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Editor's Blog Industry Updates

C-stores Shed Reputation as Places to go to Eat When There Were no Other Places to go

These ARE NOT sandwiches from Subway or Firehouse Subs. They are from Wawa, an East Coast convenience store chain.

Some of us wondered who really ate that stuff — the yukky food that convenience stores once sold. Besides, the stuff was being sold by gas stations, what we considered “convenience stores” to be, categorically.

But that was at least a decade ago. Slowly, c-stores have shed their reps for the places to go when there were no other places go for a bite. Now people are pulling in to convenience stores to buy hamburgers, fried chicken, tacos, gyros and even Indian food — and they’re not even getting gas!

C-stores haven’t upgraded the selection or quality of their food by accident. It took best practices — business processes that didn’t previously didn’t exist when consumers went to them only to buy Cokes and smokes … and fuel, of course.

Today’s c-stores are hiring culinary specialists and dedicating more space to stores to house new and better equipment, not to mention seating for their customers. According to NACS, the size of new stores has increased to 4,991 in rural locations and 4,603 square feet in urban locations from the average store size of 3,230 square feet.

CNN.com recently ran a story touting America’s new favorite restaurants as Wawa, Sheetz and 7-Eleven. That may be stretching it, but CNN gets the point across in its story that c-stores are offering food fare to be reckoned with.

“It has absolutely been a hidden gem,” Jeff Williams, senior vice president of retail services at market researcher Nielsen, told CNN about c-store food. “They are demanding that consumers view them as a destination for food.”

And for good reason. Wawa, Pa.-based Wawa offers sourdough melts, flatbread sandwiches, burritos and more. Altoona, Pa.-based Sheetz touts that it offers made-to-order fresh food “24/7/365.” Other chains like 7-Eleven have introduced energy drinks, grab-and-go foods and even wine under their own private labels.

Many c-stores are differentiating themselves with their offerings and have even become a destination for some consumers who realize they can’t buy such fare anywhere else.

If c-stores seem to be everywhere, well … that’s because they might be. There were only about 5,000 of them in 1965, but today there are more than 153,000, with 7-Eleven leading the way (with about U.S. 9,000 stores.) There are more c-stores in the United States than grocery stores, drug stores and dollar stores combined.

According to the National Association of Convenience Stores (NACS), c-stores experienced a 16th straight year of record in-store sales in 2018, with an increase of 2.2 percent to a record $242.2 billion. Foodservice sales accounted for 22.6 percent of in-store sales, a category that continues to be a key focus area for the channel, according to NACS. The association defines “foodservice” as a broad category that mostly encompasses prepared foods as well as commissary foods, and hot, cold and frozen dispensed beverages. I’ll bet you a walking taco from Sheetz that those numbers keep rising next year, the following year and the year after that.

The retail food industry has never been more competitive. And because people continue to be pressed for time and aren’t sitting down for dinner, c-stores will continue to reap the benefits — considering they don’t go back to peddling hot dogs that have been turning on a rotisserie grill for six hours.

However, all the solid growth comes with a cost, which has led to higher direct store operating expenses for convenience stores, according to NACs. “The cost of growth, whether it’s higher acquisition multiples, new store construction or retrofitting older sites, has never been higher in our industry,” said Andy Jones, NACS vice chairman of research and CEO of Sprint Food Stores Inc. in Augusta, Ga. “These are business trends that convenience retailers should be prepared to address as they continue evolving and growing their businesses.”

You know what that means: More best practices, please.


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