C-Store Rebound Could Be Threat to Quick Service

    Industry News | October 1, 2010
    New data from the NPD Group shows that the convenience-store segment is finally starting to rebound from the recession, and one expert believes quick serves should consider the segment a growing threat.

    The NPD Group found that c-store traffic was up 8 percent in the second quarter of 2010 over the same period of 2009, while c-store sales were up 11 percent.

    Further, the average number of visits a consumer makes to a c-store in a typical 30-day period increased to 6.4. That number stood at 6.1 in the second quarter of 2009.

    David Portalatin, industry analyst for NPD’s convenience store research, says that while the c-store channel hasn’t returned to prerecession levels of performance, its recent growth signals a maturing segment.

    “Convenience retailers are … beginning to understand they can no longer be dependent on gasoline margin and cigarette and tobacco margin to sustain their business,” Portalatin says.

    “They have to go in other directions. The channel as a whole is becoming more mature, more sophisticated, and is better at executing foodservice strategies.”

    Portalatin says that based on c-store traffic research, the vast majority of consumers are still visiting convenience retailers because they’re either in a hurry or the store is in a convenient location.

    He also says light lunches that consist only of items like a bag of potato chips and soda are becoming more popular, thus paving the way for c-stores.

    “When it comes to quality of food, or consumers who have a specific taste or craving for a certain food or want a specific food item, [quick service] still holds a significant advantage over convenience stores in that area,” Portalatin says.

    But as the c-store channel grows, more innovation is entering the fold, Portalatin says—and quick-serve operators should take note.

    “As these convenience retailers improve upon their offerings and start executing better quality in their foodservice operations, that’s going to clearly be a competitive threat to traditional [quick-service] operators,” he says.

    By Sam Oches
    News and information presented in this release has not been corroborated by WTWH Media LLC.