For a company whose foodservice strategy started out as “fry it, box it and hope they buy it,” Kwik Chek Food Stores (Bonham, TX) has come a long way.
About 12 years ago Kwik Chek realized it had to get serious about food, so it signed on as a Hot Stuff Pizza franchisee. (Today the chain has 11 Hot Stuff Pizzas and four Mean Gene hamburger units.) It also began developing its own proprietary KC Grill in 15 stores, with popular foods like quesadillas and regional favorites like Southwest chicken salad, featuring fried tortilla strips served with spicy honey mustard. But the company lacked a food presence in one key area: sandwiches.
“We like to think of our foodservice concepts as hitting almost all spectrumsof the QSR board without spreading ourselves too thin,” says Kevin Smartt, presidentof the 30-store chain. “Deli was the one offer our stores weren’t really makingthe most of. Apart from a single Subway, we had a sub program where a thirdparty would deliver sandwiches on a bi-weekly basis and pick up outdated product.We had a lot of waste with it and it wasn’t really grabbing our customers’ attention.Since we already had adequate labor with our pizza and grill programs, we wantedto enhance our sub offer without having to worry about adding manpower.”
At about the same time, Hot Stuff Foods was looking for a c-store chain to pilot its Hot Stuff Foods Market Selects gourmet sandwiches. Smartt had already given pre-made sandwiches a shot in his store, but one bite—from a six-day-old sandwich, no less—made him reconsider.
“We have had a long-standing relationship with Hot Stuff, and they know we pride ourselves on trying new things,” says Smartt. “So when they were ready to show us the Hot Stuff Foods Market Selects program, they purposely brought a six-day-old product to show the quality. We looked at the packaging and sampled the product and knew right away it would be far superior to what we had been bringing to the table.”
Smartt says the Market Selects meats are a higher quality than anything he’s ever tasted in a pre-made sandwich, but it’s the bread that sets it apart and gives it an upscale flavor. The line’s most popular sandwich varieties include Honey Ham & Cheese on Pecan Bread, Italian Club on Sun-Dried Tomato and Peppered Turkey & Swiss on Whole Wheat Sub Roll.
Smartt was satisfied with the Market Selects product,but he still wanted to make sure it would draw customers without being a drainon his staff.
“As toasted subs were growing more popular, we knew that was something we wantedto move toward,” he says. “The Market Selects program gave us the opportunityto offer a Subway or Quiznosquality product, but it also gave us a chance tooffer a toasted sub when we partner it with our Hot Stuff Pizza program. Thecustomer simply takes the sandwich to the Hot Stuff counter and asks to haveit toasted; there’s a decal on the packaging that even suggests it. The productis run through the pizza conveyor at no charge and the customer has a wholenew product.”
The other benefit of toasting the subs is that it extends the shelf life of an already long-lasting product. This feature has virtually eliminated waste for Kwik Chek. The product is set to expire after seven days thanks to proprietary technology developed by Hot Stuff Foods that lengthens the shelf life and enhances the flavor. On the seventh day, the chain runs the near-expired sandwiches through the oven and offers them as the “Hot Fresh Sub of the Day.”
Since introducing this program, Kwik Chek has sold thousands of sandwicheswith only three—yes, three—going to waste. Smartt attributesthat figure to associates not properly checking the dates, a mistake that wasquickly corrected and hasn’t been repeated since.
The Hot Stuff Foods Market Selects program has had a tremendous effect on Kwik Chek’s foodservice sales. On average, stores saw a 20% increase in sandwich sales for the 11 Hot Stuff stores; some enjoyed a 50% increase. Kwik Chek makes a 50% gross profit margin on the items that retail for $3.29 (a deli sandwich) to $3.69 (a sub). Kwik Chek has also kept a close eye on sales of its pizza and proprietary grill programs. So far, Market Selects sandwiches have not cannibalized any of those sales.
Currently, Hot Stuff delivers the sandwiches only to Kwik Chek stores that have a Hot Stuff Pizza program, but Kwik Chek is working through its wholesaler to get the product delivered to non-Hot Stuff stores, as well. The chain hopes to implement the program into another 15 stores in the next couple of months.
Market Selects’ food prep is minimal. The product comes in frozen, and associates simply remove sandwiches from the freezer to thaw for 24 hours, place them in the final packaging and display them in the merchandisers for customers.
“It’s a huge plus for us that this program doesn’t require any additional labor,”says Smartt. “The Market Selects line is a nice addition to our foodservicerepertoire without breaking our people’s backs. [The program] also lets us increaseour flavor profile while still not spreading ourselves too thin.”
Kate Quackenbush, Managing Editor
Term of themonth: sub-off
Everyone struggles with drive-offs— customers who pull away fromthe pump without paying for the gas their cars consumed. But at leastone convenience retailer contends with a distant cousin of the drive-off:the sub-off.
The term, coined by Sheetz Inc. Vice President-Marketing Bill Reilly,was birthed during Sheetz’s testing of a touchscreenordering technologyjust a few steps away from the MPDs—giving customers something todo for the two to three minutes they’re filling up.
At a handful of the more than 300 stores operated by Altoona, PA-basedSheetz, customers can navigate through a series of screens to order froma fixed menu of sandwiches, salads and other food items from Sheetz’sfamous Made-To-Order program. (Sheetz doesn’t permit “special orders”at the pump since there’s no communication conduit between associatesand customers.)
Reilly, who spoke about the technology developed by Radiant Systems atlast month’s National Restaurant Association Show in Chicago, initiallyworried that the number of customers driving away without stopping insidethe store to pick up and pay for their food would skyrocket. Hence theterm sub-off. Fortunately, according to Reilly, the sub-off problem hasn’tbeen much of a problem at all.
Currently, Order at the Pole technology does not tie to the CRINDs, soeven if customers pay by credit, they still must go inside the store tocomplete their orders. Reilly says time savings is the technology’s mainbenefit; by the time the customer finishes topping off the tank, the foodorder is usually ready to be picked up and paid for.
But the day when such purchases are tied to fuel purchases is not faroff, according to Mike Finley, vice president of global product marketingfor Radiant Systems. He says customers soon will not have to leave thepump to order and purchase food and other in-store items.
“It’s human nature; if you have to do two things at once, you will beless likely to do it,” he says. “The fueling experience is the most miserableexperience in retail: It’s a hazardous environment, there are multipleinstructions, it’s not interactive, and they spend that whole time watchingnumbers go up. The key is to take that moment when the customer is miserableand make it a positive experience.”
Finley sees technologies like Order at the Pole eventually being implementedinto the pump and tied directly to fuel