Where did the nation’s fast-food customers go last year when they opted against the drive-thru? One bet: They went to the gas station.
Foodservice sales, most of which is prepared food, accounted for 28.7% of in-store sales at convenience stores last year, according to the National Association of Convenience Stores, or NACS.
They represent a bigger chunk of their profits: Foodservice sales accounted for nearly 40% of in-store gross margin dollars.
Prepared food accounted for more than two-thirds of convenience stores’ foodservice sales last year.
Convenience-store chains, including giants like 7-Eleven and Casey’s or more regional operations such as the Lake Jackson, Texas-based Buc-ee’s and the Pennsylvania-based Wawa, have focused more intently on prepared foods over the past two decades.
That focus, which has included everything from the opening of drive-thrus to the creation of pizza delivery operations, has made foodservice a huge part of the convenience-store business. In 2004, according to NACS, foodservice represented just 12% of in-store sales at convenience stores, meaning foodservice sales have more than doubled in just more than two decades.
Convenience stores are a key competitor to fast-food chains in particular, given the two industries’ focus on convenience-oriented consumers on their way to work or home or on a road trip.
Fast-food chains in 2024 struggled to generate traffic largely because of concern over rising menu prices, which could have helped fuel more growth. But as quick-service chains launched a price war last year, many convenience stores joined the fray. Wawa, for instance, is marketing a $2 $4 $6 menu. 7-Eleven is advertising five mini chicken quesadillas for $2.50.
Beverages in particular are important to convenience stores. More than 80% of convenience-store shoppers consume their beverage within an hour of their purchase, according to NACS.
For convenience stores, foodservice has helped fill the void left by declining sales of gasoline. According to NACS, strong foodservice and merchandise sales in the second half of the year drove in-store sales to a record $335.5 billion last year, up 2.4% and the 22nd straight year of record in-store sales at convenience stores.
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