Consumers make 2.6 billion visits annually to convenience stores for snacks. Those sales account for 61 percent of the snack segment’s traffic. Quick-serves see 7.1 million snack visits a year, accounting for 18 percent of snack traffic, according to NPD Group’s ongoing CREST research.
Part of the reason for the huge difference is quick-serves concentrate on the core dayparts—breakfast, lunch, and dinner—where checks are higher. Growth in snack visits is, however, occurring in quick-serve, says Bonnie Riggs, restaurant industry analyst for NPD. There is an opportunity to build higher check averages during the snack daypart if brands are prepared.
The C-Store Model
“Our differentiating or competitive advantage over every other channel is transaction speed,” says Jeff Lenard, vice president of communications for the National Association of Convenience Stores (nacs). “In our speed metrics, it only takes 3 to 4 minutes from the time customers leave their cars to when they come back with their purchases.”
Food, including snacks, is a major area of growth for c-stores. “We want to be considered, in the consumers’ mind, as restaurants that happen to sell gas, rather than as gas stations that happen to sell food,” Lenard says.
Industry leader 7-Eleven claims to sell 60 million fresh-baked doughnuts and pastries annually in its approximately 7,600 North American stores. “Nearly one-third of the 6 million people who stop by a U.S. 7-Eleven store each day purchase immediately consumable food,” reads the company Web site.
With the price-conscious consumer in mind, the c-store giant offers private-label snacks, including chips, cookies, candy, and peanuts, at 10 to 20 percent less than name brands.
Quik Trip Corp., based in Tulsa, Oklahoma, also has made a significant commitment to snacks, including fresh items, which consumers increasingly select, says spokesman Mike Thornbrugh.
The company of 512 units operates with the consumer’s price/value view. “Our basic philosophy is that we are a high-volume, low-margin retailer,” Thornbrugh says.
Quik Trip has established a subsidiary company, QT Kitchens. Its three commissaries prepare fresh fruit and vegetable cups, salads, sandwiches, and bakery items for daily delivery to surrounding units. Another two commissaries are under construction and scheduled to be operating by summer.
In addition to the fresh-food cases, roller grills have spawned significant snack sales, Thornbrugh says. Most units have expanded from four to 10 grills, which allows room for items beyond hot dogs, such as breadsticks, corn dogs, egg roll variations, and taquitos.
Another boon to c-stores is the opportunity for co-branding with names consumers are familiar with.
Proprietary research conducted for Sara Lee Corp. (Ball Park, Hillshire Farm, and Jimmy Dean), reveals that nationally recognized brands can command a premium price of 10 cents more per unit.
“That is important from a margin perspective,” says Matt Drew, Sara Lee’s senior customer marketing manager.
Sara Lee provides turnkey equipment programs, including point-of-sale material and training for its roller-grill Ball Park hot dogs and Hillshire Farm smoked sausage products, to its c-store partners.