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Convenience Store Foodservice - US - April 2013

“While convenience stores have offered prepared foods for years, the trend has accelerated in the past five years, and the scope of c-store foodservice has broadened. Convenience stores are successfully capturing on-the-go dining occasions through ubiquitous presence, quick in/out accessibility, and the benefit of one-stop shopping with fuel purchase. Moving forward, challenges exist for c-store foodservice to be considered an alternative to traditional restaurant dining. Operators must integrate health on the menu, improve atmosphere, and enhance procurement methods of foodservice.”

– Julia Gallo-Torres, Category Manager, Foodservice

Some questions answered in this report include:

  • Why should c-store foodservice integrate health into its menu?
  • How can convenience store foodservice operators improve atmosphere?
  • How can c-store foodservice improve upon its inherent convenience proposition?

 

Convenience stores are successfully capturing dining occasions through ubiquitous presence, quick in/out accessibility, and the benefit of one-stop shopping with fuel purchase. In fact, Mintel finds that 70% of respondents buy prepared food at c-stores. However, as a foodservice entity, there’s more that c-stores can do to compete more directly with restaurants. High-quality food offerings, greater variety, and a well-defined foodservice brand are key attributes that will give rise to the “convenience restaurant.” Aside from the menu, stores that focus on providing a welcoming dining space or gathering space will be in the best position for market growth. In 2012, Mintel estimated the U.S. convenience store foodservice market to be worth some $25.5 billion, with a forecast for 28% growth by 2017.

For the purposes of this report, Mintel uses the National Association of Convenience Stores (NACS) definition of convenience stores: retail businesses with a primary emphasis placed on providing the public with a convenient location to quickly purchase from a wide array of consumable products (predominantly food and gasoline) and services.

Convenience stores have the following characteristics:

  • building size may vary significantly; however, typically the size will be less than 5,000 square feet
  • off-street parking and/or convenient pedestrian access
  • extended hours of operation with many open 24 hours a day, seven days a week
  • stock of at least 500 stock-keeping units (SKUs)
  • product mix includes grocery-type items and also items from the following groups: beverages, snacks (including confectionery), and tobacco.

 

Liqueurs - UK - January 2012

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market
                          • Strong growth in c-store foodservice
                            • Figure 1: Total U.S. convenience store foodservice sales, at current prices, 2007-12
                          • Forecast: favorable growth prospect
                            • Figure 2: Fan chart of market value for convenience store foodservice sales, at current prices, 2007-17
                          • Market factors
                            • Economic impact
                              • Figure 3: Consumer Sentiment Index, January 2007-January 2013
                            • Age is a key factor in use of c-store foodservice
                              • Figure 4: U.S. adult population by age, 2013
                            • Shrinking share of households with children undermines category growth
                              • Figure 5: Number of U.S. households, by presence of children, 2007-12
                            • Hispanic population growth casts positive market influence
                              • Health trends demand menu transparency
                                • Convenience store brands
                                  • Figure 6: Convenience stores where consumers have shopped at in the last four weeks, August 2011-August 2012
                                • The consumer
                                  • Consumers rate the effectiveness of marketing strategies
                                    • Figure 7: Top five very effective marketing strategies, December 2012
                                  • Reasons for buying c-store foodservice
                                    • Figure 8: Reasons for convenience store foodservice purchases, December 2012
                                  • In demand: higher-quality food offerings
                                    • Figure 9: Top five desired attributes for convenience store foodservice, December 2012
                                  • Fast casual offers growth potential
                                    • Figure 10: Top restaurant brand concepts wanted at convenience stores, December 2012
                                  • C-store foodservice succeeds with location, needs improvement in menu options
                                    • Figure 11: Convenience store foodservice compared to fast food, December 2012
                                  • What we think
                                  • Issues in the Market

                                      • Why should c-store foodservice integrate health into its menu?
                                        • How can convenience store foodservice operators improve atmosphere?
                                          • How can c-store foodservice improve upon its inherent convenience proposition?
                                          • Insights and Opportunities

                                            • Eye on fast casual
                                              • Catering to families
                                                • The kids’ menu
                                                  • The snack opportunity
                                                    • New access to fresh: vending
                                                    • Trend Applications

                                                        • Trend: Prove It
                                                          • Trend: Collective Intelligence
                                                            • Mintel Futures: Access Anything Anywhere
                                                            • Market Size and Forecast

                                                              • Key points
                                                                • C-store foodservice continues to grow strong
                                                                  • Sales and forecast of convenience store foodservice
                                                                    • Figure 12: Total U.S. convenience store foodservice sales, at current prices, 2007-17
                                                                    • Figure 13: Total U.S. convenience store foodservice sales, at inflation-adjusted prices, 2007-17
                                                                  • Fan chart forecast
                                                                      • Figure 14: Fan chart of market value for convenience store foodservice sales, at current prices, 2007-17
                                                                  • Market Drivers

                                                                    • Appealing to still-cautious consumers
                                                                        • Figure 15: Consumer Sentiment Index, January 2007-January 2013
                                                                        • Figure 16: Real personal disposable income, January 2007-December 2012
                                                                        • Figure 17: Unemployment and underemployment rates, January 2007-December 2012
                                                                      • Impact of poor economy on gasoline prices and c-store channel
                                                                          • Figure 18: Number of convenience stores, 2002-12
                                                                        • Restaurant sales slow to recover
                                                                          • Figure 19: U.S. restaurant sales, at current prices, 2007-17
                                                                        • Trends toward healthy eating impact c-store foodservice
                                                                          • Total population growth will drive long-term sales
                                                                            • Figure 20: Population by age, 2008-18
                                                                          • Families are a factor to market growth
                                                                            • Figure 21: Number of households, by presence of own children, 2002-12
                                                                          • Hispanics important to future market development
                                                                              • Figure 22: Population, by Hispanic origin, 2008-18
                                                                          • Competitive Context

                                                                            • Key points
                                                                              • Channel-blurring trends creates competitive landscape
                                                                                • Retail grocery competition
                                                                                  • Restaurant competition
                                                                                  • Convenience Store Brands

                                                                                    • Key points
                                                                                      • C-store market is highly fragmented
                                                                                          • Figure 23: Leading convenience store companies, by store count, May 2012
                                                                                        • Convenience store usage
                                                                                          • Figure 24: Convenience stores where consumers have shopped at in the last four weeks, August 2011-August 2012
                                                                                        • Men prefer 7-Eleven
                                                                                          • Figure 25: Convenience stores where consumers have shopped at in the last four weeks, by gender, August 2011-August 2012
                                                                                        • Regional brands attract older consumers
                                                                                          • Figure 26: Convenience stores where consumers have shopped at in the last four weeks, by age, August 2011-August 2012
                                                                                        • 7-Eleven popular among Hispanics
                                                                                          • Figure 27: Convenience stores where consumers have shopped at in the last four weeks, by race/Hispanic origin, August 2011-August 2012
                                                                                        • “Weekend Cooks” over index in c-store usage
                                                                                          • Figure 28: Convenience stores where consumers have shopped at in the last four weeks, by food lifestyle segmentation*, August 2011-August 2012
                                                                                        • “The Invincibles” are more likely to shop c-stores
                                                                                          • Figure 29: Convenience stores where consumers have shopped at in the last four weeks, by health & wellbeing segmentation*, August 2011-August 2012
                                                                                        • Frequency of c-store visits
                                                                                          • Figure 30: Frequency of visiting convenience stores in the last four weeks, by gender, August 2011-August 2012
                                                                                        • 18-24s show an uptick in 10+ monthly visits to c-stores
                                                                                          • Figure 31: Frequency of visiting convenience stores in the last four weeks, by age, August 2011-August 2012
                                                                                      • Selected Companies

                                                                                          • 7-Eleven
                                                                                            • Circle K
                                                                                              • QuikTrip (QT)
                                                                                                • Wawa Inc.
                                                                                                  • Casey’s General Stores
                                                                                                    • Susser Holdings Corp.
                                                                                                      • Sheetz
                                                                                                        • Concepts to watch
                                                                                                          • Answering the demand for drive-thru service
                                                                                                            • Answering the demand for healthy items
                                                                                                              • Answering the demand for fresh, quality foods
                                                                                                              • Marketing Strategies: Industry Application

                                                                                                                • Overview
                                                                                                                  • Defining the c-store foodservice platform
                                                                                                                    • 7-Eleven: Fresh food focus
                                                                                                                      • Figure 32: 7-Eleven promotional offer, March 2013
                                                                                                                      • Figure 33: 7-Eleven app, March 2013
                                                                                                                    • Wawa: Quality focus
                                                                                                                      • Figure 34: Wawa promotional offer, March 2013
                                                                                                                      • Figure 35: Wawa Hoagie Stats ‘n Facts, March 2013
                                                                                                                    • Pilot Flying J: Focus on variety
                                                                                                                      • Figure 36: Pilot Flying J Restaurant Brands, March 2013
                                                                                                                      • Figure 37: Pilot Flying J blog, August 2012
                                                                                                                  • Marketing Strategies: Consumer Perspective

                                                                                                                    • Key points
                                                                                                                      • Majority of c-store foodservice users want tangible offers
                                                                                                                          • Figure 38: Effective marketing strategies, December 2012
                                                                                                                        • Tangible offers are best way to target older c-store foodservice consumers
                                                                                                                            • Figure 39: Any Effectiveness marketing strategies, by age, December 2012
                                                                                                                          • CHAID analysis
                                                                                                                            • Methodology
                                                                                                                                • Figure 40: Convenience store foodservice—CHAID—Tree output, December 2012
                                                                                                                                • Figure 41: Effective marketing strategies of convenience stores—CHAID—Table output, December 2012
                                                                                                                            • Convenience Store Foodservice Usage

                                                                                                                              • Key points
                                                                                                                                • Convenience store foodservice usage is strong
                                                                                                                                  • Figure 42: Convenience store foodservice usage, December 2012
                                                                                                                                • Men aged 18-34 over index in usage of convenience store foodservice
                                                                                                                                  • Figure 43: Convenience store foodservice usage, by gender and age, December 2012
                                                                                                                                • Middle-income groups are more likely users of c-store foodservice
                                                                                                                                  • Figure 44: Convenience store foodservice usage, by household income, December 2012
                                                                                                                                • Families are more apt to buy c-store foodservice
                                                                                                                                  • Figure 45: Convenience store foodservice usage, by presence of children in household, December 2012
                                                                                                                              • Reasons to Buy C-store Foodservice

                                                                                                                                • Key points
                                                                                                                                  • It’s all about convenience
                                                                                                                                    • Figure 46: Reasons for convenience store foodservice purchases, December 2012
                                                                                                                                  • Convenience and foodservice selection attract men aged 18-34
                                                                                                                                    • Figure 47: Reasons for convenience store foodservice purchases, by gender and age, December 2012
                                                                                                                                  • Families like the selection of fountain beverages
                                                                                                                                    • Figure 48: Reasons for convenience store foodservice purchases, by presence of children in household, December 2012
                                                                                                                                • Desired Attributes for C-store Foodservice

                                                                                                                                  • Key points
                                                                                                                                    • Greatest demand for higher-quality food offerings
                                                                                                                                      • Figure 49: Desired attributes for convenience store foodservice, December 2012
                                                                                                                                    • Younger users want drive-thru/delivery, older users want better in-store dining experience
                                                                                                                                      • Figure 50: Desired attributes for convenience store foodservice, by gender and age, December 2012
                                                                                                                                    • Attract highly affluent users with unique food options
                                                                                                                                      • Figure 51: Desired attributes for convenience store foodservice, by household income, December 2012
                                                                                                                                    • Drive-thru is an important attribute for users in Marketing to the Senses demographic
                                                                                                                                      • Figure 52: Desired attributes for convenience store foodservice, by very effective marketing strategies, December 2012
                                                                                                                                  • Restaurant Concepts Desired by C-store Users

                                                                                                                                    • Key points
                                                                                                                                      • Sandwich and coffeehouse concepts have the strongest potential
                                                                                                                                          • Figure 53: Desired types of restaurant brand concepts, December 2012
                                                                                                                                        • Women drawn to bakery-café concepts
                                                                                                                                          • Figure 54: Desired types of restaurant brand concepts, by gender, December 2012
                                                                                                                                        • Coffeehouse concepts appeal to older users
                                                                                                                                          • Figure 55: Desired types of restaurant brand concepts, by age, December 2012
                                                                                                                                        • Core 18-34 male users want better burger concepts at c-stores
                                                                                                                                          • Figure 56: Desired types of restaurant brand concepts, by gender and age, December 2012
                                                                                                                                        • Highly affluent interested in better burgers; low-income users want family concepts
                                                                                                                                          • Figure 57: Desired types of restaurant brand concepts, by household income, December 2012
                                                                                                                                        • Tech-savvy users want more pizza concepts available at c-stores
                                                                                                                                          • Figure 58: Desired types of restaurant brand concepts, by very effective marketing strategies, December 2012
                                                                                                                                      • Interest in Types of Food and Drinks

                                                                                                                                        • Key points
                                                                                                                                          • Cold beverages and hot foods top list of desired food and drinks
                                                                                                                                              • Figure 59: Types of food and drinks desired at c-store foodservice, December 2012
                                                                                                                                            • Women looking for snack sizing and healthy choices
                                                                                                                                              • Figure 60: Types of food and drinks desired at c-store foodservice, by gender, December 2012
                                                                                                                                            • Young women give priority to health food, while young men have interest in breakfast
                                                                                                                                              • Figure 61: Types of food and drinks desired at c-store foodservice, by gender and age, December 2012
                                                                                                                                            • Marketing to the Senses group over indexes in wanting unique menu items
                                                                                                                                              • Figure 62: Types of food and drinks desired at c-store foodservice, by very effective marketing strategies, December 2012
                                                                                                                                          • C-store Foodservice Compared to Fast Food

                                                                                                                                            • Key points
                                                                                                                                              • C-store foodservice largely perceived as same as fast food
                                                                                                                                                • Figure 63: Convenience store foodservice compared to fast food, December 2012
                                                                                                                                              • C-store foodservice succeeds with convenient locations
                                                                                                                                                • Figure 64: Better than fast food restaurants, by gender and age, December 2012
                                                                                                                                              • Areas for improvement: Variety of menu options
                                                                                                                                                • Figure 65: Worse than fast food restaurants, by gender and age, December 2012
                                                                                                                                            • Impact of Hispanic Origin

                                                                                                                                              • Overview
                                                                                                                                                • Hispanics over index in c-store foodservice usage
                                                                                                                                                  • Figure 66: Convenience store foodservice usage, by Hispanic origin, December 2012
                                                                                                                                                • Hispanics like food options at c-stores
                                                                                                                                                  • Figure 67: Reasons for convenience store foodservice purchases, by Hispanic origin, December 2012
                                                                                                                                                • Hispanics desire familiar restaurant brand concepts
                                                                                                                                                  • Figure 68: Desired attributes for convenience store foodservice, by Hispanic origin, December 2012
                                                                                                                                                • Coffeehouse/donut shops most popular among Hispanics
                                                                                                                                                  • Figure 69: Desired types of restaurant brand concepts, by Hispanic origin, December 2012
                                                                                                                                                • Hispanics are interested in nutritional information
                                                                                                                                                  • Figure 70: Types of food and drinks desired at c-store foodservice, by Hispanic origin, December 2012
                                                                                                                                              • Appendix: Consumer Tables

                                                                                                                                                  • Figure 71: Convenience stores where consumers have shopped at in the last four weeks, by household income, August 2011-August 2012
                                                                                                                                                  • Figure 72: Frequency of visiting convenience stores in the last four weeks, by food lifestyle segmentation, August 2011-August 2012
                                                                                                                                                  • Figure 73: Frequency of visiting convenience stores in the last four weeks, by health & well-being segmentation, August 2011-August 2012
                                                                                                                                                  • Figure 74: Any Effectiveness marketing strategies, by household income, December 2012
                                                                                                                                                  • Figure 75: Types of food and drinks desired at c-store foodservice, December 2012
                                                                                                                                                  • Figure 76: Types of food and drinks desired at c-store foodservice, by household income, December 2012
                                                                                                                                              • Appendix: Simmons Segmentation Definitions

                                                                                                                                                  • Food lifestyle segmentation system
                                                                                                                                                    • Health and well-being segments
                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                      Companies Covered

                                                                                                                                                      • Alimentation Couche-Tard Inc.
                                                                                                                                                      • Casey's General Stores Inc
                                                                                                                                                      • Facebook, Inc.
                                                                                                                                                      • Sheetz, Inc
                                                                                                                                                      • The Kroger Co.
                                                                                                                                                      • Wawa, Inc

                                                                                                                                                      Convenience Store Foodservice - US - April 2013

                                                                                                                                                      US $3,995.00 (Excl.Tax)