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    Hot & Cold

    Prepared food gains are offset by sluggish dispensed beverage sales

    FIG. 30

    Convenience stores continue to heat things up in the kitchen, but challenges at the beverage island led overall foodservice sales to cool down a bit in 2013 compared to prior years.

    The total category posted a 5.5-percent increase in average per-store sales last year, lagging behind the 6.8-percent rise seen in 2012 and the 6.2-percent jump reported in 2011.

    The prepared food segment actually had a better year in 2013 than in 2012, with average per-store sales increasing by 9.5 percent compared to 8.1 percent the prior year. This is not surprising given the unwavering focus on this segment by c-store retailers both large and small.

    Unfortunately, the gains made in prepared food were offset by declining hot dispensed beverage sales and flat cold and frozen dispensed beverage sales. Per-store sales of hot beverages dropped 2.3 percent in 2013, after delivering a 4.3-percent increase the previous year.

    This decline can likely be attributed to intensifying competition. In addition to coffee shop chains such as Starbucks and Dunkin? Donuts, McDonald?s and other quick-service restaurants are aggressively defending the morning daypart by heavily innovating around and promoting their traditional coffee and new espresso-based specialty beverages.

    Meanwhile, cold and frozen dispensed beverages, while not hurting the overall category, did not help either last year. Cold beverages saw a nominal 0.5-percent gain, a significant dropoff from the segment?s 2012 growth of 6.3 percent. Similarly, frozen beverages grew per-store sales by a mere 0.1 percent vs. the 3.8-percent growth generated the prior year.

    Record cold weather throughout most of the United States in 2013 may have played a part in the flat performance of cold and frozen dispensed beverages. For the first time in 20 years, the nation saw more record cold temperatures last year than record hot temperatures, according to statistics from the National Climatic Data Center.

    Record cold weather throughout most of the United States in 2013 may have played a part in the fat performance of cold and frozen dispensed beverages.

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