The CEO of 7-Eleven could have boasted about the inroads his chain has made into a market that was once owned by attendees of the Restaurant Leadership Conference. Joe DePinto certainly had the sales numbers to support a little braggadocio: $2.7 billion from fresh food, $5 billion from beverages, 1 million cups of coffee, 100 million fountain drinks.
Instead, he stressed during his keynote address that the expanding foodservice market isn’t about 7-Eleven or convenience stores, or any other retailer with an eye on restaurants’ turf; it’s about an evolutionary change that is affecting all food sellers, and the smart ones are evolving along with it.
“Since 2008, we have seen consumer behavior change,” said DePinto, who also serves on the board of Brinker International, parent of the Chili’s chain. “Customers are looking for better value, better quality. … Their expectations are going up.”
At the same time, consumers have changed their eating habits, moving from three meals a day to four or five, looking for snacks to consume throughout the day.
“Our economy has shifted from a sellers’ market, where we could produce a product, charge what we feel was fair for it and the consumer would pay it,” DePinto said, “to a buyers’ market, where they can dictate what they buy and how they pay for it.”
DePinto, whose 7-Eleven is the largest convenience-store chain in North America and part of the largest chain in the world, name-checked Walgreens, Whole Foods, Walmart and Dollar General as retail chains from various channels that are encroaching on traditional foodservice and grab-and-go retailers.
“Things have changed and channels have blurred,” he said. “We believe the center of the battleground between retailers, restaurants and others will be food and beverages.”
Why the change? It’s a matter of the economy, and also of how consumers shop today, DePinto explained. Many are content to make purchases via the Internet, with the products delivered to the consumer’s door. While that’s stolen the thunder in electronics, clothing and other categories, ready-to-eat remains a brick-and-mortar business.
“As more shopping is moving online, retailers are flocking to areas that are defendable from [online shopping],” DePinto said. “It’s difficult for an e-retailer to sell a hot morning cup of coffee, or a fresh breakfast sandwich, or, in our case, a Slurpee.
“We are working hard to hear the customer and change as quickly as they are,” he concluded. “We truly are becoming a destination for ‘snackables.’ ” And in this case, “snackables” equal a meal.