It has become increasingly difficult for convenience stores to compete with and steal share from quick-service restaurants (QSRs).
This news comes from Donna Hood Crecca, principal at RB sister research arm Technomic, Chicago, during a recent webinar on c-store foodservice.
Winning more occasions from fast-food restaurants “has become more difficult in the past couple of months because of all the value offerings that are out there,” Crecca said.
Recent Technomic data shows how c-store operators are thinking about QSRs:
- 61% identify QSRs as competitors to their foodservice program
- Within that 61%, 97% say their foodservice program is in direct competition with QSRs, and 53% say competition with QSRs increased in the last six months
These last six months, Crecca added, “is the period in which fast-food operators really started putting out the aggressive value meal deals to stem the tide of slowing traffic in that segment.”
Among c-store operators who consider their foodservice programs to be in direct competition with QSRs, three-quarters said they are specifically concerned about McDonald’s value meal offerings on their own traffic and sales for foodservice, “and of course that has implications for the broader store,” she said.
Wendy’s and Burger King also have value meal deals that are “concerning,” Crecca added.
Strategy surge
While c-stores have always offered combo meals, they have now become more strategic in promoting their foodservice offers, Crecca said.
To combat QSR value deals, convenience stores should:
- Offer more promotions and deals
- Offer their own value meals/deals
- Implement new menu item and pricing options for value meals
- Increase marketing for value/combo meals
“We’re seeing kind of a full-court press from some of the leading c-store operators,” she said.
For example, EG America’s Cumberland Farms had a limited-time $5 Meal deal, she said, that “allows the consumer to kind of choose their own adventure. They can do two roller grill items or two slices of pizza, along with a packaged beverage and chips. And they also recently added a breakfast sandwich value meal deal—so they’re going after different dayparts.”
EG America, based in Westborough, Massachusetts, also offered two doughnuts and a large hot or iced coffee for $4 for a limited time.
Laval, Quebec-based Circle K also is taking this tiered approach, with $3, $4 and $5 offerings, she said.
David Hall, vice president of global foodservice at Circle K, explained the chain’s strategy. “As customers continue to feel the strain of higher prices on their everyday purchases, we are looking to drive value for them, partnering with our suppliers to bring some great deals where they can enjoy great-tasting meals, quickly and easily at great prices,” Hall told CSP.
That partnership involves working with key suppliers and linking and identifying, for example, “affinities between a breakfast product and an energy drink,” Hall said. “There are opportunities with the supplier, where there’s growth for them in a daypart, as well as for us that when we can bring these right meal deals together, it drives incrementality more for their businesses as well as ours.
“It’s working with them and understanding what their needs are, what the data says, to then create these meal deals for customers that really resonate and solve a need for them,” he added.
Edge with energy drinks
For example, “There’s really no energy drinks in QSRs, but we sell energy drinks, and that’s an important thing for our customers,” Hall said. “So, we put some bundles together where we can have something a little bit more unique than what you’re going to find in the QSR because our assortment is a little bit different than some of the others. So, it’s trying to identify what works for the suppliers, what’s unique for our customers that are going to allow them to make one stop in the morning or for lunch or whatever else to serve their needs.”
Hall said Circle K has solutions that resonate with customers “where they can look at those assortments and say, ‘Wow, it’s a great product’ and we’ve got it paired with the right meal—so they don’t have to make another stop at a QSR and lose another 15 to 20 minutes. We want to be a one-stop shop where we can serve the needs they have for their time-starved lives.”
Crecca commended Circle K’s tiered pricing approach, calling it a “really smart” move that “allows the consumer to have some options on how they want to control their spending.”
These price tiers undercut what fast-food restaurants are doing, she added, noting this will likely be a key area of focus through the end of the year.
“While this is a competitive imperative for them, it’s also an important opportunity for c-stores to further position themselves as competitors to quick-service restaurants and really advance that position as foodservice providers worthy to be in the consumer consideration set, to be thought of as on par with restaurants.”
Hall said Circle K’s meal deals give its customers, who are increasingly cost conscious, “alternatives to QSRs that deliver value.”
He added that Circle K’s meal deals, which will rotate, are “a need that our customers have, and we want to ensure we meet their needs every day.”
Choice More Than Price
Richard Poye, head of development at Food Trends Think Tank, Nashville, Tennessee, said it’s essential to recognize that price alone does not dictate consumer choices.
“Overall value perception significantly influences purchasing decisions,” Poye told CSP. “Product quality, cleanliness, staff training, effective marketing, food safety and brand trust collectively shape how customers view a food offering’s worth.”
While QSRs have successfully established a strong value perception among their clientele, many c-store brands have yet to achieve this recognition, particularly in the food category, he continued.
“However, the convenience retail industry has made commendable strides in positioning itself as a viable source for satisfying meals,” Poye said, noting brands like Twice Daily, which is owned by Nashville-based Tri Star Energy.
“Their commitment to cultivating a strong food brand is evident through their strategic store layouts, which feature large food service areas and well-trained staff dedicated to food service,” Poye said of Twice Daily, which rolled out new deals and flavors for fall. “Their successful $6 Meal Deal, which includes a burger, fries and a beverage, has resonated with customers and enhanced their value perception.”
In contrast, he said, some larger chains leverage their scale to secure vendor funding to support the execution of meal deals, Poye said.
“Yet, the inconsistency in participation across franchise locations—often due to varying promotional focuses or the lack of dedicated foodservice areas—can dilute their effectiveness,” he said.
During a recent store visit in Nashville, Poye said he noted stark differences in offerings among c-store brands, with Twice Daily promoting “a compelling” $6 meal deal while two other c-stores’ meal deal options were priced less competitively or nonexistent.
“In stark comparison, major QSRs in the area uniformly promoted their own meal deals, further emphasizing the opportunity gap for c-stores,” he continued.
Successfully implementing meal deals in convenience retail demands a strategic, long-term commitment to enhancing operations and customer engagement, Poye said.
“With consistent execution and an emphasis on quality, c-stores can significantly bolster their competitive edge against QSRs, offering consumers convenience and compelling meal options,” he said.
This story originally appeared in RB sister publication CSP Daily News.
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