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Consumer Trends

The threat from c-stores gets real

food service retail

To restaurants still dismissing c-store food as roller dogs and gas station coffee, prepare to get rolled. The clear and present threat for restaurants isn’t just that retailers are stepping up their foodservice game. The real alarm: Consumers are along for the ride.

Two out of three millennials—and 56% of all consumers—agree with the statement: “Convenience stores are just as capable as restaurants in offering fresh food and beverages,” Technomic’s Consumer Brand Metrics research finds. While it may be the promise of speed, convenience and value that are getting customers in the door at supermarkets and c-stores, they’re increasingly staying for the food—especially breakfast and snacks.

“A huge number of customers stop in the c-store during lunch for their beverage and then go across the street to get the rest of their meal,” said Abbie Westra, director of retail content for Restaurant Business’ sister publication CSP, at its Convenience Retailing University conference. “If c-stores can transition them into being foodservice customers, that helps the whole rest of the store.”

The good news for restaurants is that they’re still leading in the foodservice race. But to avoid the fate of the proverbial hare, operators might want to focus on a few areas to stay ahead.

Differentiation is crucial

Today, consumers consider foodservice as coming from everywhere. C-stores such as Sheetz are redefining themselves as “convenience restaurants,” forgoing fuel for made-to-order meals and beer. Retailers like Amazon and Walmart are pushing the idea further with pilot stores that let customers fill up their grocery carts, gas tanks and stomachs without ever exchanging money or even leaving the car.

Play up the experience

While retailers are getting measurably better at improving the look and convenience of their stores, restaurants have experience on their side when it comes to delivering hospitality and service.
Fight with food.

Restaurants still outbox retailers when it comes to visual appeal, freshness and flavor. C-stores are gaining ground, but in consumers’ eyes, food at LSRs rates higher on factors such as taste (62% vs. 43%), quality (59% vs. 40%), craveability (47% to 34%) and attractiveness (55% to 41%).

Strategize across mealparts

Consumers find retail equal to restaurants in delivering quality beverages. To compete, restaurants can borrow from the freshness edge they enjoy in the food space by marketing limited-time and seasonal offers for coffee and other drinks.

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