As foodservice becomes an increasingly important c-store offering for driving traffic, retailers face an important question: Partner with a with a known QSR that offers brand recognition and a proven track record, or invest the time and energy to build a program from the ground up.
Branded fast food offerings are especially helpful because the programs are run by companies with years of experience in the industry. Plus, brands can track trends and determine the best menu options for a specific customer-base, leaving operators with more time to concentrate on other areas of the store. It can also help a c-store compete with nearby QSR locations that pull daypart business from their store.
When Des Moines, Iowa-based Keck Oil, was looking to add a fast food add-on to its Petropointe BP station, the company knew Burger King and Wendy’s wouldn’t work because a McDonald’s down the street already was meeting the demand for value-menu hamburgers. Instead, the chain branded with Maid-Rite to appeal to customers looking for an upscale sandwich option.
Mark Meyer, president of Keck Oil, said having a unique fast food program has helped drive customer loyalty. “If somebody wants something different from a hamburger, they’re going to come to our place,” Meyer said. He added that Maid-Rite allowed his store to add an established QSR program without a high initial investment cost and with reasonable franchise fees, plus it appealed to his customer base and drove traffic at the store.
Finding the Right Fit
It’s important to remember that since all store locations are different, the potential profitability of a food program is predicated largely on how well employees execute operations and whether or not the financial model is right for that particular store. Stores in more rural areas, for example, could find more luck adding a proprietary service or joining with a foodservice brand that doesn’t require royalty or franchise fees, while stores situated in already crowded foodservice areas might be best served by co-branding with a QSR.
A brand’s ability to drive customers into the store is one of the most important factors to consider when deciding on a fast food brand.
“If we have the opportunity, we’d rather go with name-brand foodservice,” said John Cary, director of operations at Uppy’s Convenience Stores, which operates 38 sites in Virginia. “They all seem to draw customers into our sites, which is the bottom line for us.”
According to CSD’s 2010 Brand Preference Study, retailers identified Subway and McDonald’s as the top performers in the branded fast food category. Honorable mentions went to Blimpie, Burger King, Arby’s and Quiznos.
In the last 60 days, 61% of the buyers surveyed reported seeing sales presentations by one or two branded fast food manufacturers.
However, more than a quarter of respondents (26%) said they had not seen a single sales presentation from the top 16 companies serving the convenience store channel. Just 13% said they had seen presentations by three or four companies.
Respondents said that in the last two months they saw presentations from Subway (39%), McDonald’s (17%), Blimpie (13%), Churchs (9%), Arby’s (4%), Bojangles (4%), Burger King (4%), Dunkin’ Brands (4%), Noble Roman’s (4%), Quiznos Sub (4%), among others.