As readers of these pages likely know by now, the convenience store has become increasingly competitive with traditional fast-food restaurants.
Consumers are starting to get it, too.
A growing percentage of consumers now believe that convenience stores are a viable alternative to fast-food restaurants, according to the 2024 Convenience Store Trends Report from Intouch Insight.
According to the report, 56% of consumers surveyed say they believe a convenience store is a viable alternative to fast-food restaurants.
That’s up from 45% a year ago.
Why the change? Perhaps value is one such reason: Sixty-two percent of consumers said they believe convenience-store fare is a good value for the money.
That stands in direct contrast to some prior reports on the fast-food business indicating that a lot of consumers now consider fast food to be a “luxury.”
Convenience stores have for years been pushing into the prepared food world. Less able to depend on sales of traditional convenience-store items such as cigarettes, the chains have been focused more on competing for the customer who just wants a quick meal on their way to work.
As my colleague Heather Lalley has reported, attending a convenience-store exhibition these days is little different from wandering the floor at the National Restaurant Show—though replace the robot bartenders with tobacco products.
Concepts like Wawa, Sheetz, Kwik Trip and Buc-ee’s have long pushed better and better food. Casey’s is one of the biggest pizza sellers in the country and 7-Eleven has a growing Tex-Mex concept called Laredo Taco Company. Convenience-store competition with the fast-food world is nothing new.
But the survey results from Intouch suggest they’ve gained ground as consumers grew concerned about value.
Same-store sales at traditional fast-food restaurants have been underperforming the broader industry all year and that worsened last quarter, as we wrote about yesterday.
Quick-service restaurants are traditionally the beneficiaries of economies like this, as budget conscious consumers shift to cheaper options. But customers aren’t shifting down to fast food from casual dining like they used to, but lower-income customers of fast food have been shifting out altogether, and one such option they have is the convenience store.
Fast-food restaurants’ shift to value over the summer could help to shift at least some of them back, and convenience stores have been responding with their own value offers, such as 7-Eleven’s own $5 Meal Deal.
But convenience store operators are already saying it’s difficult to compete with fast-food restaurants on pricing.
All that said, price in and of itself is not a motivating factor behind consumer use of convenience stores—only 6% of them said that price motivated them to make the purchase. Convenience, at 61%, remains the top, motivating factor.
The simple fact is, when you’re already stopping at a convenience store to get gas—and 83% of convenience-store shoppers get gas—it’s easy to stop in for some roller grill taquitos.
If consumers don’t think your fast-food restaurant is worth the extra trip, they will look for something else.
All of which puts pressure on fast-food chains not only to maintain some price discipline, but to make sure they’re getting consumers enthused about coming in, and to do their jobs well once they do so. Because while a $5 meal offer at a fast-food restaurant might get them in once, if the store is dirty or the drive-thru takes too long they’ll just get a burrito at the gas station next time.