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    C-stores Take On Limited-Service Restaurants

    Expanded foodservice options lead to higher margins and help retailers leverage their dominance in coffee and drinks.

    NEW YORK -- Convenience stores are rising up to meet the challenge of restaurants, particularly limited-service restaurants, with their branded foodservice options.

    According to a report by Packaged Facts, entitled "Convenience Store Foodservice Trends in the U.S.," the benefits of foodservice programs are twofold: higher margins, and improved food quality and healthfulness. At the same time, c-stores are holding their own against established restaurant players, who are seeking to take a bite out of the limited-service restaurant pie while keeping in mind customers' on-the-go purchasing needs.

    "By enhancing foodservice quality and variety, we believe convenience stores are poised to benefit from increased sales of gasoline and other merchandise, as consumers seek to consolidate their purchases in the interest of efficiency," said David Sprinkle, publisher of Packaged Facts. "Because it is so well positioned, we anticipate that convenience store industry foodservice sales growth will outperform the retail and restaurant foodservice industry average through 2013."

    Several factors are behind convenience store operators' push to build up their foodservice offerings: protecting against gasoline sales volatility; deepening customer relationships; and protecting and leveraging a store's coffee/beverage hold, the report indicated.

    In addition, c-store companies recognize their foodservice shortcomings -- fewer healthy choices and a perceived quality gap between their offerings and those of traditional restaurant competitors -- and they're working to overcome them.

     

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