Foodservice Flexibility

Few items that c-stores carry personify the industry’s mission more fully than sandwiches and wraps:  convenient, colorful, fast, tasty, inexpensive and full of impulse-sale potential. But the fact that consumers can also find them everywhere—from Wal-Mart and Barnes & Noble to Starbucks and every local grocery and convenience store in between—means operators have to get creative and savvy with menu planning and marketing.

Chicago-based Technomic Information Service’s Sandwich Consumer Trend Report, released earlier this year, confirmed that Americans are looking for “new and unique ingredient offerings, flavors and combinations.” Among its findings:

• Bold flavor profiles and the use of artisan and premium breads, ingredients and sandwich spreads are growing trends in sandwich differentiation. The sandwich concept itself allows for a great deal of innovation as well as portability to meet the needs of consumers on the go.

• The sandwich segment is appealing to health-conscious consumers through offering high-quality, fresh, local and organic ingredients. Consumer interest in healthy sandwich ingredients continues to grow, with 44% of consumers wanting sandwiches made with locally-grown ingredients and 30% with organic ingredients.

Lydia and Al
Manley’s Mighty Mart in Binghamton, NY, offers a pair of sandwich concepts in its 23 stores—Lydia’s Gourmet and Big Al’s Sandwich Construction Co.—each designed for a different mission.

Big Al’s is a brand new boxed-lunch program, also offering sub sandwiches with fresh sliced Dietz & Watson deli meats and cheeses by the pound, as well as pizza and wings. The program is only in place at two locations, the chain’s largest.
“We make gourmet sandwiches fresh for a customer as he waits,” said Jack Brayton, president of Manyley’s. The menu carries an assortment of hard rolls, wraps and 6- and 12-inch subs, including roast beef, turkey, ham, Italian combos, chicken salad, chicken parmesan, grilled chicken, sausage with peppers and onions, Philly cheese steak and chicken cheese steak.

The Lydia’s program, on the other hand, offers sandwiches made in Manley’s own commissary kitchen, and is available in all of the chain’s stores. Lydia’s selection includes choices like a chicken salad wedge, Italian sub, turkey sub, ham and American wedge, tuna salad wedge, egg salad wedge and ham sub.

The boxed-lunch program also targets the local business community. “There is some potential growth there,” Brayton said. “But the most growth we’re going to see throughout the stores will be from our Lydia’s program.”

The made-to-order Al’s sandwiches command a higher price point selling for $6.99, while the Lydia’s sandwiches go for $4.99 including a bag of chips and a drink. The stores also offer three Manley’s Deli Combos, all priced at $4.99. They include a turkey club, Philly cheese steak or chicken Caesar wrap sandwich with a 16-ounce fountain beverage or 12-ounce can with fries or fruit.

Primo and Rachel
Like Manley’s, L.E. Belcher, Inc., which owns and operates a seven-unit chain of gas stations and convenience stores in western Massachusetts and Connecticut, also offers a pair of sandwich concepts.

One is what Paul Morrissey, manager of retail marketing, called a “spin-off” of Subway, called Sub Primo, which has been in place for nearly two years at two of its locations. The other sandwich concept, called Rachel’s, consists of sandwiches pre-made by its distributor, J. Polep Distribution Services in Chicopee, Mass. It’s offered in the chain’s remaining five locations.

In all, Belcher serves 20 varieties of sandwiches, with an average retail price of $3.19. To market its sandwiches, Belcher’s stores have given away free samples to area businesses, in-store and at the pump. It has also used billboards and direct-mail value-pack coupons.

Competition fromSubway, ironically, has also hurt the Primo sandwich program. “One of the locations with Primo has a Subway unit maybe half a mile down the street. Right now we’re looking for something different that can fit in that space,” Morrissey said.

Competition is also coming from inside his stores. “The good majority of our stores have Dunkin’ Donuts in them, and that business is cannibalizing sandwich sales,” Morrissey said. “Rachel’s will probably stay. Most of our stores are quite a distance apart, and most of them aren’t even equipped to make sandwiches, so replacing Polep’s commissary production is not feasible.”

Morrissey admitted he has not seen the kind of return on the Sub Primo program that they’d hoped for. “We’d felt that if Subway could do it, we could do it,” he explained. “However, we don’t have the advertising dollars that Subway has. It’s not a replacement.”

As a result, he continued, “I think we’re going to be killing the Sub Primo concept. Labor costs are outrageous. We’re spending more on payroll dollars than we’re generating in sales.” At present, the chain is planning on replacing the sandwich brand with any of several QSR concepts, including Taco Bell and KFC.

Morrissey advises fellow c-store operators to “just make sure your sandwich program is the right fit. I think the best thing to do would be to try the sandwiches that are pre-made from a commissary before you go and invest in your own concept idea, or go with something that is nationally recognized.”

Improving Sales
Jerry Smith, general manager of retail for Express Convenience Centers (ECC), a division of U.S. Oil Co. Inc., in Combined Locks, Wis., is looking for ways to maximize foodservice profits.

ECC is, according to Smith, “working heavily” on its Deli Express hot-sandwiches-to-go concept. The sandwiches are prepared for the chain from scratch by a local supplier, Kitchen Fresh Foods in Green Bay, Wis. They come in frozen and heated and served or held in warmers.

Cold sandwiches are merchandised in-store inside open-air coolers. “That has been a real large push for us,” Smith said. Sandwich prices range from $1.79 to $4.19 for the “gourmet” sandwich.

ECC holds four leases on national sandwich brands. Smith said the company will go in a different direction when the leases expire. “Once you take the lease and then start subtracting your lost fountain soda sales and lost salty snack sales revenue is lower than it otherwise might be,” he said. “Either I would lease the space to someone else or go ahead and replace it with a program that we would actually run ourselves. We would just as soon run the programs in the future, versus having someone else come in and shrink our business and the rest of a convenience store.” 

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