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Convenience Store Foodservice - US - March 2014

“Convenience stores today have to perform a tricky balancing act in regards to foodservice: consumers are asking for healthy options, an array of foods and beverages, freshly made sandwiches and entrees, and indulgent treats, all while still providing quick service at a low price. Operators will need to focus on broad appeal – making sure every customer can find something they crave within their walls.”

– Katrina Fajardo, Foodservice Analyst
 
Some questions answered in this report include:
  • Can convenience stores change the way consumers view the channel?
  • How do convenience stores provide both healthy and indulgent foods?
  • How to expand foodservice operations, without compromising convenience?

Convenience stores have emerged as a competitive player in the foodservice scene, as many stores have refocused their sales strategies toward fresh, made-to-order foods and beverages. Mintel reports approximately 58% of adults aged 18+ have visited a convenience store for food and beverage items during the last three months. However, white space still remains.

Consumers are asking for fresher foods with healthier halos, along with an expansive beverage program, but still desire indulgent foods at a low price. Operators need to strike the right balance in order to attract new customers while retaining their core. With an estimated 34% sales growth from 2013-18, market share remains an uphill battle for all involved.

This report builds on the analysis presented in Mintel’s Convenience Store Foodservice—US, February 2013, as well as the March 2012 and March 2011 reports of the same title.

For the purposes of this report, Mintel defines convenience stores as establishments that retail a limited line of goods, primarily groceries and ready-to-consume beverages and snacks, and are in easily accessible locations. The majority of convenience stores also sell motor fuels.

According to the National Association of Convenience Stores, common characteristics of convenience stores are:

  • Building size of less than 5,000 square feet
  • Stock of at least 500 stock-keeping units (SKUs)
  • Off-street parking and/or convenient pedestrian access
  • Extended hours of operation, with many open 24 hours a day, seven days a week

This report includes food and beverage sold as “freshly” prepared or made-to-order. The report does not include retail/grocery food items such as packaged food, candy bars, bottled sodas, etc.

Value figures throughout this report are at retail selling prices (rsp) excluding sales tax, unless otherwise stated.

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Table of contents

  1. Scope and Themes

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

                      • The market
                        • Foodservice at convenience stores have posted strong growth
                          • Figure 1: Fan chart of market value for convenience store foodservice sales, at current prices, 2008-18
                        • Market drivers
                          • Key players in the market
                            • Figure 2: Convenience stores where consumers have shopped at in the last four weeks, July 2009-September 2013
                          • The consumer
                            • Customers look for healthy foods, but often give in to indulgent items
                              • Figure 3: Attitudes toward convenience stores, January 2014
                            • Fresh is enticing, but consumers need to see it to believe it
                              • Figure 4: Attributes to drive fresh, foodservice purchases, January 2014
                            • Marketing strategies need to be about the customer’s needs
                              • Figure 5: Effectiveness of promotions for future fresh food purchases, January 2014
                            • What we think
                            • Issues and Insights

                                • Perception: Can convenience stores change the way consumers view the channel?
                                  • The issues
                                    • The implications
                                      • Balance: Providing both healthy and indulgent foods at convenience stores
                                        • The issues
                                          • The implications
                                            • Expanding foodservice operations, without compromising convenience
                                              • The issues
                                                • The implications
                                                • Trend Application

                                                    • Trend: Transumers
                                                      • Trend: Help Me Help Myself
                                                        • Mintel futures: East Meets West
                                                        • Market Size and Forecast

                                                          • Key points
                                                            • Market size insight
                                                              • Sales and forecast of market
                                                                • Figure 6: Total U.S. sales and forecast of market, at current prices, 2008-18
                                                                • Figure 7: Total U.S. sales and forecast of market, at inflation-adjusted prices, 2008-18
                                                              • Fan chart forecast
                                                                  • Figure 8: Fan chart of market value for convenience store foodservice sales, at current prices, 2008-18
                                                              • Market Drivers

                                                                • Key points
                                                                  • Consumers are still cautious with spending
                                                                    • Health concerns are top of mind with convenience store consumers
                                                                      • The ever-changing face of America will also change convenience stores
                                                                        • Figure 9: US population by race and Hispanic origin, 2009, 2014, and 2019
                                                                      • Shifting demographics will create more opportunities at convenience stores
                                                                        • Figure 10: US population, by age, 2009, 2014, and 2019
                                                                    • Innovations and Innovators

                                                                      • Big box retailers are getting into convenience store game
                                                                        • Convenience stores are expanding their fresh offerings
                                                                          • Convenience stores are renovating their locations and offerings to keep up with on-the-go consumers
                                                                            • Healthier, high-quality, and better-for-you fare at convenience stores
                                                                            • Competitive Context

                                                                              • Key points
                                                                                • Grocery stores
                                                                                  • Quick-service restaurants
                                                                                    • Fast casual restaurants
                                                                                      • Pharmacy chains
                                                                                      • Major Convenience Store Brands

                                                                                          • Figure 11: Convenience stores where consumers have shopped at in the last four weeks, July 2009-September 2013
                                                                                        • 7-Eleven
                                                                                            • Figure 12: Items purchased, by brand usage, January 2014
                                                                                            • Figure 13: Frequency of beverage purchases at convenience stores – Frequent purchasers, by brand usage, January 2014
                                                                                          • Circle K
                                                                                            • Speedway
                                                                                              • Wawa
                                                                                                • Figure 14: Items purchased, by brand usage, January 2014
                                                                                              • Casey’s General Store
                                                                                                • Figure 15: What consumers order at convenience stores, by brand usage, January 2014
                                                                                              • am/pm
                                                                                              • Marketing Strategies

                                                                                                • Overview
                                                                                                  • Redefining convenience
                                                                                                    • Pak-a-Sak: Doing drive-thru right
                                                                                                      • Figure 16: Pak-a-Sak, Doing Drive Thru Right, 2012
                                                                                                    • Foodservice expansions through vending machines
                                                                                                      • Counting healthy calories at convenience stores
                                                                                                        • 7-Eleven’s breakfast sandwich
                                                                                                          • Wawa offers healthy items less than 500 calories
                                                                                                            • 400 calories keeps growing at Tedeschi Food Shops
                                                                                                              • Unique restaurants within convenience stores are a breath of fresh air
                                                                                                                • Targeting the Hispanic consumer
                                                                                                                  • Figure 17: am/pm, “calacas” ad, 2012
                                                                                                              • Menu Analysis

                                                                                                                • Food purchases at convenience stores
                                                                                                                  • Figure 18: What consumers order at convenience stores, January 2014
                                                                                                                • Top foods menued at convenience stores overview
                                                                                                                  • Figure 19: Top menu items (food) at convenience stores, by incidence, H2 2013
                                                                                                                • Sandwiches at convenience stores
                                                                                                                  • Hot dogs at convenience stores
                                                                                                                    • Breakfast sandwiches at convenience stores
                                                                                                                      • Donuts at convenience stores
                                                                                                                        • Cheeseburgers at convenience stores
                                                                                                                          • Pizza at convenience stores
                                                                                                                            • Beverage purchases at convenience stores
                                                                                                                              • Figure 20: Frequency of beverage purchases at convenience stores, January 2014
                                                                                                                            • Leading beverages menued at convenience stores
                                                                                                                              • Figure 21: Top leading menu items (beverages) at convenience stores, by incidence, H2 2013
                                                                                                                            • Sodas at convenience stores
                                                                                                                              • Coffee at convenience stores
                                                                                                                                • Tea at convenience stores
                                                                                                                                  • Energy drinks
                                                                                                                                    • Juice at convenience stores
                                                                                                                                    • Consumer Data – Overview

                                                                                                                                        • Overall usage of convenience stores, specifically among food/beverage visits
                                                                                                                                            • Figure 22: Reasons for visiting convenience stores, January 2014
                                                                                                                                            • Figure 23: Items purchased, January 2014
                                                                                                                                          • Healthy demands are prevalent for all consumers
                                                                                                                                              • Figure 24: Attitudes toward convenience stores, January 2014
                                                                                                                                              • Figure 25: Important attributes when ordering fresh food/made-to-order items at convenience stores, January 2014
                                                                                                                                            • Consumers want immediate gratification from convenience store incentives
                                                                                                                                              • Figure 26: Effectiveness of promotions for future fresh food purchases, January 2014
                                                                                                                                          • Consumer Data – By Gender

                                                                                                                                            • Key points
                                                                                                                                              • Men are heavier users of convenience stores, while female visits are infrequent
                                                                                                                                                  • Figure 27: Convenience store shopping frequency, by gender, January 2014
                                                                                                                                                  • Figure 28: Any agreement with attitudes toward convenience stores, by gender, January 2014
                                                                                                                                                • Women seek unique menu items and customized promotions
                                                                                                                                                  • Figure 29: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by gender, January 2014
                                                                                                                                                • Men are brand-conscious, while women seek healthy
                                                                                                                                                    • Figure 30: Reasons for foodservice purchase at convenience stores, by gender, January 2014
                                                                                                                                                  • Men often order/desire traditional convenience foods items; salads and frozen yogurt are popular with women
                                                                                                                                                    • Figure 31: What consumers order at convenience stores, by gender, January 2014
                                                                                                                                                    • Figure 32: Frequency of beverage purchases at convenience stores – Frequent purchasers, by gender, January 2014
                                                                                                                                                • Consumer Data – By Income

                                                                                                                                                  • Key points
                                                                                                                                                    • Price is a key influencer for lower and middle income; quality drives higher income
                                                                                                                                                      • Figure 33: Reasons for foodservice purchase at convenience stores, by household income, January 2014
                                                                                                                                                    • Everyone wants fresh, but $100K+ consumers demand it
                                                                                                                                                        • Figure 34: Any agreement with attitudes toward convenience stores, by household income, January 2014
                                                                                                                                                      • $100K+ consumers need more convincing to buy restaurant-quality foods
                                                                                                                                                        • Figure 35: Attributes to drive fresh, foodservice purchases, by household income, January 2014
                                                                                                                                                      • Coffee can be a point of growth for convenience stores
                                                                                                                                                          • Figure 36: Frequency of beverage purchases at convenience stores – Frequent purchasers, by household income, January 2014
                                                                                                                                                      • Consumer Data – By Race

                                                                                                                                                        • Key points
                                                                                                                                                          • Ethnic consumers are heavier users of convenience stores
                                                                                                                                                            • Figure 37: Convenience store shopping frequency, by race/Hispanic origin, January 2014
                                                                                                                                                          • Asians are looking for more from convenience stores
                                                                                                                                                            • Figure 38: Any agreement with attitudes toward convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                          • The price at convenience stores needs to be right for Blacks
                                                                                                                                                            • Figure 39: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by race/Hispanic origin, January 2014
                                                                                                                                                        • Consumer Data – By Hispanics Origin

                                                                                                                                                          • Key points
                                                                                                                                                            • Hispanics utilize all forms of convenience stores
                                                                                                                                                              • Figure 40: Convenience store shopping frequency – Heavy users, by race/Hispanic origin, January 2014
                                                                                                                                                            • Lower prices will keep Hispanics coming to convenience stores
                                                                                                                                                                • Figure 41: Reasons for foodservice purchase at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                              • Beverages are a popular purchase, but health concerns linger with Hispanics
                                                                                                                                                                  • Figure 42: Frequency of beverage purchases at convenience stores – Frequent purchasers, by race/Hispanic origin, January 2014
                                                                                                                                                                  • Figure 43: Reasons for foodservice purchase at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                              • Consumer Data – By Generation

                                                                                                                                                                • Key points
                                                                                                                                                                  • Convenience store usage varies by generation
                                                                                                                                                                    • Figure 44: Convenience store shopping frequency, by generations, January 2014
                                                                                                                                                                  • Baby Boomers need convincing to purchase more MTO foods at convenience stores
                                                                                                                                                                      • Figure 45: Attributes to drive fresh, foodservice purchases, by generations, January 2014
                                                                                                                                                                    • Ethnically diverse generations lead to diverse foods purchases at convenience stores
                                                                                                                                                                        • Figure 46: What consumers order at convenience stores, by generations, January 2014
                                                                                                                                                                      • Health means more to younger generations
                                                                                                                                                                          • Figure 47: Reasons for foodservice purchase at convenience stores, by generations, January 2014
                                                                                                                                                                      • Consumer Data – By Region

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Midwest consumers are not heavy users of convenience stores; the Northwest has positive opinions of their stores
                                                                                                                                                                            • Figure 48: Convenience store shopping frequency – Heavy users, by region, January 2014
                                                                                                                                                                            • Figure 49: Any agreement with attitudes toward convenience stores, by region, January 2014
                                                                                                                                                                          • Organic is important in the West
                                                                                                                                                                            • Figure 50: Reasons for foodservice purchase at convenience stores, by region, January 2014
                                                                                                                                                                        • Consumer Data – By Parents

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Parents want to see healthy options at convenience stores
                                                                                                                                                                                • Figure 51: Any agreement with attitudes toward convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                              • Convenience stores serve as a quick stop shop for parents with younger children
                                                                                                                                                                                  • Figure 52: Innovations/Improvements desired at convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                              • Appendix – Other Useful Consumer Tables

                                                                                                                                                                                • Health and lifestyle
                                                                                                                                                                                    • Figure 53: American adults by weight category as determined by body mass index (BMI), 2008-Oct. 28, 2013
                                                                                                                                                                                  • Childhood and teen obesity – highest in decades
                                                                                                                                                                                      • Figure 54: Prevalence of obesity among children and adolescents aged 2-19, 1971-2010
                                                                                                                                                                                    • Consumer confidence
                                                                                                                                                                                        • Figure 55: University of Michigan’s index of consumer sentiment (ICS), 2007-14
                                                                                                                                                                                      • Racial, ethnic population growth
                                                                                                                                                                                          • Figure 56: US population by race and Hispanic origin, 2009, 2014, and 2019
                                                                                                                                                                                          • Figure 57: Households with children, by race and Hispanic origin of householder, 2013
                                                                                                                                                                                        • Shifting US demographics
                                                                                                                                                                                          • Figure 58: US population, by age, 2009, 2014, and 2019
                                                                                                                                                                                          • Figure 59: US households, by presence of own children, 2003-13
                                                                                                                                                                                        • Major convenience store data
                                                                                                                                                                                          • Figure 60: Reasons for visiting convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 61: Reasons for choosing convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 62: Innovations/Improvements desired at convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 63: Any agreement with attitudes toward convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 64: Reasons for foodservice purchase at convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 65: Reasons for foodservice purchase at convenience stores, by brand usage, January 2014
                                                                                                                                                                                          • Figure 66: Attributes to drive fresh, foodservice purchases, by brand usage, January 2014
                                                                                                                                                                                          • Figure 67: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by brand usage, January 2014
                                                                                                                                                                                        • Consumer data: By gender
                                                                                                                                                                                          • Figure 68: Reasons for visiting convenience stores, by gender, January 2014
                                                                                                                                                                                          • Figure 69: Reasons for choosing convenience stores, by gender, January 2014
                                                                                                                                                                                          • Figure 70: Innovations/Improvements desired at convenience stores, by gender, January 2014
                                                                                                                                                                                          • Figure 71: Any agreement with attitudes toward convenience stores, by gender, January 2014
                                                                                                                                                                                          • Figure 72: Reasons for foodservice purchase at convenience stores, by gender, January 2014
                                                                                                                                                                                          • Figure 73: Attributes to drive fresh, foodservice purchases, by gender, January 2014
                                                                                                                                                                                        • Consumer data: by income
                                                                                                                                                                                          • Figure 74: Convenience store shopping frequency, by household income, January 2014
                                                                                                                                                                                          • Figure 75: Reasons for choosing convenience stores, by household income, January 2014
                                                                                                                                                                                          • Figure 76: Innovations/Improvements desired at convenience stores, by household income, January 2014
                                                                                                                                                                                          • Figure 77: What consumers order at convenience stores, by household income, January 2014
                                                                                                                                                                                          • Figure 78: Reasons for foodservice purchase at convenience stores, by household income, January 2014
                                                                                                                                                                                          • Figure 79: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by household income, January 2014
                                                                                                                                                                                        • Consumer data: By race
                                                                                                                                                                                          • Figure 80: Reasons for choosing convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 81: Innovations/Improvements desired at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 82: Reasons for foodservice purchase at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 83: Attributes to drive fresh, foodservice purchases, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 84: What consumers order at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 85: Frequency of beverage purchases at convenience stores – Frequent purchasers, by race/Hispanic origin, January 2014
                                                                                                                                                                                        • Consumer data: By Hispanic origin
                                                                                                                                                                                          • Figure 86: Reasons for choosing convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 87: Innovations/Improvements desired at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 88: Any agreement with attitudes toward convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 89: Attributes to drive fresh, foodservice purchases, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 90: What consumers order at convenience stores, by race/Hispanic origin, January 2014
                                                                                                                                                                                          • Figure 91: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by race/Hispanic origin, January 2014
                                                                                                                                                                                        • Consumer data: By generation
                                                                                                                                                                                          • Figure 92: Reasons for choosing convenience stores, by generations, January 2014
                                                                                                                                                                                          • Figure 93: Items purchased, by generations, January 2014
                                                                                                                                                                                          • Figure 94: Innovations/Improvements desired at convenience stores, by generations, January 2014
                                                                                                                                                                                          • Figure 95: Reasons for foodservice purchase at convenience stores, by generations, January 2014
                                                                                                                                                                                          • Figure 96: Any agreement with attitudes toward convenience stores, by generations, January 2014
                                                                                                                                                                                          • Figure 97: Frequency of beverage purchases at convenience stores – Frequent purchasers, by generations, January 2014
                                                                                                                                                                                          • Figure 98: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by generations, January 2014
                                                                                                                                                                                        • Consumer data: By region
                                                                                                                                                                                          • Figure 99: Reasons for choosing convenience stores, by region, January 2014
                                                                                                                                                                                          • Figure 100: Innovations/Improvements desired at convenience stores, by region, January 2014
                                                                                                                                                                                          • Figure 101: Reasons for foodservice purchase at convenience stores, by region, January 2014
                                                                                                                                                                                          • Figure 102: Attributes to drive fresh, foodservice purchases, by region, January 2014
                                                                                                                                                                                          • Figure 103: What consumers order at convenience stores, by region, January 2014
                                                                                                                                                                                          • Figure 104: Frequency of beverage purchases at convenience stores – Frequent purchasers, by region, January 2014
                                                                                                                                                                                          • Figure 105: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by region, January 2014
                                                                                                                                                                                        • Consumer data: By parents
                                                                                                                                                                                          • Figure 106: Convenience store shopping frequency, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 107: Reasons for choosing convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 108: Reasons for foodservice purchase at convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 109: What consumers order at convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 110: Frequency of beverage purchases at convenience stores – Frequent purchasers, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 111: Innovations/Improvements desired at convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 112: Reasons for foodservice purchase at convenience stores, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 113: Attributes to drive fresh, foodservice purchases, by parent/guardian with children and age, January 2014
                                                                                                                                                                                          • Figure 114: Effectiveness of promotions for future fresh food purchases – Most effectiveness, by parent/guardian with children and age, January 2014
                                                                                                                                                                                      • Appendix – Trade Associations

                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                        • Walmart Stores (USA)

                                                                                                                                                                                        Convenience Store Foodservice - US - March 2014

                                                                                                                                                                                        £3,277.28 (Excl.Tax)