Doing Deli the Right Way

Convenience store operators have plenty of help when it comes to investing in a foodservice program.

By Jim Callahan.

I recently read that China’s convenience stores are experiencing double-digit growth in deli sales primarily driven by hot dog sales. But let’s be frank, nobody does hot dogs better than Americans. From the quality of the food to the equipment used to make and serve them, hot dogs are an American icon.

While the hot dog is a symbol, there is no denying that how well convenience store retailers serve food items will be an indicator of how successful they will be in the future.

When it comes to getting this important category right, let me assure you that there are a plethora of companies out there that are willing to help you equip your foodservice counter at little or no cost so that you really can deliver the deli experience inexpensively and quite effectively for your customers.

Deli is where profits and margins are right now and for the foreseeable future. If you don’t have a full and complete foodservice offering, your chances for success aren’t too good. So if you are just starting out or looking to take your food program to the next level, let’s take a look at some of your options.

Equipping the Store
In most markets Coke and Pepsi still furnish fountain machines for little or no charge, but you must show them you have the ability and the desire to sell the product from a clean and friendly store.

Similarly, most coffee companies are happy to furnish stores with a state-of-the-art coffee maker and perhaps even a cappuccino machine or an iced coffee dispenser with the caveat that you buy 100% of the product from them. While you can get a better price at Sam’s Club, the coffee company that loaned you the equipment is making a sizeable investment in your business and is banking on your success. Use this to your advantage.

Flank that coffee counter with fresh-baked goods or a candy display rack to drive impulse sales of other high-margin items.
Frito-Lay has a new space-saving rack that cascades over the hot dog display to help promote combo meals and up-sell each foodservice customer.

Companies like Gehl’s offer a nacho cheese and chili dispenser for a few hundred dollars, but will help offset that expense with free product. Slush Puppie and others still loan out equipment for frozen beverages that runs on 110 volts. If you’re willing to look around, you might also find a company that will furnish you with a two-barrel frozen Coke/Mountain Dew machine.
It’s this kind of legwork that will drive your business all summer long and well into the fall. An exciting offering gets the customer out of the car and into the store, and that’s what this all about.

Let me finish up where I started—with the hot dog roller grill. The grill can also accommodate breakfast burritos, tacquitos and other ethnic foods that can add some spice to your foodservice sales.

An effective roller grill, with a sneeze guard and a bun holder, is going to cost you upwards of $3,000. I highly recommend opting for a bun steamer, which adds about $500 to the cost, but it will also have a much quicker return on investment as a result of higher sales. Many hot dog providers will offer you both a rebate and free goods to help offset your investment, and many will also provide you with attractive POS to drive sales.

Deli is different and must be treated differently than any other area of your store. It takes a lot of hard work, but it can be done attractively and affordably. Once you recognize the importance, you can begin to
realize the profit.

Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CSDecisions.com. He can be reached at (678) 485-4773 or via e-mail at jfcallahan502@msn.com.

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