When The NPD Group released findings last month on a study of consumer trends in the struggling restaurant industry, particularly the industry’s dwindling lunch and dinner traffic, NPD Vice President Harry Balzer boiled the results down to raw basics.
"Make no mistake," Balzer said, "Americans don’t want to cook. We’re just trying to figure out how to put food on the table the easiest and cheapest way possible. With restaurant meals costing three times that of in-home meals, the question is, ‘Who will do the cooking?’"
The same day Balzer posed that question, c-store powerhouse Wawa Inc. was answering it when the company announced it was rolling out its new dinner-deals campaign at all 570 of its stores in five states.
"Our new dinner deal is a great way to let our customers know that Wawa is an excellent option for dinner that provides exceptional value, quality and convenience," said Howard Stoeckel, Wawa’s president and CEO.
The NPD restaurant study explored restaurant consumers’ behavior during the five economic downturns from 1979 to 2008. Bonnie Riggs, who headed the study for NPD, found the restaurant industry posted no organic growth in 2007 and said, "that it is going to take a an awful lot of resources," for a company like Wawa to pick up the dinner daypart’s topsy-turvy market share. In fact, Riggs found that restaurants’ dinner-occasion sales declined by 2% last year, largely because consumers are preparing more meals at home.
However, if Wawa is successful with its dinner push, it stands to gain an enormous advantage over its foodservice competitors, restaurant or c-store.
Beyond affordability, there were other crucial factors for the dinner sales shrinkage reported by the restaurant industry. Chief among them was consumers’ interest in healthier and better quality food. A separate study last month by foodservice consultant Technomic Inc., a Chicago-based research group, found 85% of consumers are eating at home more often, either cooking meals on their own or sourcing prepared meal solutions from various food retailers.
The Technomic study added: "Independent and fast-food retailers are being used as substitutes for casual dining by over one-third of respondents."
Affordability and Convenience
The consumer shift toward affordability, convenience and nutrition isn’t limited to prepared foods. A February 2008 IRI study showed consumers want healthier foods even when purchasing packaged, particularly functional items containing specific ingredients to foster specific health benefits.
Riggs said c-stores aren’t typically seen as a viable option for the dinner daypart, especially since breakfast has been the industry’s primary focus over the last three or so years. The same holds true for quick-service restaurants (QSRs), 61% of which reported their breakfast daypart accounted for the largest portion of sales in the past two years, according to a National Restaurant Association (NRA) study. Lunch was a distant second (32%), followed by dinner (22%).
"That’s where the growth opportunities are," Riggs said of c-stores’ breakfast offerings.
Companies like Wawa may be banking on the possibility that c-stores can absorb the runoff of consumers who are avoiding restaurants during the dinner daypart. By offering something casual eateries or upscale restaurants can’t—affordability and convenience—c-stores can become a viable dinner option for on-the-go shoppers.
Given a broad view of the recent foodservice studies, c-stores would do well to place added emphasis on the healthy aspects of their foodservice programs. The Wawa dinner deals campaign centered on convenience, affordability, quality and value, but nary a word was spoken about any potential health benefits.
In the current market, convenience stores have something else working in their favor for the first time in decades. After years and years of increasing the miles they drive, consumers are now cutting back on their driving for the first time since 1979, Riggs said.
"Convenience stores had a good year," Riggs said. "They’ve benefited somewhat from the one-stop shopping."
When it comes to foodservice, however, companies like Wawa are hoping consumers make them a one-stop shop at least twice a day.
"So many of our customers rely on our coffee and breakfast offer to begin their day right, and we are confident our dinner offer will help our customers conclude their days with the same sense of ease and satisfaction," Stoeckel said.