Convenience stores are increasingly capturing foodservice dollars by offering signature menu items that compete with quick-service restaurants.
Higher Margins Drive Foodservice Growth
Foodservice is becoming a larger portion of in-store sales for convenience store brands. During a recent webinar, experts discussed how operators compete for food-away-from-home dollars through signature foods and restaurant-inspired flavors. The data shows this shift is profitable. Foodservice now accounts for 28.5% of in-store sales at C-stores but 38.9% of gross profit dollars. Nearly three-quarters of foodservice sales come from prepared foods.
“People are choosing C-store food because it’s really high quality, and it’s fresh, and it’s flavorful,” said Marie Molde of MenuData. “So, I think the segment is really changing.”
Consumers are not selecting convenience store food solely because it is cheap or fast. In a survey of 956 recent prepared-food buyers, 66% said that convenience stores can generally compete with restaurants on fresh, quality food. Quality and freshness were the most commonly cited factors at 26%, followed by taste or flavor at 25%. Price ranked third at 21%.
Unique menu offerings also boost store visits, according to a survey that found 43% of shoppers can identify a specific product that draws them to a particular location. Another 42% of respondents indicated they would add at least six extra minutes to their trip for a preferred food item. Brands such as Buc-ee’s, Casey’s, and Wawa have gained notice for their brisket, pizza, and hoagies, respectively.
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“You’re going to lose that purchase opportunity with one in five people if you don’t have the signature item that they’re coming in for,” Molde explained.
Menu Differentiation
Differentiation appears to be a key opportunity here. MenuData’s analysis of 11 convenience store chains revealed that sandwiches and wraps were featured on all menus, while ranch was present in 10 of the 11. In contrast, hot honey appeared on only two menus despite becoming a common restaurant item.
“Mainstream is a really good category to play in as a C-store operator,” Molde said. “It’s past that threshold, but it’s also not in the mature category yet.”
When tested with consumers aged 18 to 34, 35% chose a $6.99 hot honey chicken sandwich in a blind purchase test compared to 26% who selected the standard version. MenuData also highlighted harissa, gochujang, and chili-lime as emerging restaurant flavors with potential for convenience store adoption.
Price remains part of the equation, too. In a comparison of matched breakfast sandwiches, C-stores generally cost less than QSRs, with gaps ranging from roughly 4% to 23%. However, price alone may not be enough to turn a convenience stop into a full-fledged food destination.
