Convenience Stores: A Growing Segment of Foodservice

convenience stores

Say hello to a growing segment of foodservice: they are called convenience stores and they recently held their meeting and trade show in Chicago. Greg Trotter, of the Chicago Tribune, penned an interesting and informative article dealing with their show and future.

Fred G. Sampson
Fred G. Sampson

His opening comments give you some idea where this competitive group is headed: “Long known as late-night outposts of roller hot dogs and greasy pizza, convenience stores now also want to sell you healthier food, preferably lots of it. This shift in the $550 billion industry was on display at the National Association of Convenience Stores trade show in Chicago this month, a massive and labyrinthine convention of grab-and-go commerce. What began as a few bananas by the cash register is now a full-blown movement aimed at selling healthier fare to consumers and millennials, in particular.”

While this segment does not pose any real threat to fine dining, “There are practical reasons for this change: Sales of pop, cigarettes and fuel—longtime pillars of the convenience store business—are in decline. And the rise of e-commerce threatens all bricks-and-mortar retail.”

It seems ironic that in this same time period, the cover of Nation’s Restaurant News (Nov. 17) stated: “The Snack Revolution: Smaller bites edge out traditional meals ….” I’m not suggesting that convenience stores have risen to the level of casual dining, but rather, it confirms the fact that eating habits are changing.

“Snacking may very well be the greatest Modern American pastime,” according to Bret Thorn of NRN. Snacks accounted for 19 percent of all foodservice occasions in 2016, according to research and analysis by the Coca-Cola Co. That company’s senior manager for national foodservice strategy, Christine Kortschak, said, “Snacking is a $56 billion sales opportunity in restaurants and retail foodservice. And unlike breakfast, lunch, and dinner dayparts, when traffic is fairly stagnant, snacking is growing by 7 percent.”

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There are about 150,000 convenience stores throughout the United States; 63 percent are independents. One of the more popular is the Wawa Group. They presently have 750 stores and are primarily located along the East Coast. They have an extensive foodservice program and market it well.

The largest international company is 7-Eleven, with 60,911 units and sales of $18 billion. It is headquartered in Tokyo, Japan.

The world’s largest retail convenience store is neither small nor limited, with 67,000 square feet of retail space. Buc-ee’s in New Braunfels, Texas, is acknowledged as the world’s largest convenience store. You could fit 22 average 7-Eleven stores in one Buc-ee’s. Besides the 60 gas pumps, the following are included: 18 acres, 250 employees, 1,000 parking spaces, open 24/7, 31 cash registers, four ice machines, and 80 soda fountain dispensers. It offers gourmet foods and locally produced sauces. And they were voted, by Cintas in 2012, as having the best restrooms in America.

The company is now considering placing a similar or even larger operation off Interstate 95 between Jacksonville and St. Augustine, Florida, with 150 pumps, as well as at additional locations throughout the country.

I do not think they will be another McDonald’s, but it does demonstrate that this company is serious about attracting America’s motorists and they are willing to invest heavily in the future—not only by selling souvenirs and fuel, but by offering quality food as well.

Back to the trade show in Chicago: Hillshire Brands introduced “Small Plates with contents such as apple chardonnay flavored pork and gouda cheese.”

Also, “Some convenience stores are taking the foodie movement beyond packaged foods. ‘The Pride Stores, with 12 locations in the Chicago area, has in recent years hired a corporate chef and incorporated different restaurant concepts, like Urban Counter and Taco Urbano, into some of its stores, where shoppers can sit down and eat or carry out their orders,’ said Mario Spina, owner of the chain.

“Last year the convenience store industry saw fuel sales tank 9.2 percent—from $349 billion in 2015 to $316.8 billion in 2016, according to data from the National Association of Convenience Stores. Meanwhile, inside-store sales increased 3.2 percent, from $ 225.8 billion to $233 billion, with strong growth in healthier food and beverages, according to the trade group. … And while the healthier fare will get more shelf space, the more indulgent items will continue to have their place for Americans on the go” … and as electric cars become more plentiful, gas sales will drop.

I’m very much aware of the fact that convenience stores were never designed to emulate foodservice facilities; neither were supermarkets, but as I have said many times, the American consumer is demanding and inquisitive, and satisfying them is an ongoing challenge. We must deal with it or leave the stage.

Fred G. Sampson
Fred G. Sampson is the retired President Emeritus of the New York State Restaurant Association. He began working with NYSRA in 1961. Within the next four years the NYSRA more than tripled its membership and expanded from one regional chapter to eight. Sampson played roles in representing restaurants on issues including paid sick leave, minimum wage, liquor laws, a state-wide alcohol training program and insurance plans. Comments may be sent to fredgsampson@juno.com