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Convenience Store Foodservice - US - March 2011

Like all retailers, convenience stores (c-stores) are emerging slowly from the enforced economic hibernation known as the Great Recession of the last three years. The characteristics that made c-stores popular and growing in the last century remain: convenient locations, fast service and low prices. But increased competition and changes in consumer lifestyles and buying behavior mean these factors may not be enough for c-stores to regain positive sales momentum. Higher gasoline prices cause consumers to drive less and the number of Americans who smoke steadily declines. With these traditional sales pillars diminished, c-stores are looking to foodservice to provide same-store sales increases.

In this report, Mintel looks at the c-store industry’s makeup in the wake of the recession and analyzes available consumer research and trend data to forecast c-stores’ future prospects. Among the questions addressed are:

  • How is the c-store industry structured and which companies are its leaders?
  • How has the recession changed the c-store industry?
  • From where are c-stores facing competition for consumer discretionary income and how is the industry responding?
  • Who are c-stores best customers/shoppers?
  • When are the highest-sales dayparts for c-stores?
  • How can the c-store industry most effectively target new customers?
  • What opportunities do the advent of new social networking sites (SNS) and digital media channels offer to c-stores?
  • Which demographics aren’t purchasing from c-stores and how can these consumers be brought in?

This report includes insights and information gleaned from:

  • Mintel Oxygen, which offers foodservice analyst expertise and a dedicated report series
  • Mintel Inspire, a unique tool that reveals daily influences on brands and people, and helps generate ideas about trend direction
  • Mintel Menu Insights, which provides flavor, ingredient, preparation, and price trend analysis, drawing from the largest 350 chain restaurants, as well as 150 independent restaurants, 50 restaurants run by top chefs, and 25 beverage-focused restaurants
  • Custom consumer research on consumer attitudes relevant to topics analyzed in the report.

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Table of contents

  1. Scope and Themes

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

                      • Convenience stores still have a niche
                        • The c-store marketplace is populated with local and regional brands
                          • Figure 1: Top 20 convenience store companies, by total store count, July 2010
                        • 7-Eleven is the most visited brand
                          • C-store expansion is stagnant
                            • The recession has been a double-edged sword for c-stores
                              • C-stores face more and tougher competition
                                • Cigarette sales are increasingly unhealthy
                                  • OMG! New media give c-stores new inexpensive marketing tools
                                    • Beverages continue to be c-stores’ most alluring products
                                      • Young adults are c-stores’ best customers
                                        • Speedy service, not price or quality, is c-stores’ biggest draw
                                          • Afternoons have become c-stores’ busiest daypart
                                            • Quality is a chief concern among c-store avoiders
                                            • Insights and Opportunities

                                                • C-stores are not top-of-mind options for many consumers
                                                  • C-stores should consider QSRs’ “barbell” pricing strategies
                                                    • C-stores could add or promote all-day breakfast
                                                      • C-stores can better leverage important snack trends
                                                        • Evenings have the highest checks
                                                          • Keep on trucking: C-stores are missing the hottest trend
                                                            • C-stores aren’t addressing healthy eating issues
                                                              • Food allergies are a growing issue
                                                              • Inspire Insights

                                                                  • Trend—Extend My Brand
                                                                      • Figure 2: Reasons for not ordering food at convenience stores, November 2010
                                                                    • Consider this
                                                                      • Bottom line
                                                                      • Market Size and Forecast

                                                                        • Key points
                                                                          • Foodservice sales grow as more enter the market
                                                                            • Sales and forecast of foodservice at convenience stores
                                                                              • Figure 3: Convenience store foodservice sales, at current prices, 2005-15
                                                                              • Figure 4: Convenience store foodservice sales, at inflation-adjusted prices*, 2005-15
                                                                            • Fan-chart forecast
                                                                                • Figure 5: Convenience store foodservice sales, fan forecast, 2005-15
                                                                            • Competitive Context

                                                                              • Key points
                                                                                • More competition from more sources
                                                                                  • Hypermarkets and others cut into gas sales
                                                                                    • Cigarette smoking continues to wane
                                                                                      • Beer sales are healthy, making them appealing to other retailers
                                                                                        • Coffee becomes a morning battleground
                                                                                          • QSRs launch attack of the breakfast sandwich
                                                                                              • Figure 6: Top 20 menu items on quick service restaurant menus, by incidence, Q4 2007-Q4 2010
                                                                                              • Figure 7: Top 20 menu items on quick service restaurant menus, by incidence and price, Q4 2007-Q4 2010
                                                                                            • C-stores continue to be a fragmented category
                                                                                            • Market Drivers

                                                                                              • Key points
                                                                                                • Our desire for speed and convenience is undiminished
                                                                                                  • Foodservice industry slowly recovering from recession
                                                                                                    • Figure 8: U.S. restaurant sales, at inflation-adjusted prices, 2005-15
                                                                                                    • Figure 9: National Restaurant Association Restaurant Performance Index, January 2009-January 2011
                                                                                                  • Consumer confidence improves, too
                                                                                                    • Figure 10: Thomson Reuters/University of Michigan Consumer Sentiment Index, March 2007-February 2011
                                                                                                  • Mixed unemployment data
                                                                                                    • Figure 11: Unemployment and underemployment rate, January 2007-January 2011
                                                                                                  • Coupon usage data show Americans remain wary
                                                                                                    • Other data question recovery speed for consumer spending
                                                                                                      • Gasoline prices have been rising since 2009
                                                                                                        • Figure 12: U.S. average gasoline prices, 2000-11
                                                                                                    • Brand Analysis: 7-Eleven

                                                                                                      • Overview
                                                                                                        • Performance summary
                                                                                                          • Brand positioning
                                                                                                            • Figure 13: Breakout of 7-Eleven merchandise sales for fiscal year 2004
                                                                                                        • Brand Analysis: Circle K

                                                                                                          • Overview
                                                                                                            • Performance summary
                                                                                                              • Brand positioning
                                                                                                              • Brand Analysis: Sheetz

                                                                                                                • Overview
                                                                                                                  • Performance summary
                                                                                                                    • Brand positioning
                                                                                                                    • Brand Analysis: Wawa

                                                                                                                      • Overview
                                                                                                                        • Performance summary
                                                                                                                          • Brand positioning
                                                                                                                          • Brand Analysis: Speedway/SuperAmerica

                                                                                                                            • Overview
                                                                                                                              • Performance summary
                                                                                                                                • Brand positioning
                                                                                                                                • Brand Analysis: Casey’s General Store

                                                                                                                                  • Overview
                                                                                                                                    • Performance summary
                                                                                                                                      • Figure 14: Revenues for Casey’s General Stores Inc., years ending 30th May 2008-10
                                                                                                                                    • Brand positioning
                                                                                                                                    • Marketing Strategies

                                                                                                                                        • Digital channels
                                                                                                                                          • Figure 15: Tedeschi Food Shops Web page
                                                                                                                                          • Figure 16: Tedeschi Food Shops Facebook page
                                                                                                                                          • Figure 17: 7-Eleven Facebook page for Slurpee beverages
                                                                                                                                          • Figure 18: ampm Facebook page for Big West basketball tournament
                                                                                                                                          • Figure 19: ampm Facebook homepage
                                                                                                                                          • Figure 20: The Pantry/Kangaroo Express Facebook page for “The Battle for Bean Street” promotion
                                                                                                                                          • Figure 21: Ricker Oil YouTube announcement of Twitter promotion
                                                                                                                                          • Figure 22: Wawa.com monthly visitors, August 2010-January 2011
                                                                                                                                        • Showing some app-titude
                                                                                                                                          • No-nonsense media
                                                                                                                                            • Figure 23: 7-Eleven “Tasty Treats” commercial
                                                                                                                                            • Figure 24: ampm “Too Much Good Stuff” commercial
                                                                                                                                            • Figure 25: Speedway “Your coffee. Your way” commercial
                                                                                                                                            • Figure 26: Wawa “HoagieFest 2010” commercial
                                                                                                                                            • Figure 27: Wawa “Gottahava Wawa” television commercial
                                                                                                                                            • Figure 28: Wawa “Coffeetopia” television commercial
                                                                                                                                        • Convenience Store Foodservice Order Usage

                                                                                                                                              • Figure 29: Foodservice items ever purchased at convenience stores, November 2010
                                                                                                                                              • Figure 30: Foodservice items ever purchased at convenience stores, by gender, November 2010
                                                                                                                                              • Figure 31: Foodservice items ever purchased at convenience stores, by age, November 2010
                                                                                                                                              • Figure 32: Foodservice items ever and usually purchased at convenience stores, November 2010
                                                                                                                                              • Figure 33: Foodservice items usually purchased at convenience stores, by gender, November 2010
                                                                                                                                              • Figure 34: Foodservice items usually purchased at convenience stores, by age, November 2010
                                                                                                                                              • Figure 35: Foodservice items usually purchased at convenience stores, by household income, November 2010
                                                                                                                                          • Convenience Store Usage

                                                                                                                                              • Figure 36: Convenience store brand usage, November 2010
                                                                                                                                              • Figure 37: Convenience store brand usage, by gender, November 2010
                                                                                                                                              • Figure 38: Convenience store brand usage, by age, November 2010
                                                                                                                                              • Figure 39: Convenience store brand usage, by region, November 2010
                                                                                                                                          • Convenience Store Ordering Drivers

                                                                                                                                              • Figure 40: Drivers for convenience store foodservice ordering, November 2010
                                                                                                                                              • Figure 41: Drivers for convenience store foodservice ordering, by gender, November 2010
                                                                                                                                              • Figure 42: Drivers for convenience store foodservice ordering, by age, November 2010
                                                                                                                                          • Convenience Store Foodservice Ordering

                                                                                                                                              • Figure 43: Convenience store daypart usage, November 2010
                                                                                                                                              • Figure 44: Convenience store daypart usage, by age, November 2010
                                                                                                                                              • Figure 45: Convenience store daypart usage, by household income, November 2010
                                                                                                                                              • Figure 46: Convenience store meal usage, November 2010
                                                                                                                                              • Figure 47: Convenience store meal usage, by age, November 2010
                                                                                                                                              • Figure 48: Convenience store average meal spend, November 2010
                                                                                                                                              • Figure 49: Convenience store average meal spend, by gender, November 2010
                                                                                                                                              • Figure 50: Convenience store average meal spend, by age, November 2010
                                                                                                                                          • Attitudes Toward Convenience Stores

                                                                                                                                              • Figure 51: Consumer attitudes toward convenience stores, November 2010
                                                                                                                                              • Figure 52: Consumer attitudes toward convenience stores, by gender, November 2010
                                                                                                                                              • Figure 53: Consumer attitudes toward convenience stores, by age, November 2010
                                                                                                                                          • Why Not Convenience Stores?

                                                                                                                                              • Figure 54: Reasons for not ordering food at convenience stores, November 2010
                                                                                                                                              • Figure 55: Reasons for not ordering food at convenience stores, by gender, November 2010
                                                                                                                                              • Figure 56: Reasons for not ordering food at convenience stores, by age, November 2010
                                                                                                                                          • Cluster Analysis

                                                                                                                                              • Reluctants
                                                                                                                                                • Demographics
                                                                                                                                                  • Characteristics
                                                                                                                                                    • Opportunity
                                                                                                                                                      • Anytimers
                                                                                                                                                        • Demographics
                                                                                                                                                          • Characteristics
                                                                                                                                                            • Opportunity
                                                                                                                                                              • Breakfast Clubs
                                                                                                                                                                • Demographics
                                                                                                                                                                  • Characteristics
                                                                                                                                                                    • Opportunity
                                                                                                                                                                      • Cluster characteristics
                                                                                                                                                                        • Figure 57: Convenience food clusters, November 2010
                                                                                                                                                                        • Figure 58: Daypart visits, by convenience food clusters, November 2010
                                                                                                                                                                        • Figure 59: Primary c-store usage drivers, by convenience food clusters, November 2010
                                                                                                                                                                        • Figure 60: Purchase attitudes, by convenience food clusters, November 2010
                                                                                                                                                                      • Cluster demographics
                                                                                                                                                                        • Figure 61: Convenience food clusters, by gender, November 2010
                                                                                                                                                                        • Figure 62: Convenience food clusters, by age, November 2010
                                                                                                                                                                        • Figure 63: Convenience food clusters, by household income, November 2010
                                                                                                                                                                        • Figure 64: Convenience food clusters, by race, November 2010
                                                                                                                                                                        • Figure 65: Convenience food clusters, by Hispanic origin, November 2010
                                                                                                                                                                      • Cluster methodology
                                                                                                                                                                      • Appendix—Trade Associations

                                                                                                                                                                        Companies Covered

                                                                                                                                                                        • American Petroleum Institute (API)
                                                                                                                                                                        • Bureau of Economic Analysis
                                                                                                                                                                        • Burger King Corporation
                                                                                                                                                                        • Casey's General Stores Inc
                                                                                                                                                                        • CITGO Petroleum Corporation
                                                                                                                                                                        • ConocoPhillips
                                                                                                                                                                        • Cumberland Farms, Inc
                                                                                                                                                                        • Dunkin' Brands
                                                                                                                                                                        • Federal Trade Commission
                                                                                                                                                                        • Food Distributors International
                                                                                                                                                                        • Food Marketing Institute
                                                                                                                                                                        • Grocery Manufacturers of America (GMA)
                                                                                                                                                                        • International Food Service Executives Association (IFSEA)
                                                                                                                                                                        • International Foodservice Distributors Association (IFDA)
                                                                                                                                                                        • International Foodservice Manufacturers Association (IFMA)
                                                                                                                                                                        • International Franchise Association (IFA)
                                                                                                                                                                        • Krispy Kreme Doughnuts Inc.
                                                                                                                                                                        • McDonald's Corporation
                                                                                                                                                                        • National Automatic Merchandising Association (NAMA)
                                                                                                                                                                        • National Restaurant Association (NRA)
                                                                                                                                                                        • Petroleum Marketers Association of America (PMAA)
                                                                                                                                                                        • Pizza Hut Inc
                                                                                                                                                                        • Research In Motion (USA)
                                                                                                                                                                        • Sheetz, Inc
                                                                                                                                                                        • Society of Independent Gasoline Marketers of America (SIGMA)
                                                                                                                                                                        • Speedway SuperAmerica
                                                                                                                                                                        • Starbucks Corporation
                                                                                                                                                                        • Sunoco, Inc.
                                                                                                                                                                        • The Kroger Co.
                                                                                                                                                                        • The Pantry Inc
                                                                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                                                                        • Ubisoft (USA)
                                                                                                                                                                        • Valero Energy Corporation
                                                                                                                                                                        • Walgreen Co
                                                                                                                                                                        • Walmart Stores (USA)
                                                                                                                                                                        • Wawa, Inc

                                                                                                                                                                        Convenience Store Foodservice - US - March 2011

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