Home Money & Business Business Can US convenience stores unlock the key to improved food sales?

Can US convenience stores unlock the key to improved food sales?

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Can US convenience stores unlock the key to improved food sales?

NEW YORK — For those who typically associate gas stations and convenience stores with stale hot dogs and frozen burritos, prepare for a shift in expectations during your next road trip. U.S. convenience stores are ramping up their offerings, presenting consumers with a wider variety of food options—though they may not always be the healthiest.

From major chains like 7-Eleven to regional favorites such as QuikTrip, c-store operators are taking cues from international markets to revamp their food selections. Many locations are introducing sit-down seating, expanding coffee choices to compete with chains like Starbucks, and even experimenting with made-to-order meals aimed at busy families.

These enhancements come in response to a decline in traditional sales of cigarettes, maps, and sodas. By presenting options such as fresh deli sandwiches and customizable burgers, convenience stores are vying to be seen as convenient alternatives to fast-food joints for Americans in pursuit of easy, interesting, and budget-friendly meal options.

“It has been a decades-long journey from food that was seen as desperation to food that feels like a destination,” explained Jeff Lenard, vice president of strategic industry initiatives for the National Association of Convenience Stores.

Traditionally focused on breakfast and lunch, convenience chains like Wawa, which boasts over 1,000 locations on the East Coast, have begun offering dinner items such as soups, chicken, and fish dishes. Similarly, Rutter’s, a smaller chain based in Pennsylvania, is unveiling new location formats with enhanced seating as it plans to open 50 additional outlets over the next five years.

Casey’s General Stores, ranked as the third-largest convenience store chain with 2,500 locations mainly in the Midwest and South, has recently introduced warm chicken, pork, and hamburger sandwiches served on brioche-style buns. Known for its popular pizza, the chain has rolled out a limited-time menu that includes items like barbecue pork sliders and unique pies.

“We treat this operation like a restaurant, perhaps even more so now,” noted Carrie Stojack, the chain’s vice president of brand and strategic insights. “Given the rising prices, convenience stores are emerging as a viable option for our consumers.”

In line with this strategy, convenience stores are expanding their delivery services, a trend that gained traction during the COVID-19 pandemic. 7-Eleven is set to make its 7Now delivery app available nationwide, enabling customers to have items like pizza and Slurpees delivered straight to their doors.

The largest convenience store chain in the country, owned by Japan’s Seven & i Holdings, is now offering select Japanese food items such as teriyaki chicken, rice balls, miso ramen, and sweet chili wings at various U.S. locations, including those recently acquired from Speedway and Stripes. Visitors to Japan and Hawaii have often expressed astonishment at the vast selection available at 7-Eleven locations.

The North American branch of the chain stated that it partners with various food manufacturers to deliver fresh offerings tailored to regional preferences. As part of that commitment, the company introduced innovative items like mangonada donuts and chicken curry bowls.

However, earlier this month, Seven & i Holdings revealed plans to shutter 444 U.S. locations due to declining sales, inflationary challenges, and a continued drop in cigarette purchases. The company is also considering a buyout proposal from Canadian firm Alimentation Couche-Tard, which owns Circle K convenience stores.

The rise of appealing food options at convenience stores isn’t entirely new and varies significantly by region. For instance, Buc-ee’s, a Texas-based chain with 50 establishments throughout the South, enjoys a devoted following for its breakfast tacos and unique snacks like caramel-coated corn puffs, affectionately dubbed Beaver Nuggets.

In Pennsylvania, residents engage in friendly debates about the culinary superiority of offerings from Wawa, Sheetz, and Landhope Farms, the latter being particularly known for its hand-dipped ice cream cones and milkshakes.

Social media platforms like TikTok and YouTube have played a role in spotlighting convenience store food, with creators posting videos about their experiences, thus generating interest in this sector.

Anderson Nguyen, 26, a TikTok creator based in San Francisco, sampled the chicken and mac and cheese from Krispy Krunchy Chicken, which is found primarily inside gas stations and convenience stores. “I typically don’t purchase much from these stores,” he admitted, “but this experience might just change my mind.”

During the pandemic, convenience stores filled a crucial niche as many restaurants closed, leaving them open for business. According to data from approximately 20,000 locations analyzed by the National Association of Convenience Stores, non-fuel sales at U.S. convenience stores surged 36% from pre-pandemic levels in 2018 to nearly $328 billion last year. Meanwhile, cigarettes accounted for a diminishing share of those sales, decreasing from 31% to 20%.

As these stores enhance their food offerings, they pose a significant challenge to fast-food establishments like McDonald’s and Wendy’s, especially as food prices have increased. Retail consultancy Merchandise Food LLC conducted a comparison of similar items at fast-food restaurants and convenience stores, discovering that store food often comes at lower prices.

For instance, at a Casey’s in London, Ohio, a large pepperoni pizza costs $13.99, while a comparable order at Domino’s runs $14.99. Similarly, a large coffee at Parker’s Kitchen in Savannah, Georgia, retails for $2.49, compared to $3.48 at a local Starbucks.

Virginia-based Arko, which operates stores under names like 1-Stop and ExpressStop, aims to position itself as a cost-effective alternative. Earlier this year, the chain introduced what it describes as an “inflation-busting” 12-inch pizza, priced at $4.99 for loyalty program members and $7.99 for everyone else.

“It took significant effort to develop a product that balances quality and affordability,” said Arko Corp. CEO Arie Kotler.

Nutritionists and organizations such as the American Heart Association encourage convenience store retailers to focus on healthier options, incorporating fruits and fresh foods into their menus. Kristen Lorenz, a registered dietitian, noted that many stores have added nourishing items like yogurt parfaits and lettuce wraps, improving upon the previous offerings that included dried-out prepared foods.

Among her top recommendations are the customizable sandwiches available at Sheetz and Wawa. “Everyone needs to fuel their vehicles and satisfy their hunger,” she remarked. “Providing a range of healthy choices is beneficial, and what’s fantastic is that these establishments still offer traditional options that add to the road trip experience, like a small bag of chips.”