Quick Stats

Quick Stats

    You are here

    Hot Dog! Foodservice Sales Cooking

    So are sales of sandwiches, chicken, baked goods, salads, coffee and hot teas, according to Convenience Store News¿ 2008 Foodservice Study.

    By Don Longo

    With an 11 percent increase in year-to-year sales, foodservice far surpassed all other in-store categories in sales growth last year, according to Convenience Store News' 2008 Foodservice Study. Overall, c-stores registered a comparatively lackluster sales gain of 3.5 percent on their in-store merchandise categories in 2007.

    And for the first time, foodservice eclipsed cigarettes in gross margin dollars -- generating $9.9 billion in profits on just under $20 billion in sales last year. The average gross margin for foodservice was 49.45 percent, up from 48.84 percent in 2006.

    More than half of foodservice sales (58.6 percent) came from food prepared either on- or off-site. Prepared foods rang up $81,870 per store last year, an increase of 13.2 percent.

    Within prepared foods, sandwiches was the largest category with $21,734 in sales per store, an increase of 16 percent. Hot dogs was next at $14,900 per store, up 9.6 percent.

    Pizza was right behind hot dogs, accounting for 15.1 percent of prepared foods, but sales were up only 3.5 percent in this sub-category, lagging all other prepared foods.

    Both chicken and bakery were up more than 20 percent, though. Chicken sales topped $9,000 per store, while baked goods generated about $5,500 per store. Hamburgers account for just 3.8 percent of c-store sales, despite a 14 percent increase last year. Salads meanwhile, posted the highest percentage increase in the prepared foods area -- rising 26 percent. However, that gain was on a relatively low base. Salads, at just 3.5 percent of total prepared food sales, accounted for just $2,827 in average sales per store last year.

    Hot dispensed beverages represented the next highest percentage of foodservice sales at 27.8 percent. C-stores sold $38,899 worth of hot dispensed beverages on a per-store basis last year -- a solid increase of 8.4 percent.

    Coffee (including flavored coffee) sales rose 8.2 percent last year to $28,886 per store. Cappuccino and specialty coffee drinks also grew 8.6 percent to $6,704 per store.

    Hot tea posted a whopping 21.4 percent sales gain per store, but its average sales per store of $784 was only 2 percent of hot dispensed beverage sales last year.

    While most of the foodservice category was red hot last year, sales in the cold and frozen dispensed beverages categories were tepid.

    For the first time, this year's CSNews Foodservice Study breaks out frozen dispensed beverages and cold dispensed beverages separately. (The two were combined in previous years' research.) Cold dispensed beverages generated 8.7 percent of the foodservice category's sales, which came out to $12,126 per store, an increase of just 1.8 percent over 2006.

    Non-carbonated fountain drinks actually performed pretty well. Non-carb. fountain sales were up 6.1 percent to $784 per store last year. However, fountain carbonated -- which represents 85 percent of the category -- were up only 2.1 percent and fountain sports drinks -- a small 2.9 percent of the category -- fell by more than 25 percent.

    Frozen dispensed beverages was the laggard in the foodservice category. Sales per store for frozen dispensed beverages averaged $6,890 last year, a negligible increase of just 0.3 percent. Frozen dispensed beverages accounted for just 4.9 percent of total sales in the foodservice department.

    At 65.5 percent and 65.2 percent, respectively, cold and frozen dispensed beverages did achieve the highest average gross margin percents in the foodservice category last year. Gross margins on hot dispensed beverages were 53.44 percent last year, while prepared food generated 43.85 percent average gross margin.

    On a dollar basis, those categories are reversed because of the much higher sales volume generated by prepared food and hot dispensed beverages.

    Foodservice sales are often analyzed by eating occasion. So CSNews asked retailers to break down their foodservice sales by daypart. The majority of foodservice sales occurs during lunch (11 a.m. to 2 p.m.) and this figure held steady from 2006 to 2007 (49.7 percent of sales in 2006 and 49.6 percent of sales in 2007). However, c-stores achieved a strong upswing in sales during the breakfast hours last year, with the breakfast daypart (6 a.m. to 9 a.m.) rising to 30.7 percent of foodservice sales, up from 24.8 percent in 2006.

    Dinner (4 p.m. to 7 p.m.) saw a slight decline from 20.6 percent of sales to 18.6 percent last year, and all other times declined from 4.9 percent to just 1.1 percent.

    In reaction to rising costs, in particular food inflation, 70 percent of respondents reported raising retail prices to offset margin losses, while 32.5 percent said they have been holding the line on prices and absorbing the hit to margins.

    The Convenience Store News Foodservice Study is based on surveys received from 101 convenience store operators that offer some type of foodservice program. A total of 41 percent of respondents are single-store operators, while 59 percent represent chains with two or more units. This report also incorporates data from the Convenience Store News Industry Report, which includes a total of 252 respondents.

    • About

    Related Content

    Related Content