Are your sales and traffic increasing? I read recently that visits to convenience stores increased by 4.9 percent in the fourth quarter of 2012 versus 2011. This was reported on CSPnet.com from data tracked by The NPD Group. A number of factors impacted the favorable trend including lower gas prices.
According to CSPnet.com, “The afternoon daypart, between 2:00 and 6:00 p.m., continues to be the most popular daypart, with slightly more than 35 percent of c-store shoppers visiting then, a 1.7 percentage point growth over same quarter year ago.”
Increased c-store sales mean trouble for vending
If c-stores are increasing traffic, where is that growth coming from? In our channel, it is critical that we win beverage and snack sales in the break periods each morning and afternoon. Food, at locations where we offer it, represents a big share of sales. But beverages and snacks are our core lines of business. The morning and afternoon snacks dayparts are critical for us.
C-stores, and fast food restaurants too, have made snacks a major growth platform. Much of this goes beyond the packaged snacks we are selling. For the afternoon daypart, there have been many snack-oriented food product introductions. Let’s look at the “why” and the “what” of these snack initiatives.
First is why: C-stores and fast food restaurants are looking to increase traffic and sales – an obvious point. They know that people in the PM snack period are generally at work, driving home – or will be leaving soon. Another factor is that younger people are eating fewer big meals – instead they’re snacking more often. They’re having more substantial (food) snacks versus packaged snacks.
Second is what: The strategies, while unique for each company, have some common logic. Many of the menu items are smaller portions versus meal-size servings. The price points typically range from $0.99 to $1.50 – making it a relatively inexpensive purchase. There are a lot of “one-handed foods” – easy to hold and eat.
This represents a real risk for our operations. What happens if people skip the afternoon snack at our vending machines or micro-markets? What if they decide to wait to buy a food snack at a convenience store on the way home? We lose the snack sale and might lose the beverage sale too.
Look at what the competition is selling
Don’t sit there reading this. Get out of your office – especially for the afternoon daypart. Visit c-stores and fast food restaurants on high-traffic streets near locations you serve. See for yourself what people are buying.
For vending and micro-market operators, look at your food menu offerings. How can you add some snack-sized food portions? How will the price-points help you position these items as something new on your menu?
I’m not forgetting about hot beverages and OCS sales opportunities. The fast food chains have made beverage menus a big opportunity. McDonald’s has been driving beverage visits by expanding their coffee sales. According to another news item at CSPnet.com, based on data from StudyLogic, McDonald's is No.1 in hot brewed coffee servings with a 14.31 percent share in the fourth quarter of 2012. Dunkin’ Donuts was No.2, Starbucks was No. 3 and 7-Eleven was No.4.
While you are re-thinking your food menu, look for opportunities to expand your coffee and hot beverage line-up too. VMW reported on the Costa Express CEM-200 vending machine from Costa Coffee. At the NAMA Coffee, Tea & Water conference, the industry strategy for future growth was presented.
Our shoppers are apparently a prime target for fast food chains and convenience stores. What have you done lately to increase traffic at the locations you serve?