The Time’s Right to Take Your Foodservice Operation to the Next Level
Three emerging trends – rising prices and slowing sales at restaurants, more millennials juggling work and family obligations, and the normalization of frequent snacking – are creating a need for hot, high-quality, grab-and-go food options beyond restaurants.
What’s driving these trends? First, because their costs have been increasing, restaurants have been forced to raise prices significantly during the past 18 months. At the same time, retail food prices have been declining. The price differential is leading Americans to eat more meals at home, and restaurants have suffered. According to NACS, same-store sales growth for 2016 was -1.1%, the poorest industry performance since the recession.
Second, the perception of millennials as carefree twenty-somethings no longer holds. The oldest millennials will start turning 40 in 2018, and many of them are entering prime family-raising years, adding more tasks to their already hectic schedules and on-the-go-lifestyles. Finding the time to fit in occasions for healthy, high-quality eating will be increasingly challenging.
Finally, snacking: It’s become a mega-trend. According to Technomic, 51% of Americans snack twice a day, and 31% snack more frequently than they were just two years ago, blurring the lines between traditional foodservice dayparts and slow periods.
In this environment, consumers are looking to c-stores to meet the need for hot, high-quality, grab-and-go food options. A 2016 Technomic study showed that, for example, almost half (49%) of consumers would be likely to purchase chicken strips, nuggets or wings at c-stores at least occasionally for dinner. And c-stores are responding. Foodservice has become the most profitable section inside the store, and operators, especially chains, are expanding and upgrading their foodservice operations. We’ve come a long way from roller-dogs and soft pretzels.
And the bar continues to rise. With c-stores beginning to look more like restaurants, simply offering an expanded line of hot food is becoming less of a differentiator than it was even two years ago. Consumers expect to find high-quality hot food everywhere they go, including grocery stores (“groceraunts”), sports and entertainment venues, and c-stores.
Savvy c-store operators are going to the next level, by offering fresh foods and branded foods that consumers already know and love. According to Market Force Information, c-stores need these programs in order to have a unique value proposition in a fiercely competitive environment: “With drivers having so many options to choose from, gas stations and c-stores must excel in areas beyond price, such as offering specialty foods to attract loyal, repeat customers.” In offering craveable, quality hot-food items that are familiar to consumers, c-stores can distinguish themselves – and be positioned to take advantage of the latest foodservice trends.