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NEW YORK -- There has been much speculation in the industry lately about how foodservice consumers will respond when the overall economy improves. While there have been improvements in economic growth and housing, the two indicators that Technomic is most concerned about -- disposable personal income and employment -- both remain weak.
Moreover, when consumers are less confident in their financial future and job security, away-from-home spending is negatively impacted. In a recent survey, Technomic found that more than three-quarters of foodservice consumers were either struggling to make ends meet or simply getting by when describing their financial future.
The most obvious strategy for foodservice operators is to focus on value and price. While this is not a new response, consumers expect operators to continue offering deals. In another survey, approximately one-fifth of consumers expected no change in promotions/special offers by restaurants once the recession ends, and most tellingly, more than half only expect promotions to slow -- not go away completely.
While convenience store foodservice will not be immune to "dealing," the segment does offer a number of strengths than can set it apart from the overall industry.
Balance Bundling With Absolute Price Points. C-store operators have already begun to balance their offerings from simply combo/bundled meals to better price points -- such as two for $2 deals instead of $2.99 combo meals. And consumers have backed this up: In a survey conducted in January, only 22 percent of consumers said it is important that c-stores offer a combo meal, down from 32 percent the year before. Probably most telling is that 40 percent of c-store consumers would like the ability to alternate items in a combo meal (such as the drink, salad or dessert), which also implies that consumers do not want to pay for things in a bundled meal they do not want.
Add Intangible Value. Beyond price, c-stores have the ability to differentiate themselves from the pack by "delighting" the customer. It is commonly believed that approximately 60 percent of a c-store's consumer base is composed of "regulars," and therefore, knowing the customer becomes critical. For example, if a customer comes in everyday for a mocha java coffee, muffin and newspaper, the staff should strive to have these items at the checkout counter when the customer's car pulls into the lot. These small steps have a minimal impact on a financial statement, but make a major impact on the customer's decision to return.
Focus on Quality. This may seem obvious, but c-stores have a perpetual battle to overcome the reputation of offering food from a gas station. While value and pricing are key, c-stores must focus on the quality of their foodservice offerings. This encompasses all consumer sensory cues such as freshness, made-to-order, the temperature of the food, the expiration dates, the ability to see the food and the appearance of the staff preparing it. Other ways to prove quality would be through in-store sampling.
When dealing with this new foodservice consumer, these are just some of the ways c-store operators can adjust their strategies to meet market demands for value and dealing with minimal opportunity costs.
Other columns by Tim Powell:
Roller Grill Remains Critical to C-store Foodservice
Trends in Convenience Store Foodservice
Tim Powell is C-store Foodservice Program director for Technomic, a fact-based research and consulting firm that helps restaurants and food suppliers grow profitably with business-building guidance. He can be reached at [email protected].
Editor's Note: The opinions expressed in this article are the author's, and do not necessarily reflect the views of Convenience Store News.