The gas station sandwich stigma is dead. Today’s consumers are going out of their way for convenience store prepared foods.
This wasn’t always the case. C-stores used to struggle to sell fresh / prepared foods, and consumer trust wasn’t quite ready to embrace it either. In 2005, food service held only an 11.9% market share of in-store sales. Today, that number is at nearly 29%. With food service nearly growing 3x, many brands have begun viewing prepared food as a future growth engine.
Is the Modern C-Store a Threat to QSR?
Sheetz has been a categorical leader for C-store prepared foods for decades, instituting the MTO (made to order) experience into their locations as early as 1986. For them, they’ve always been fighting the stigma associated with the “gas station food” ideology, where consumers think the product can’t compete in quality because it’s a C-store product.
Today, brands like Wawa, QuikTrip, Sheetz and more battle for recognition as destination-like experiences for prepared foods. For QSR brands, this is a direct threat to the future of fast-food experience. 50% of consumers agree that convenience stores are just as capable of offering fresh food and beverages as restaurants are. Additionally, consumers believe convenience stores are currently better value than restaurants, and store foodservice margins are generally higher than QSRs, so they can offer better deals and discounts.
This is a direct signal that the future of C-stores is priming with food to be the differentiating offer between brands. Fast food operators aren’t even the fastest food you can get. The average C-store experience comes in at just under 4 minutes, with QSR clocking an average of 7 minutes. Additionally, a larger percentage of Americans (93%) live within 10 minutes of a C-store.
In some ways C-stores have learned how to beat QSR at its own game, and some brands are leaning deeper into private-label food product to enrich the experience even more.
But What Does the C-Store Food Experience Really Look Like?
QSRs historically are built on standardization, and how a brand shows up at scale is a big deal. It’s the same burger, assembled the same way, with the same reliable taste no matter what location you’re visiting. It’s a beautiful thing, and it ties back to the brand’s dependability and brand equity within the product.
C-stores are almost built to be the opposite. That’s not to say there isn’t standardization in C-store, rather it’s the consumer on the other end that doesn’t have a standard ask. Sometimes they just want a smoothie. Other times they may want a snack, or they might spring for a full meal and then some. C-stores are built to meet the customer where they are at, no matter the mood they’re in.
22% of consumers would pay more for unique food and beverage items at a convenience store, and 40% are more likely to visit one specifically because of unusual offerings. Because of this, C-store experiences are rewarded for having wider arrays of choices as food options, where the typical QSR doesn’t typically have the luxury to make the same investments, nor does it necessarily make sense.
And C-stores are advocating for healthier lifestyles and options as well for the end user. Sheetz is one of the industry leaders prioritizing their “eat shmart” menu. Other brands are leaning into healthier drinks like meal replacement shakes, smoothies and more, and some have implemented GLP-1 related food offers to reflect consumer behaviors and meet the guest where they’re at.
The Growth Engine Ahead
In the next 3-5 years C-store food experience is going to grow, and the numbers back it up. Consumers are already indicating that C-stores are emerging as their go-to resource for a quick bite, and operators are leaning into it. 40% of C-store consumers are impressed with the variety of options in C-store prepared foods, with 75-85% reporting good experiences with prepared food and beverage offers in convenience.
We anticipate that C-stores will continue to lead with options but lean heavier into restaurant tendencies. Expect brands to display the theatre of food service all as a badge of honor. Full kitchens, robust interior and exterior dine-in, delivery and third-party considerations. The seeds are already there for some brands, but it’s going to grow and more C-store operators are going to adopt these features into their own offer.
Some brands are trying to get ahead of the competitors entirely. RaceTrac just acquired Potbelly for $566 million. Brands don’t make that level of investment in something unless they see the opportunity in it. Expect more brands to acquire or continue to partner with food brands to bolster their product and experiential offer.
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There’s a reason that food service alone made up more than a quarter of in-store sales in convenience last year (28.5%). Consumer behaviors towards the modern C-store continue to change. There’s a certain thrill to the spontaneity of the C-store offer now, with fresh meals, snacks, drinks, and ways to experience the brand outside of a simple transaction. The beauty is that the guest has complete control of their journey and can choose how they want to enjoy their trip, whether it’s for pleasure and leisure or speed and efficiency.
As consumer behaviors have continued to change toward c-stores, the offers are swiftly reflecting and catering to them. It’s clear that the industry recognizes the opportunity, and the consumer is leaning deeper into the C-store food offer with an open mind, and an empty stomach.
