If you’re not doing foodservice, consider this your call to action.
As the economic downturn eases, the restaurant industry will see a gradual improvement in 2010, according to the National Restaurant Association’s 2010 Restaurant Industry Forecast. Industry sales are expected to reach $580 billion this year, up 2.5% in current dollars over 2009. But that’s only half the story. Convenience stores are in a prime position to capture more than their “fare” share of the market as customers escape the family dining room in search of fresh meal solutions.
“When you look at all household spending in the U.S., 49% is allocated toward restaurants,” said Hudson Riehle, NRA’s senior vice president of research told me as part of our annual 2010 Foodservice Report. “Convenience stores have become an important source for consumers purchasing fresh meals away from home. The segment will continue to grow the food industry overall and shift food dollars away from other segments this year and beyond. In short, convenience stores will be a bright spot in the foodservice umbrella in 2010.”
Riehle is forecasting a nearly 5% increase in the convenience store segment, which is nearly double the 2.5% jump forecasted for the food industry overall. By comparison, the quick-service restaurant (QSR) segment is projected to post sales of $164.8 billion in 2010, a gain of 3% over 2009. Sales at full-service restaurants are projected to reach $184.2 billion in 2010, an increase of 1.2% in current dollars over 2009.
In addition to convenience stores maturing as an industry, Riehle credited the channel’s larger distribution network and its keen ability to get products to market. “From a competitive standpoint, this has made convenience stores a much more viable competitor,” he said. “Look at the suppliers and their extensive distribution networks. They are much more robust than at any time and that has clearly benefited industry sales.”
Retailer after retailer we talked to discussed the need for consistency. “We are in the foodservice business to be great. We expect nothing less. Our customers know that and they reward us with their business,” said Jack Cushman, vice president of foodservice for Nice N Easy Grocery Shoppes in Canastota, New York. “But that’s not something we just hope for. We work really hard at it every day. You can’t measure one unsatisfied customer in terms of one bad transaction. It has a ripple effect. So the goal is to never have an unsatisfied customer. You do that with great food, a great staff, listening to what your customers want and exceeding their expectations. It’s not easy, but when you do it consistently, you’re rewarded with a stream of repeat business.”
This is the typical mindset for chains that do a great job with foodservice, and you know their names by now—Sheetz, Wawa, Rutter’s, QuickTrip and the many others profiled throughout this special foodservice issue. View CSD’s in-depth coverage of this growing category beginning here.
With foodservice predicted to have such strong growth, retailers must not only emphasize their food programs, they need to focus on presentation. Store cleanliness and overall image plays an integral role in garnering consumer confidence, which leads to food sales. This extends beyond the front counter and the forecourt and all the way into the restroom.
“If you’re in this business and want to stay in this business your customers are going to tell you what their expectations are, and if you don’t meet those expectations they’re going to go somewhere else,” said Mike Thornbrugh, spokesman for QuikTrip in Tulsa, Okla. “One of their expectations is having a clean restroom. That’s an absolute must.”
Read about the impact restrooms have on food sales in Erin Rigik’s detailed report here.