starbucking the system

Convenience concepts are spreading to coffee houses, supermarkets and even drug stores, and retailers have every reason to be concerned.

It’s no secret that c-stores have“borrowed” ideas from outside channels.Thanks to Starbucks, c-storeoperators learned that customerswould pay $4 for a cup of coffee as long asit was a high-end brew. So it should comeas no surprise that drug stores, fast-foodchains and, yes, Starbucks are keeping aclose eye on the convenience channel forthe same reason: increasing market basketrings and reclaiming the consumer dollarsthat convenience operators have enjoyed.

Drug Store Drinks
In an effort to enhance the convenienceaspect of its operations, drug store giantWalgreens Co., is currently testing a selfservicebeverage station with grab-and-gofoods called Cafe W.

Cafe W features premium coffees andcappuccinos, tea bags, fountain soda,ICEES and, possibly, pastries and fruitcups. The display typically includes packagesof single-serve cookies, crackers,Entenmann’s, granola bars, Balance bars,nuts and candy.

Early test markets include Wichita,Kan.; El Paso, Texas; Chicago andDeerfield, Ill. (the company’s corporateheadquarters) and Orlando, Fla.

It’s early in the program’s test phase,but Walgreens claims it will be constantlychanging.

“We are in the very early stages of developing Cafe W, with a little over 100 ofour nearly 6,000 stores having a version,”said Carol Hively, Walgreens’ corporatespokeswoman. “This is an evolving concept,so Cafe W may not stay the samegoing forward. We plan to have it in about150 stores by the end of August, which isthe end of Walgreens’ fiscal year.”

More Than Doughnuts
As Dunkin’ Brands Inc. launched anew store design in Clifton Park, N.J., thecompany has also enhanced its menu tobe more than just a breakfast destination.

The idea, company officials said, is toencourage customers to come in for morethan doughnuts, coffee and the occasionalcroissant sandwich. New offerings scheduledto hit the menu include personalpizzas and flatbread sandwiches that willhave a suggested price point of around $4.The fresh fare will be heated in TurboChefconvection-style ovens that cook the premadesandwiches in 90 seconds.

By early next year, all of the CapitalRegion’s 106 Dunkin’ stores are expectedto have the wider food menu. The newClifton Park store is not the first to haveflatbreads and pizzas—they’re also availablein New York stores in Schenectady,Johnstown, Warrensburg (at a Mobil gasstation) and Pittsfield, Mass.

Jack of all Trades
Jack in the Box Inc. is a foodservice pioneer,having introduced the first breakfastsandwich at a major fast food chain in 1969,according to a company spokeswoman.Jack in the Box seeks to capitalize on thatreputation by introducing it’s new sirloinsteak & egg burrito, a 10-inch flour tortillastuffed with strips of 100% sirloin steak,scrambled eggs, hash brown sticks, shreddedcheddar and pepper jack cheeses, andchipotle sauce, served with a side of fireroastedsalsa. The product retails for $2.99and the product was conceived after thesuccess of the chain’s 100% sirloin burgerand steak ‘n’ cheddar ciabatta sandwich.

A key point of differentiation for Jackin the Box and other fast-food breakfastmoguls, like McDonald’s, is that the companyoffers the breakfast burrito all day.

Sandwich Dollars
Starbucks is known for its coffee, butthe chain is working to become a foodservicedestination as well.

The company first offered breakfastsandwiches in April 2003, but they weremet with mixed reviews. Since then, it hasfine-tuned its menu to offer more popularbreakfast fare: eggs Florentine with babyspinach and havarti, and herbed sausageand egg with aged sharp cheddar.

Vendors prepare the breakfast sandwichesdaily and deliver them first thingin the morning to be heated in countertop,a process that takes about three minutes.

After seeing the response to the highendbreakfast sandwiches, Starbucksfurther expanded its menu to include saladsand sandwiches with the hopes ofcapturing lunch dollars. Beginning in June,Starbucks national lunch selections featurethe tomato mozzarella insalata andthe fiesta salad, a fire-roasted corn andblack bean salad topped with juicy grilledchicken. The company also offers regionalselections for each of its markets.


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