How Convenience Stores Threaten Fast-Food Restaurants

    Competition for foodservice occasions is heating up.

    Outside Insights | January 23, 2023 | Tom Cook
    Sheetz frozen drinks

    Sheetz

    Channel blurring between quick-service restaurants and convenience stores has been occurring for some time now.

    Convenience stores have significantly upped their game in foodservice over the last several years. And there is good reason for this. Convenience store profit margins on foodservice sales are significantly higher than on their retail sales (approximately 50 versus 30 percent). Recognizing this, many convenience stores are focusing primarily on growing their foodservice business.

    READ MORE: Are C-Stores Becoming Serious Food and Beverage Contenders?

    Convenience chains such as Sheetz, Wawa, Kum & Go, Casey's and others have developed foodservice menus and fresh offerings that not only compete with, but in some cases improve upon quick-service restaurant offerings.

    What follows are six ways convenience stores threaten fast-food restaurants:

    • Fifty percent of consumers agree that convenience stores are just as capable of offering fresh food and beverages as restaurants are.
    • Consumers perceived value of convenience stores is currently higher than that of restaurants.
    • Convenience store foodservice margins are generally higher than at quick-serves, so they can offer more frequent deals and with greater discounts.
    • Convenience stores generally offer greater menu variety than quick-serves, which is an opportunity to lure away customers.
    • Convenience store retail items provide an opportunity to attract consumers looking for the convenience of a one-stop shopping occasion.
    • Drive-thru, which is currently not widespread at convenience stores, offers the opportunity to get on equal footing with quick-service brands in terms of speed and convenience.

     

    Channel blurring between quick-service restaurants and convenience stores has been occurring for some time now. That being said, the pace is picking up, so now is the time to keep these six convenience store threats top-of-mind as you develop and implement your 2023 business plan.

    Tom Cook is a Principal of King-Casey. Established in 1953, King-Casey is a restaurant and foodservice business improvement firm.  King-Casey provides strategic menu optimization advice and a range of services to help clients manage overall food and beverage offerings affecting their positioning, reputation, and business growth. For information, visit www.king-casey.com or contact Tom Cook at 203/571-1776 or email tcook@king-casey.com