When most think of C-stores, they imagine small shops where you can grab a drink or snack while filling up the gas tank. That image isn’t always associated with traditional quick-service dining. Some brands, however, are working to change the conversation, expanding their food offerings and giving customers a reason to stop beyond the pump.
According to the National Association of Convenience Stores (NACS), C-stores sell 80 percent of the fuel purchased in the entire country, and about 44 percent of those customers go inside. Among those who venture in, about one in three end up making a purchase. This large cohort is there for the taking, and is as good of a reason as any to attempt to convert fuel customers into food ones as well.
Kwik Trip is a Midwest-based chain working to draw in those customers. Its priority is keeping prices low, and making the food high quality and readily available to try. Notably, through sampling. ”Our goal is to get the food in our customers' mouths,” Paul Servais, retail food service director for the brand, says. “We sample all the time. The expectation is that we're going to be sampling a minimum of eight hours a week per store.” Servais says this practice, along with implementing specials like Dollar Wednesdays, have inspired trial.
Though fuel certainly drives customers into Kwik Trip, the brand also has a significant grocery arm. Kwik Trip has its own dairy and is able to produce proprietary milk and ice cream, as well as two bakery plants that produce breads and sweet goods. Having these resources shortens the supply chain and allows the brand to innovate food items in-house at an accelerated rate, Servais says.
Kum & Go, also based in the Midwest, decided to back a large effort to improve its food menu roughly two years ago. The brand wanted to put more of an emphasis on quick-service foods rather than the typical C-store menu, Jac Moskalik, VP of food innovation for the brand, says. That meant launching made-to-order options like sandwiches or bowls. Moskalik says customers responded well to the change, but the difficult part was conquering the stereotype that C-stores don’t feature restaurant-quality food. “All statistics show that once the consumers try our new menu they're hooked. Once they try it, they come back,” Moskalik says. Natasha Ratzlaff, director of category management and food service at Kum & Go, adds there is a 68 percent customer retention rate. “The lines of convenience are blurring,” she says.
One way Kum & Go found to engage consumers was to continue to offer grab-and-go items alongside its made-to-order menu. This allowed the brand to retain customers coming into the store on a time crunch, while also exposing them to broader offerings down the line. It’s not about ditching the convenience element—but rather being able to meet the need for any occasion, the company says.
In terms of dayparts, the morning is generally a time where C-stores thrive—people are on their way to work, they need gas, maybe they stop in to get a coffee. While in line, they might add on a bagel or breakfast burrito to their order. Moskalik notes about 54 percent of Kum & Go’s sales occur during the A.M. window. Though the brand still plans to innovate at breakfast, it expects to focus on the afternoon and evening dayparts as well. “Next year all of our innovation is built around different occasions,” Moskalik says.
On the other hand, Casey’s is a C-store looking to do the opposite. The chain already thrives in the afternoon and evening because of its established pizza business that brought in $1.2 billion in revenue last fiscal year. Because of that dinner strength, it has its sights set on beefing up breakfast. Pizza is part of that equation, too—Casey’s breakfast pizza, sold by the slice, has been a fan favorite for a while, Tom Brennan, chief merchandising officer, says.
However, about a year ago Casey’s decided to do a breakfast relaunch, complete with bean to cup coffee machines and the re-engineering of its breakfast burritos. “We've continued to see unit and dollar growth in that product,” Brennan says. “We've also taken a look at our breakfast sandwich lineup to make sure that we are delivering the same quality that we deliver in our pizza. We've seen guests really engage with us, and it's been very favorable.”
One common thread between C-stores that operate well across their quick-service operations is a rewards program tied to discounts at the pump. With recent inflation, consumers are looking to save on gas however they can. This gives C-store apps and their connected loyalty programs a leg up—consumers already have to buy gas, why not save some money by joining a loyalty program?
At Kum & Go, a rewards program connected to its mobile app is an important way to drive transactions. The brand has tangibly connected its app to fuel by allowing customers to unlock the pump and pay from their phones. “You can actually fuel up while not having to leave your car with the exception of putting the pump inside of your vehicle,” Moskalik says. “Then you can actually shop for items inside the store while you're fueling up and our fuel rewards are all linked in there.” Customers can also tailor rewards to get what they want, whether that is money off gas or a free food item.
Casey’s launched its rewards platform in January 2020, and is currently approaching 6 million members, Brennan says. People earn points from money they spend at Casey’s and can redeem it for Casey’s cash that purchases in-store items, money off their gas, or a donation of those points to a local school through its cash for classrooms program. The brand also touts an active customer base: over 50 percent of its members are active in the app on a monthly basis, Brennan says.
Kwik Trip’ mobile app is called Kwik Rewards, which Servais says customers use religiously to get money off of their gas. “The magic of rewards is cents off gallons,” Servais says. “That's what drives loyalty in the C-store industry.”