold its stake in Chipotle, which represented approximately 82.2 percent of the voting interest and 0.8 percent of the economic interest in Chipotle prior to the exchange offer.

It was that same article that stated that McDonald’s CEO at the time, Steven Easterbrook, said that Chipotle was a distraction and that the company executive wanted everyone to put 100 percent io their efforts into the McDonald’s brand, so they sold the company’s shares.  

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® as it turned out the distraction was with McDonalds’s company executives not with any of the company’s operations or trajectory at the time.  McDonald’s success if in large part because it continues looking ‘a customer ahead’.  They understand their own customer and know what else they want in at their stores and that each of their consumers wants to ‘share in their stomach’.

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 In an odd turn of events the once time high flying grocerant niche concept that was mismanaged was Boston Market. Both Chipotle and Donato’s Pizza continue to garner customer and drive top line sales and bottom-line profits with solid leadership.   Now let’s talk about McDonald’s eye for success.

In case you have not heard, CosMc's, is a McDonald's internal concept is a drive-thru-only concept, anchored by its beverage offerings, saw more than double the number of visits that a typical McDonald's location saw chainwide in the same month, according to a report from Placer.ai, which uses location data from mobile devices to estimate visits to specific locations. McDonald’s understand growing share of stomach according to Johnson.

So, when CosMc's, which opened on Dec. 7, 2023, generated triple the number of visits per square foot than an average McDonald's restaurant. The new format has a roughly 2,500-square-foot footprint vs. 4,000 to 4,500 square feet for the average McDonald's location, Placer.ai reported.

Now according to RJ Hottovy, head of analytical research at Placer.ai, the CosMc's location sometimes had to accommodate spillover traffic in a separate parking lot because the drive-thru lanes were often at full capacity, indicating the potential for more sales revenue. Let’s look a recent article so you get direct quotes:

"We saw quite a bit of demand. There were so many people in the drive-thru lane that if they had more capacity, the traffic numbers would have been a lot higher," he said.

The first CosMc's, which opened in Bolingbrook, Ill., is part of a limited test. McDonald's plans to open approximately 10 CosMc's pilot locations by the end of 2024, including across the Dallas-Fort Worth and San Antonio metro areas.

"I think this really is a test and learn concept, one to track younger audience and test menu innovations," Hottovy commented. "If nothing else, CosMc's is creating a tremendous amount of buzz and attracting new customers. It's just one location for now so doesn't look like it's cannibalizing McDonald's at this point but bringing in incremental visitors (the group that wasn't coming into McDonald's as much)."

The CosMc's menu is rooted in beverage exploration, with bold and unexpected flavor combinations, vibrant colors and functional boosts, according to McDonald's. It also features a lineup of food that includes a select few McDonald's favorites, as Convenience Store News  previously reported.

CosMc's offers a seamless digital and drive-thru experience, enabling customers to use dynamic menuboards and cashless payment devices during the ordering and payment process, with guided exploration and customization along the way. Drive-thru pickup windows are assigned once their orders are ready.

The format is named after CosMc, a little-known McDonald's character from the 1980s that the chain described as "part alien, part surfer, part robot," CNN reported..

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.

Convenience Stores Business Model Conundrum

 

Times they are a changing once again. Have you heard that Volkswagen delivered around 394,000 electric vehicles (EVs) in 2023, which is a growth of 21.1% from the previous year ¹. The largest markets for Volkswagen’s EVs included China, Germany, the US, the UK, Sweden, France, Norway, and Belgium ¹. The simple fact is it will not be long that gasoline will not be a key driver for consumers stopping at a convenience store according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In what they call a ‘National Report’ CSNews recently outline what they believe lies ahead for the industry.  We want to share that in the event you missed it.  Here it is:

“The industry is pretty well aware of what lies ahead: a changing forecourt, a changing foodservice offering and a changing merchandising mix. Focusing on where the emerging trends that are driving these changes intersect will hold the key to thriving for years to come. 

EVs & the Convenience Value Proposition

The impact electric vehicles (EV) have on the convenience channel remains to be seen. Driven by consumers' desire to "go green" and legislative moves on the state and federal levels aimed at phasing out gas-powered vehicles could be a huge game changer for the industry. However, there are some critics who are not ready to crown EVs as the next big thing. In late October, economist Steve Moore told Fox Business' Varney & Co. that EVs may be the "next big flop" for automakers and likened it to Ford's Edsel model car.

But c-store retailers cannot take a wait-and-see approach if they want to keep up with major chains that are already preparing for a growing EV customer base by adding charging stations to their stores. 

Last year, Altoona, Pa.-based Sheetz Inc. surpassed a major milestone of more than 2 million EV charging sessions. An early adopter of public EV charging stations, the convenience retailer installed its first EV charger in Pennsylvania in 2012. And in September 2023, Media, Pa.-based Wawa Inc. added charging stations to its 150th location. 

Aside from embracing the evolving mobility scene, both these c-store chains have something else in common: well-known foodservice platforms that have built up what some may call a fanatical fan base. And foodservice could play — and most likely will play — a critical role in attracting the EV consumer. 

"Our convenience store customers are all having that conversation about what does five years, 10 years look like when EVs take a higher percentage of cars on the road, and how do they capture that market share of folks who need to settle down and wait for 30 minutes instead of a five-minute fuel up," said Patrick O'Mara, senior solution principal for RELEX Solutions, a supply chain and retail planning platform.

"How do you then actually transfer people from in their cars — where the cars essentially become little TV studios or movie theaters themselves — and get somebody out of their car into the facility for whatever purpose you're trying to serve?" he asked.

As O'Mara noted, Sheetz has a mix of indoor and outdoor dining options and travel centers offer an array of quick-service restaurant (QSR) options. "I think an interesting model is the truck stop-travel center model. They obviously cater to customers who are already on that similar kind of timeline, although the rest period of a driver is significantly longer than that of somebody who's just making a road trip, for example," he explained. "I think it's a good model of where you've seen QSRs that invite people to come in and sit down as opposed to having folks more of that kind of grab-and-go traditional convenience."

Whatever the mix, when it comes down to it, if retailers are positioning themselves for a future where EVs account for 20% or 50% of the market they need significantly more space dedicated to dining or entertainment "to be able to attract people to your fueling station or recharge station versus another," he added. 

EVs & the Evolving Foodservice Offer

It's not just the dedicated space that will change, but the offer itself. As Convenience Store News posed in our May 2023 issue, do c-store retailers without foodservice have a future in the industry? The answer is, probably not. Add EV customers who are looking for something to do while charging their vehicles and the answer slips closer to no. 

Whether that foodservice offer begins to resemble something like the Central Perk coffee shop in TV sitcom "Friends" or a fast-casual sit-down restaurant depends on the retailer and the geography. 

"I don't think there's a one-size-fits-all approach. In convenience today you've got Sheetz, Wawa and Casey's that are foodservice operators at a high degree, selling very different food products to very different consumers," O'Mara said. "On the east coast, having more of that lounge kind of feel makes a lot of sense, whereas maybe in the Midwest and small towns, having that coffee shop doesn't make as much sense because it doesn't attract that type of consumer."

EVs & the Evolving Experience

What is important, according to O'Mara, is standing out from the crowd. "Having that unique differentiated experience that's going to drive people into that specific location is going to make sense," he said, specifically calling out Buc-ee's. "If I'm on a road trip and I stop into a Buc-ee's, even though I'm getting gas, I'm going to spend 30 minutes inside walking through and just marveling at it. They already have an experience that's set up. They're just missing the EV charging ports because right now their consumer is a fuel consumer. 

"That's something I would describe as a unique experience. Yes, there's foodservice, you can get coffee. They don't call it a lounge or in-store dining, but they're already capturing customers for 30-ish minutes," he added. "I think having differentiated experiences based on where you're located and who your consumer is, is really going to make the difference and who's successful and making that transition to an EV consumer."

The experience does not need to be extreme and could be as simple as a dog park. As a travel center operator, Oklahoma City-based Love's Travel Stops is already well positioned to attract EV customers traveling the nation's highways. Add to it its growing dog park network, and it has upped the ante. 

"Labor costs are growing exponentially, especially in this industry, being able to have something that's low cost like a dog park where you've got more long-term maintenance costs associated as opposed to day-in, day-out labor costs, that's a great way to capture customers at a higher margin as long as you're also getting them to spend," O'Mara said. 

That brings up another conversation around EV charging: monetization, he noted. "Right now, we're almost training consumers that fuel should be free, and that's not sustainable," O'Mara said. "As we get 75% of Americans driving EVs, you have to charge for electricity. How can retailers figure out the monetization of the EV component, but then also how do they then extend and capture that customer?"

With a dog park, that may be selling dog treats or having a walk-up coffee window, so customers do not have to come inside with their dogs. "Being able to kind of pair that, again, differentiated experience I think is something that's going to create a winning environment," he noted.

Value & the Convenience Proposition

The future may bring rise to a new growing customer base, the EV consumer, but the economics of the here and now has brought rise to the value-seeking consumer.

At its meeting on Nov. 1, 2023, the Federal Reserve Board held short-term interest rates steady for the second consecutive month but the impact of continuous rate hikes since March 2022 could be felt for some time to come — especially with the possibility of a future hike on the table for the board's December meeting. 

Inflationary pressures and uncertainty are taking its toll on U.S. consumers and it has been reflected on their shopping habits, noticeably when it comes to shifting to private label brands. 

Value & the Growth in Private Label

For the first half of 2023, store brands again posted record sales and share — similar to the past 18 months, according to a report from the Private Label Manufacturers Association (PLMA). The success of store brands at the checkout includes outdistancing national brands in two key metrics.  

Store brand dollar sales across all U.S. retail outlets increased 8.2% vs. 5.1% for national brands year over year for the six-month period ending June 18, 2023, according to Circana data. That extends store brands' powerful two-year run. Measured against the first six months of 2021, dollar sales during the same period this year improved by 16%, or roughly $17 billion ($91 billion in 2021 vs. $108 billion in 2023).  

C-store chains are taking notice and many are ramping up their selection of private label items on the shelves. 

Over the past three years, Ankeny, Iowa-based Casey's General Stores Inc. expanded its private label line to more than 300 SKUS from an assortment that previously had bottled water and some bag candy. 

"It's been a tremendous boom to our business. Today about 10% of our units and about 10% of our gross profit dollars in the grocery general merchandise category come from our private label brands," President and CEO Darren Rebelez said following the company's Investors Day in late June. He added 120 of those 300-plus items are SKUS only found at Casey's. "They're unique to us. It gives our guests another reason to come to the store."

Additionally, Laval, Quebec-based Alimentation Couche-Tard Inc., the parent company of the global Circle K banner, has identified private label brands as an opportunity to grow as part of its next five-year plan. As the retailer announced on Oct. 11, 2023, it is looking to launch approximately 110 new products to its stores this year on top of the 250 to 300 products already in the merchandising mix across its stores. Currently, private brands are approaching 10% penetration in Couche-Tard's strongest markets.

Private Label & Staying Power

Regardless of what happens with the economy, there is some indication that consumers' interest in private label products could be here to stay. The second installment of the 2023 Power of Private Brands series from FMI – The Food Industry Association found that 96% of grocery shoppers purchase store brands at least occasionally and 46% purchase private brands most or all of the time. 

Furthermore, approximately 60% of shoppers are buying private brands much more or somewhat more in the past year, compared to 26% national brands.

And, according to FMI's research, 90% of shoppers say they are likely to continue purchasing private brands regardless of inflation or grocery price changes which points to the growing loyalty shoppers have for store brands. Sixty-eight percent of shoppers still cite price as their top reason for buying private brand items, while nearly and equal number (67%) cite good value.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.