Competition and Quick Foodservice

Consumers have a need for convenient, quick, high-quality pre­pared foods. As traditional convenience store (c-store) products slip in demand, c-store operators must place a stronger empha­sis on prepared foods to improve profits. A growing number of c-store chains are providing high-quality, quick food supported by appealing, food-forward marketing. For quick-service restaurants (QSRs), this means many c-stores are now direct competitors.

Grocery stores are also focusing on prepared foods. Gro­cery retailers were once very different from restaurants, serv­ing customers’ needs for in-home meal preparation. But today, prepared, ready-to-eat meals and snacks are readily available in this channel. Grocery stores’ prepared meals offer quality and are growing in variety.

C-stores and grocery stores, historically different, now compete in the same space as traditional QSRs for the same customer and the same occasion. Most customers use multiple channels to purchase food for immediate consumption. Fewer than one in four U.S. consumers are exclusive QSR users for these meal occasions. Those who are exclusive QSR customers are just as likely to dine in or take away as other QSR users. Off-premise visits made by exclusive QSR buyers are likely vulnerable to shifts to other channels. The extent of the cus­tomer-sharing, as seen through NPD research, demonstrates the channel blurring happening among retail and traditional quick foodservice segments.

Quick and convenient food from c-stores and grocery stores incrementally adds customers to the fast food/foodser- vice market. Further, the number of fast-food purchases made by customers using these outlets is more than six visits higher in an average four-week period. Traditional QSRs offering morn­ing meals are most likely to feel the impact of c-stores on their customer base. These occasions are likely in-and-out, grab-and- go visits where convenience and fast service trump QSR chain preference.

Between-meal purchases/snacks is another competitive time of the day. C-stores hold their highest share of these product categories: coffee, snacks, breakfast foods, and soft drinks. Prod­uct offerings vary, with some c-store chains emphasizing pre­pared foods more than others. Grocery stores hold a high share of purchases of chicken, side dishes, and salads. They provide a ready-to-consume meal for the family —easy, convenient, and an opportunity to meet the needs of multiple family members.

Retail foodservice at c-stores and grocery stores is growing and expected to continue to grow. This growth delivers new and very different insights about the structure of the quick food- service market from a consumer perspective. Consumers have a need for convenient, quick, high-quality prepared foods and whichever channel fills that need is where they will visit.

The challenge for all retailers offering quick-serve food is to find the best way to stand out among a diverse set of competi­tors in order to grow market share. Figures 1 through 3 provide more information on the competitive battle. Note: Wawa is a c-store chain.

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.

One thought on “Competition and Quick Foodservice

  1. graliontorile says:

    Hello just wanted to give you a quick heads up. The text in your article seem to be running off the screen in Internet explorer. I’m not sure if this is a formatting issue or something to do with internet browser compatibility but I thought I’d post to let you know. The style and design look great though! Hope you get the issue solved soon. Cheers

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