C-STORES FIND NICHE WITH GRAB-AND-GO FOODS

CHRISTINA VEIDERS

Convenience chains are getting high marks for their efforts to capitalize on consumers' need for immediate food and beverage consumption.

"They're doing very well in terms of growing immediate consumption," said Bill Bishop, president, Willard Bishop Consulting, Barrington, Ill.

Among the chains he cited for their often proprietary fast-food offerings were:

Wawa, Wawa, Pa., a five-state regional chain of about 540 stores. The company has developed a popular built-to-order Hoagie program. In addition, Wawa Express items feature healthy choices, such as fresh-cut fruit and salads and premade food choices that include wraps made fresh daily. The company sells 125 million cups of its award-winning coffees each year in various flavors and specialties. The hot-breakfast offer is the Sizzli -- sausage, bacon, egg or cheese served on a choice of muffin, bagel or biscuit. Wawa also offers party platters for large gatherings at home or the office.

7-Eleven, Dallas, which operates or franchises approximately 5,800 stores in the United States and Canada. According to Bishop, 7-Eleven's Big Eat's deli sandwiches are "several notches above what they have historically been, and they are being well received."

The company also has World Oven doughnuts, cookies and muffins. This summer, 7-Eleven introduced its first line of Big Eats Griller sausages, developed exclusively for the convenience chain by Oscar Mayer. The Big Eats Griller sausages complement its Big Bite hot dogs, introduced in 1988 as part of an exclusive agreement with Oscar Mayer. The company also is trying to cash in on the coffeehouse/Starbucks phenomena with the introduction this year of a hot-beverage bar where drinks can be customized with new coffee flavors, creamers, cocoa, cappuccino, toppings, flavor syrups, steamed milk and sweeteners.

"Our goal was to recreate a coffeehouse experience and selection with two key distinctions," Kris Nelson, category manager for coffee, said in a company statement. Those distinctions are fast self-service, and drinks that sell for around $1, vs. coffeehouse prices of $3 to $4.

Sheetz, Altoona, Pa., a privately held, regional C-store company with about 280 stores in five states. The company's motto is "Not fast food. Better food fast." Through Sheetz's proprietary touchscreen food-ordering system, customers can make not only fresh-food choices quickly, but can customize their order to taste and size, and watch their meal being prepared by trained kitchen staff.

ExxonMobil, Irving, Texas, which launched a new C-store format, On The Run, last year. The 4,000-square-foot stores offer a wide variety of products, and feature an On The Run Cafe. "Our decision to introduce our own food service for the On The Run Cafe was motivated by our commitment to deliver consistently high quality [and] fresh foods to customers," said Hal Cramer, president of ExxonMobil Fuels Marketing Co., at the time of the launch. The company also expanded its innovative Speedpass payment system to purchases made in-store.

Bishop noted that ExxonMobil is about to experiment with dollar sections in its C-stores.

The convenience sector has been challenged by the number of alternative players -- many of them supermarkets -- who have entered the gasoline business, and launched their own C-store formats (see "Top Non-Traditional Formats in Gasoline Business," Page 16). Just last month, Publix Super Markets, Lakeland, Fla., announced it would test two new Florida locations as fuel sites hosted by a 160-foot building where customers pay for gasoline through a window. Convenience items sold at these locations will be limited to cigarettes, ice cream, candy, gum, chips and other snacks. Publix's other gas-convenience locations range in size from 1,200 square feet to 4,000 square feet.

C-stores are vulnerable to these alternative players because they can cut into the number of fueling stops to the traditional C-store, said Bishop.

To counteract this threat, some C-stores have turned to loyalty programs; others have gotten more aggressive with food. White Hen Pantry in Chicago, for example, is selling a gallon of milk as a loss leader, said Bishop. "It's probably the best price for milk in and out of Chicago," he said. Kwik Trip, La Crosse, Wis., has added fresh produce. According to Bishop, the C-store operator is selling bananas for 29 cents per pound. "That's an extraordinarily aggressive price."

C-store operators are not so much reacting to the competition, said Bishop, as they are to consumers. "Consumers are undeniably moving away from the supermarket. You can see it in the growth of warehouse clubs and other alternatives. Each one, including convenience stores, are jostling for a position at this new table set. Convenience-store operators seem to have pretty good ideas on their niche and how to take advantage of it," he added.