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A Destination, Not Desperation
C-stores are becoming a place to go for quick, high-quality food
By Cecelia Blalock
Walk into the White Oak C-Mart in Kalispell, MT, and you’ll get a friendly greeting and a choice of tasty options to grab and go under the big sign that says "Dashboard Café," the brainchild of store proprietor Howard Breary. There’s everything from cinnamon rolls to hot pizza, hamburgers and subs, in addition to display cases offering drinks and other items to round out yet another meal on wheels. The 66-year old Breary, who ran Circle K c-stores in Montana and un-retired twice, bemoans the fact that so many meals are eaten on the run instead of at the family table but says brightly, "I’m here to take advantage of that." Most of his regular customers are en route to or from work.
Breary, like many c-store operators, is finding foodservice to be a useful tool in making up for falling margins on other c-store staples and in attracting customers. Advances in foodservice equipment, better packaging, and a wider range of available food items enable c-stores to take full advantage of the "drive-time dining" trend that shows no signs of waning. They are transforming the idea of a c-store "meal" into something more substantial than a donut and coffee, a hot dog, an energy bar or a meat snack. The sought-after convenience and quick turnaround time that are the hallmarks of a c-store can make this retail channel a destination rather than an "if all else fails" option for food.
Breary estimates that foodservice accounts for about ten percent of his monthly sales, an expected $475,000 in July. But that’s not an accurate measure of its contribution to the bottom line because foodservice drives other sales within the store.
"You can’t eat pizza without pop," he says. They package their foodservice offerings with related items, including lotto tickets.
Not for the lax
Foodservice presents challenges and must be carefully managed. Cleanliness is an absolute must in Breary’s book, both in the store and the people working there. Any prepared food item older than 45 minutes gets tossed.
"No one wants to eat food that’s been sitting around for a long time," he says. "Ninety percent of our business is repeat so everything must be fresh, hot and friendly."
That requires careful inventory control and a close eye on what sells.
"You must pre-plan tomorrow today," Breary advises. "We’re planning for next week today. You must know your business and what sells. Big sellers should be standardized. If customers want extras, they’ll ask for them.
"Don’t cheat or cut back," he continues. "Every week or month go back and review the costs. If the profit standard you have set isn’t met (either too low or too high) get rid of it. People are looking for value, not cheap. We don’t sell anything cheap. We give customers something that looks good, tastes good and is good."
Small space, no problem
A c-store’s limited space can make foodservice problematic. But companies are offering new equipment solutions and product programs to go with it. Mac’s Market™ is a food solution program from Hot Stuff Foods™ of Sioux Falls, SD, designed especially for small retail spaces. It is a fully contained self-service merchandising unit with easy on-site heating capabilities. It takes up less than four linear feet and even can be set up as an end cap. Over a dozen packaged items have been developed for the unit with more on the way.
"Now, no matter how much space a store has, we’ve created a legitimate option for merchandising and serving high-quality food items," says Hot Foods™ CEO Des Hague. The Mac’s Market™ program can be implemented immediately and be up and running for $1,000. Mac’s Market is only one of several foodservice options available from Hot Stuff.
Warmers have become popular. Stores can microwave or heat items and maintain them in a warmer for immediate eating.
"For some people the microwave is too slow," says Jeff Lenard, director of public affairs for the National Association of Convenience Stores.
Ordering food via electronic kiosks is another emerging trend.
The computer revolution has made many people, particularly the young, more comfortable in front of a screen than in front of a person, Lenard observes. And kiosks are popular with bilingual customers, especially if the screens are bilingual. Kiosks allow store workers to spend more time on the floor serving customers than taking orders.
According to Retail Forward’s Industry Outlook: CONVENIENCE STORES of January 2006, Sheetz plans to integrate electronic ordering at the pump at its stores after kiosks proved popular inside. This not only makes a customer’s time more productive but gets customers inside the store, a prime goal for c-stores.
Web-based ordering may be next, according to Lenard.
"Meeting the needs of time-starved consumers is more essential this year than last year," Lenard says. "Business models for c-stores continue to emerge. We have to be all things to all people, but above all we have to be fast or you can’t grab the customer that is critical to our group.
"An incredible amount of meals are eaten in the car," Lenard continues. "People are looking for fresh, value, new and fast. We certainly have a role in the fast and you can do all four if you’re really good."
What’s old is new
The trusty sandwich has become a popular c-store foodservice item. But not those anemic prepackaged sandwiches sitting forlornly in the cold case.
"We’re seeing an explosion in the form of sandwiches," says Don Montuori, editor of Packaged Facts, a market research company. "Hot, cold, freshly made, wraps, panninis, all different kinds and types are available. There are much better, more appetizing options for on-the-go foods. Retailers don’t have to rely on prepackaged."
Today’s sandwiches are likely to come out of a warmer and have a broader flavor profile. Even traditional sandwiches come with different breads and condiments.
"Manufacturers have been doing a great job in the last two years of offering better products and wrappings that keep sandwiches fresher and warmer," says George Eversman, director of retail channels for Dot Foods of Mt. Sterling, MI.
Execution has become easier, he adds. Retailers can microwave the sandwiches ahead of time and put them in the warmer. That reduces labor costs and effort.
Mono-dexterous
Eating while driving requires one free hand, a fact not wasted on c-store operators and those who supply them.
"A lot of our products are easy to eat with one hand," says Mike Elliott, vice president of sales and marketing for Don Miguel Mexican Foods of Anaheim, CA. "More and more, a lot of our sales are coming from roller grill products."
In addition to one hand eating, drive-time food can’t be messy. Don Miguel has a new chili cheese dog wrapped in a tortilla, lightly fried and placed in a bag that catches any overflow that might end up in the driver’s lap.
"It’s already become one of our largest selling items," Elliott reports.
Don Miguel is innovating to meet the demand for food to grab and go with an eye towards making food easy to handle and clean. Taquitos with a variety of fillings and a breakfast burrito are tasty options for c-stores that have added roller grills and warmers.
Sales of products for all meal segments are growing rapidly, says Elliott. They’ve seen an upsurge in breakfast sales, but lunch and even afternoon snack time is doing well.
"More and more people realize you can get high quality items at a c-store," Elliott observes.
Name recognition
"We think the way to go is with branded items," says Vicki Reilly, director of sales and marketing for White Castle Distributing.
Consumers know what they’re getting with branded items, particularly food items. C-store customers can get the familiar White Castle hamburgers, cheeseburgers, jalapeno burgers, chicken rings and sausage, egg and cheese breakfast sandwiches. New from White Castle is a breaded chicken fillet sandwich. The fact that consumers can get the same items in the c-store as in a White Castle restaurant works to everyone’s advantage, Reilly says. It raises consumer awareness of both the restaurants and the brand itself.
Forget supersizing. White Castle has always been known for its small sandwiches, a characteristic that provides an advantage for grab-and-go food.
"It’s very, very convenient," says Reilly. "It’s an excellent size for hand-held and there’s nothing dripping down your arm. Sandwiches come two to a package so a person can eat as much as they want."
With c-stores moving beyond coffee and donuts into more substantial breakfast items, the morning meal segment has taken on new importance and boosted sales.
White Castle’s c-store business has been growing steadily. Reilly expects that to continue even if a slowing economy prompts consumers to cut back on eating out. Restaurant dining may slack off, she says, but the forces driving the demand for grab and go foods remain strong.
Healthy and fast?
"There seems to be an inherent contradiction between "on the go" and eating healthy," NAC’s Lenard says. "But with fresher products and better ingredients, manufacturers are offering more healthy options."
Consumers not only are seeking to eat more healthy foods, but are more aware of what those foods are. Combine that with more sophisticated tastes and you have a market for Sabra, a line of Mediterranean dips and spreads. Now Sabra comes in individual 4.1-oz. containers ideal for those who want to grab a healthy snack. In addition to five varieties of hummus, there is sautéed eggplant and tuna salad. Originally paired with crackers in a clever two-tiered rounded container that fits a vehicle cupholder, Sabra now also comes with pretzel crisps.
"The hummus category is up 13 percent in supermarkets and Sabra accounts for 60 percent of that growth," reports John McGluckin, executive vice president of sales. "People are becoming more aware of hummus. Sabra is probably the perfect item for c-stores with its taste, health benefits and convenience. It fits very well on c-store refrigerated shelves and can play a nice part in food service development."
The packaging has been a big part of Sabra’s success, according to McGluckin. Kids love it and parents love the product because it’s healthful. No utensils are needed. It even makes a good lunch food.
Eating on the go shows no signs of flagging or even leveling off. The proliferation of tastier, healthier foods in wider and wider variety that can be offered with little muss or fuss makes food service an integral part of c-store operations.
"Food is a 20-year overnight success in c-stores," says Lenard.
Cecelia Blalock is a food industry writer based in Jessup, MD.
Sources
Don Miguel Mexican Foods (714) 634-8441
Dot Foods (217) 773-4411
Hot Stuff Foods™ (605) 336-6961
NACS (703) 684-3600
Packaged Facts (301) 468-3650
www.retailforward.com (614) 355-4002
Sabra (201) 439-1010
White Oak C-Mart (406) 857-2344
White Castle (614) 228-5781
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