Study: Convenience stores seeing payoff from improved foodservice quality

Supermarkets looking to boost their meals and prepared foods business might want to take a cue from convenience stores.

New research from Acosta Group shows that higher-quality foodservice at c-stores is paying off in increased customer trips. Of roughly 1,300 consumers polled who had shopped in a c-store within the previous six months, 52% said they shop these stores once or more weekly. What’s more, 30% reported making more trips to c-stores than they did last year.

Their chief reason for going to a c-store? To buy food and beverages, according to Acosta Group’s 2023 Convenience Store Shopper Insights Study, findings of which were released Thursday.

“For a vast majority of c-store shoppers—92%—food and drink purchases are the primary purpose of the trip,” Kathy Risch, senior vice president of thought leadership and shopper insights at Jacksonville, Florida-based Acosta Group.  

Grocery stores nationwide have upped the foodservice ante in recent years, especially after the pandemic to better compete with restaurants. But so have convenience stores, who continue to cut into market share for both.

Of shoppers surveyed by Acosta Group, 45% said they buy hot foods from c-stores at least once weekly. Their top choices: sandwiches, breakfast foods and pizza.

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More important, perhaps, 51% of customers rated hot food items from c-stores as just as good as that of fast-food or quick-service restaurants—and often at a better price, Acosta Group noted.

“There’s no doubt that high-quality foodservice is one of the key drivers behind increased trips this year,” Risch commented.

Shoppers go to convenience stores over other retail formats for their convenience and fast-trip experience, according to Acosta Group’s research. Snacks, candy, baked goods and cold beverages are the most frequently purchased items. Customers also are buying non-food items like tobacco products, scratch-off lottery tickets and various general merchandise.

The study said items shopped more exclusively at c-stores include meat snacks and store-made hot foods. And with the latter becoming a growing draw for c-stores, there has been consumer interest in adding gourmet foods such as cheeses, coffee/tea and craft beers.

“We have the opportunity to explore expanding foodservice options within the convenience channel,” stated D.J. White, senior VP of corporate distribution for CORE Foodservice, an Acosta Group agency. “We see retailers moving to more sophisticated offerings, reflective of evolving consumer preferences.”

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For most customers, c-stores’ in-store experience meets their expectations in terms of product availability, shelf organization, customer service and cleanliness, Acosta Group found. Still, three of four shoppers think c-stores have good product availability but have mixed views on pricing and value, with price driving channel leakage to grocery and mass retailers.

“The c-store channel is absolutely on a growth path,” according to Hobie Walker, SVP, Small Format, Acosta, an Acosta Group agency. “Today, 30% of these shoppers are buying their snacks, candy, and beverages nearly exclusively in c-store, reflecting the importance of in-stock positions with the right products at the right price.

Fifty-eight percent of convenience store shopping is done in the afternoon, and 78% of these customers are buying snacks rather than full meals at this time to eat their food on the go, Acosta Group reported.

Two key c-store shopper segments are blue-collar professionals and Millennials. The former are more frequent c-store customers and bigger purchasers of meals. Twenty-three percent of blue-collar professionals shop c-stores daily (versus 11% among all channel shoppers). Also among blue-collar professionals, 70% are grabbing a snack on the way to, during or from work; 58% are buying lunch; 48% are purchasing dinner; and 42% are eating in-store.

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Millennials also are frequent c-store customers, more likely to shop these outlets weekly “if not every day,” Acosta Group said. Yet their primary purchase is snacks—36% on the way to, during or from work and 32% back and forth from school—and 53% shop c-stores in the evening.

“This study informs us that in-store food, both CPG and foodservice, will be more important than ever to ongoing channel sales,” Walker added.

In addition, younger convenience store shoppers show greater use of loyalty programs, Acosta Group’s study showed, with 82% of Millennials and 60% of Gen Z having memberships. Overall on the digital front, 48% of c-store shoppers subscribe to retailers’ apps to earn rewards points and find out about specials and recommendations, a number jumps to 85% for Millennials.