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FOCUS ON COFFEE AND FOODSERVICE

The c-stores have been part of the coffee revolution, and the show floor showcased Coca-Cola’s Coffeecol system. This is a Juan Valdez brand coffee prepared from bag-in-the-box liquid coffee extract.

Foodservice has become the number one in-store sales category for many convenience store operators (excluding beer and/or tobacco) — more in dollar sales than cold beverages, candy or snacks.

Foodservice has also become the singular point of differentiation for the best in class c-stores. Chains like Wawa, Sheetz and others have established proprietary foodservice programs making their stores destinations of choice in their market areas.

The gross profit margin for foodservice in c-stores is 47 percent, according to the NACS State of the Industry Report. That’s pretty close to what we see in vending. The difference versus vending is that in c-stores, candy (at 46.3 percent) and snacks (at 33.3 percent) have lower margins than foodservice. Is it any wonder that c-store operators are looking to drive growth with their foodservice programs?

Data was presented showing that the innovative companies are growing — even in this difficult economy. The value of super heavy users (SHUs) was demonstrated: 30 percent of c-store shoppers account for 74 percent of in-store dollar sales. The most significant SHUs, those who spend more than $10 per visit and who shop most frequently are 7 percent of the shoppers and account for 39.8 percent of sales. That group is contributing to c- store channel growth — even as industry sales are under pressure.

Research was presented from the NACS/Coca-Cola Retailing Research Council. Two c-store chains presented what they have done in response to the research.

Lighting on the lot was improved at one chain to make the whole area safer for night time gas and in-store shoppers. To allow for cleaner lines of sight in to the store, window signs were removed, displays were minimized around the entrance, and store aisle fixtures were lowered in height. Music was piped in to enhance the ambiance. The cost, per store, was $10,000 to make these improvements. Results will be tracked and specific measures have been set for evaluation.

C-stores have also upgraded their restrooms (modernized the ambiance and made a regular cleaning schedule a priority), added new foodservice offerings and enhanced their roller grill offerings.

For vending, OCS and onsite foodservice operators, when you plan what you will sell, is it based on simplifying the shopping process?