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Convenience Store Foodservice - US - March 2019

Covered in this report

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, in easily accessible locations. The majority of convenience stores also sell motor fuel.

According to the NACS (National Association of Convenience Stores), common characteristics of convenience stores include:

  • 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

Note: Sales data in this report includes foodservice sales only and excludes sales of retail products, eg CPG (consumer packaged goods) and sales of gasoline. Foodservice outlets that are franchised and/or operated by third parties, such as a Subway operating in a c-store, are also excluded from the market size

"C-store foodservice sales reached an estimated $39.2 billion in 2018, up 33.2% from 2013. While c-store foodservice experienced strong growth in the past, Mintel forecasts growth will start to slow, with sales reaching an estimated $48.1 billion by 2023."
- Jill Failla, Foodservice Analyst

This report looks at the following areas:

  • Foodservice is not a top c-store traffic driver
  • C-stores are not keeping up with competitors
  • C-stores are not top of mind for dinner

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Figure 1: Total US sales and fan chart forecast of c-store foodservice sales, at current prices, 2013-23
        • The issues
          • Foodservice is not a top c-store traffic driver
            • Figure 2: Convenience store visitation drivers, December 2018
          • C-stores are not keeping up with competitors
            • Figure 3: Convenience store foodservice attitudes, December 2018
          • C-stores are not top of mind for dinner
            • Figure 4: Convenience store foodservice consumption – Any item NET, December 2018
          • The opportunities
            • Invest in customer-facing employees
              • Figure 5: Convenience store loyalty drivers, December 2018
            • Off-premise business may recoup foodservice sales
              • Figure 6: Convenience store foodservice concept interest, by race and Hispanic origin, December 2018
            • Boost health and quality perception with natural/organic options
              • Figure 7: Convenience store foodservice attitudes, by race, Hispanic origin, and generation, December 2018
            • What it means
            • The Market – What You Need to Know

              • C-store foodservice sales recover in 2018
                • C-store competition is fiercer than ever
                  • 7-Eleven sees foodservice sales slip
                  • Market Size and Forecast

                    • C-stores foodservice growth rate hits 10-year low in 2017
                      • Figure 8: Total US sales and fan chart forecast of c-store foodservice sales, at current prices, 2013-23
                      • Figure 9: Total US convenience store foodservice sales and forecast, at current prices, 2013-23
                  • Market Breakdown

                    • Prepared foods continue to drive foodservice sales overall
                      • Figure 10: Total US convenience store foodservice sales and forecast, by segment, at current prices, 2013-23
                      • Figure 11: Total US convenience store foodservice sales and forecast, by segment, at current prices, 2013-23
                    • 7-Eleven foodservice sales slip
                        • Figure 12: Top 200 c-store chain foodservice sales, 2015-2017
                    • Market Perspective

                      • LSR (limited service restaurant) competition is fierce
                        • Figure 13: Top 200 LSR & C-Store^ percentage change in sales over prior year, 2017
                      • Coffee segment sees seismic shifts
                        • Restaurants increasingly cut into retail
                          • New c-stores saturate a crowded market
                            • Figure 14: Sandwich section in a Chicago Amazon Go store
                            • Figure 15: Breakfast section in a Chicago Amazon Go store
                        • Market Factors

                          • Higher gas prices may hurt foodservice sales
                            • Figure 16: US gasoline and diesel retail prices, January 2007-January 2019
                          • Electric car unit growth rate more than doubles between 2017-2018
                            • Figure 17: Total US volume sales of hybrid and electric cars^, 2015-18
                        • Key Players – What You Need to Know

                          • More dollars dedicated to foodservice
                            • Better-for-you beverages arrive at c-stores…slowly
                              • Delivery will be a must for convenience-centered brands
                              • What’s Working?

                                • Reinvesting in foodservice with store overhauls, revamps
                                  • Better beverage developments proliferate
                                    • The anti-soda beverage set
                                      • Cold brew wars
                                        • More premium and sustainable coffee
                                          • Fresher snacking
                                          • What’s Struggling?

                                            • Food safety issues run amok
                                              • What are some of the ways c-stores can prevent foodborne illness going forward?
                                                • Healthy and ethical eats roll out…at a slow pace
                                                • What’s Next?

                                                  • Natural and organic upscale c-stores carve out a niche
                                                    • C-stores must move business off premise to compete
                                                      • Alcohol will differentiate c-store experience
                                                        • Figure 18: 7-Eleven wine display
                                                    • The Consumer – What You Need to Know

                                                      • Foodservice is not a top traffic or loyalty driver for c-stores
                                                        • C-stores have a lagging health perception
                                                          • Heaviest c-store users want more off-premise options
                                                            • Young parents are key c-store customers
                                                            • Convenience Store Visitation Frequency

                                                              • C-store customers are extremely habitual
                                                                • Figure 19: Convenience store visitation frequency, December 2018
                                                              • Young parents are key c-store customers
                                                                • Figure 20: Convenience store visitation frequency, by CHAID analysis, December 2018
                                                              • Men are core c-store users
                                                                • Figure 21: Convenience store visitation frequency, by gender, December 2018
                                                              • Lower-income consumers are most frequent c-store customers
                                                                • Figure 22: Convenience store visitation frequency, by household income, December 2018
                                                              • Black and Hispanic consumers are heaviest c-store users
                                                                • Figure 23: Convenience store visitation frequency, by race and Hispanic origin, December 2018
                                                            • Convenience Store Visitation Drivers

                                                              • Location and price of gas are top reasons people choose their c-store
                                                                • Figure 24: Convenience store visitation drivers, December 2018
                                                              • Older consumers prioritize convenience highest when choosing c-stores
                                                                • Figure 25: Convenience store visitation drivers – Any rank NET, by generation, December 2018
                                                              • Hispanics prioritize food and beverage more than others do when choosing a c-store
                                                                • Figure 26: Convenience store visitation drivers – Any rank NET, by race and Hispanic origin, December 2018
                                                              • Lower-income consumers prioritize packaged food and beverages at c-stores
                                                                • Figure 27: Convenience store visitation drivers – Any rank NET, by household income, December 2018
                                                            • Convenience Store Loyalty and Loyalty Drivers

                                                              • Nearly half of consumers are loyal to one convenience store brand
                                                                • Figure 28: Convenience store loyalty, December 2018
                                                              • Prepared foods and beverages are not top loyalty drivers
                                                                • Figure 29: Convenience store loyalty drivers, December 2018
                                                              • Prepared food and beverages are less important to c-store loyalty today than they were a year ago
                                                                • Figure 30: Convenience store loyalty drivers, January 2018-December 2018
                                                              • Food and beverages drive c-store loyalty for higher-income consumers
                                                                • Figure 31: Convenience store loyalty drivers, by household income, December 2018
                                                              • More women than men are loyal to c-stores because of prepared foods
                                                                • Figure 32: Convenience store loyalty drivers, by gender, December 2018
                                                            • Convenience Store Food and Beverage Consumption

                                                              • Packaged food items and self-serve drinks are top purchases at c-stores
                                                                • Figure 33: Convenience store food and beverage consumption, December 2018
                                                              • Beverages are central to c-stores’ food and drink programs
                                                                • Figure 34: Convenience store food and beverage consumption NETS, December 2018
                                                              • Younger consumers are heaviest users of c-store food and beverages
                                                                • Figure 35: Convenience store food and beverage consumption, by age, December 2018
                                                              • White consumers overindex for c-store beverages and underindex for foods
                                                                • Figure 36: Convenience store food and beverage consumption, by race and Hispanic origin, December 2018
                                                            • Convenience Store Foodservice Consumption

                                                              • C-store foodservice is not top-of-mind for dinner
                                                                • Figure 37: Convenience store foodservice consumption – any item NET, December 2018
                                                              • Coffee and sandwiches are most consumed c-store foodservice items
                                                                • Figure 38: Convenience store foodservice consumption – any daypart NET, December 2018
                                                              • C-store baked goods are consumed more for snacks than breakfast
                                                                • Figure 39: Convenience store foodservice consumption, by correspondence analysis, December 2018
                                                              • Men are higher c-store foodservice users overall
                                                                • Figure 40: Convenience store foodservice consumption – Any item NET, by gender, December 2018
                                                              • Younger consumers overindex in purchasing a variety of c-store foods
                                                                • Figure 41: Convenience store foodservice consumption – Any daypart NET, by generation, December 2018
                                                              • Black and Hispanic consumers are heavier c-store foodservice users than White consumers
                                                                • Figure 42: Convenience store foodservice consumption – Any daypart NET, by race and Hispanic origin, December 2018
                                                            • Convenience Store Foodservice Concept Interest

                                                              • Limited/seasonal and customizable coffee options are fairly expected c-store offerings
                                                                  • Figure 43: Convenience store foodservice concept interest, December 2018
                                                                • Offering limited/seasonal, customizable coffee, and delivery service could appeal to a majority of c-store consumers
                                                                  • Figure 44: Convenience store foodservice concept interest, by TURF analysis, December 2018
                                                                • Men aged 35-54 care the most about family meals at c-stores
                                                                  • Figure 45: Convenience store foodservice concept interest, by age and gender, December 2018
                                                                • Young women prioritize c-store online ordering options
                                                                  • Figure 46: Convenience store foodservice concept interest, by age and gender, December 2018
                                                                • Black and Hispanic consumers are most interested in online ordering and delivery from c-stores
                                                                  • Figure 47: Convenience store foodservice concept interest, by race and Hispanic origin, December 2018
                                                              • Convenience Store Foodservice Attitudes

                                                                • Only 15% of consumers are satisfied with c-stores’ healthy prepared food options
                                                                  • Figure 48: Convenience store foodservice attitudes, December 2018
                                                                • C-stores are more likely to draw men than women away from fast food competitors
                                                                  • Figure 49: Convenience store foodservice attitudes, by gender, December 2018
                                                                • Gen Zers are least likely to find c-stores more convenient than fast food
                                                                  • Figure 50: Convenience store foodservice attitudes, by generation, December 2018
                                                                • Hispanic consumers want more natural and organic c-store options
                                                                  • Figure 51: Convenience store foodservice attitudes, by race and Hispanic origin, December 2018
                                                                • Rural c-store customers have seen the most improvement over the years
                                                                  • Figure 52: Convenience store foodservice attitudes, by area, December 2018
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Sales data
                                                                    • Fan chart forecast
                                                                      • Consumer survey data
                                                                        • Abbreviations and terms
                                                                          • Abbreviations
                                                                            • Terms
                                                                            • Appendix – The Market

                                                                                • Figure 53: Total US convenience store foodservice sales and forecast, at inflation-adjusted prices, 2013-23
                                                                            • Appendix – The Consumer

                                                                              • CHAID Analysis
                                                                                • Methodology
                                                                                  • Figure 54: C-store visitation – CHAID – Table output, December 2018
                                                                                • Correspondence Analysis
                                                                                  • Methodology
                                                                                    • TURF Analysis
                                                                                      • Methodology
                                                                                          • Figure 55: Table –TURF Analysis – C-store concept interest, December 2018

                                                                                      Convenience Store Foodservice - US - March 2019

                                                                                      US $4,395.00 (Excl.Tax)