Consumer Trends

Cost-conscious consumers trade down from restaurants to c-stores

As menu prices rise at fast-food restaurants, customers are looking to convenience stores for meal deals.
C-store fresh food case
C-stores are offering fresh options and good value to lure consumers away from restaurants. | Photo: Shutterstock

Dining-out traffic is down as consumers look to control their spending as high prices persist. In addition, unease about the economy also has consumers seeking deals.

But, according to Donna Hood Crecca, principal at Technomic, consumers still are looking for food outside the home. And, even though customers notice higher prices on prepared food and beverages at convenience stores as well as at restaurants, there’s still an avenue for c-stores to grab market share—because customers are less likely to reduce c-store visits than restaurant visits due to higher prices.

According to a recent Technomic C-Store Consumer Market Brief, 54% of c-store patrons say they’re reducing visits to restaurants because of higher menu prices, but only 30% of c-store patrons say they are purchasing foodservice items from c-stores less often.

“One reason the majority are staying engaged with c-store foodservice is they find value in the offering,” Crecca told Restaurant Business sister brand, CSP, in a recent interview. “Our data shows that nearly seven in 10 consumers are satisfied with the value of c-store foodservice, with satisfaction highest for beverages, including self-serve and made-to-order hot and cold offerings, as well as roller grill, made-to-order food items and the cold case.”

Technomic’s consumer insights reveal that higher restaurant prices are spurring many to cook at home or to reduce overall restaurant visitation. Bureau of Labor Statistics data below shows food away from home inflation (menu prices) keeps trending higher than food at home prices (grocery store).

“With restaurant traffic softening, it’s a take-share environment,” Crecca said. “For restaurants to grow sales, they need to win occasions/spend from other restaurants, and we expect to see some trading down, such as fast-casual customers shifting some occasions to fast food.”

It is here where c-stores might benefit from fast-food consumers shifting occasions to c-stores, Crecca said.

“Essentially, the growth opportunity for c-store foodservice is to take share from fast food,”  said, adding she expects this trend to persist well into 2024.

Strategies c-stores can implement to take share include menu innovation, such as showcasing trending flavors and formats, especially for breakfast items, snack items and all beverage types.

“Seasonal flavors always gain consumer attention, and we also see demand for global flavors,” Crecca said. “For example, more than 50% of consumers are looking for global flavors in breakfast items at c-stores.”

Other strategies, according to Technomic:

  • Strategic combo meals with a unique, signature, seasonal or otherwise “special” entree to heighten the value perception and differentiate the offer.
  • Indulgent warm sandwiches/handhelds, including meat on meat, which is trending (such as pulled pork on a burger, which Wawa currently offers). “Chicken sandwiches continue to attract consumers, as well as unique carriers like pretzel buns or ciabatta rolls or breakfast sandwiches on croissants,” Crecca said.
  • Fast-food restaurants are embracing frozen beverages, “so c-store operators need to do a bit of blocking and tackling here,” Crecca said. “I recommend leaning in on supplier partners to bring innovative flavors, colors and attributes like energy, etc., to elevate a c-store’s ability to compete.” QuickChek, for example, recently teamed with Prime Energy on a zero-sugar frozen beverage.
  • Strategic promotions that reward consumers, such as ones geared around a fuel purchase. “A fuel discount with a foodservice purchase differentiates c-stores from fast food and showcases the multitasking benefits of c-stores,” Crecca said.
  • Finally, combo meals and a fuel discount with a foodservice purchase are the top two promotions that increase foodservice purchases, according to Technomic research.

“It’s important to showcase value beyond price,” she said. “Consumers today find value in attributes like fresh, quality, taste, uniqueness, brand and portion sizes.”

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