The complication for U.S. convenience stores looking to exploit this opportunity is that, in a big-picture kind of way, the public doesn’t consider them champions of organic produce and natural ingredients. They’re places to buy processed, packaged goods.
And if the food item isn’t designed for a long shelf life, such as an egg sandwich or cup of sliced carrots located in the refrigerated section, consumers still have their doubts. When was it made? Who made it? When was it delivered?
Gas is going to become less of a revenue source, so they need to find ways to replace that revenue stream.
Katie Hansen, senior analyst, Mintel
“While there is a desire there, it’s clear convenience stores still have a fair amount of work to do in building trust between consumers,” Hansen said on the issue.
But they are trying. In June, Casey’s, the nation’s third-largest convenience store by number of locations, announced a three-year strategic plan. One item on the list: Invest more in fresh food.
“Prepared food is a core capability for Casey’s, and as the fifth-largest pizza chain in the U.S., our fresh, handmade pizza is our crown jewel,” Tom Brennan, Casey’s chief merchandising officer, said in a statement.
With new kitchen facilities designed to accommodate regional differences, Circle K also aims to boost its sales of fresh and prepared food.
A major benefit of getting it right: Fresh food delivers big margins. “This is the most profitable part of the business, so it’s something they’re concentrating on,” said Rosero-Pena.
Last year, prepared food and dispensed beverages represented 18.8% of the industry’s in-store sales, up two percentage points compared with 2021.
A convenient future
Like most businesses, convenience stores are always exploring ways to evolve.
Not long ago, for instance, Circle K began experimenting with checkout-free technology in select Arizona locations. It already plans to rollout AI-enabled self-checkout systems, which allow customers to ring up items without using barcodes, to thousands of stores in the coming years. “We sell time, at the end of the day,” said Lewis. “Our job is to make your life easy, so if I could build time machines, I would.”
In June, 7-Eleven updated the look of its signature Slurpee drink. The new direction took inspiration from the company’s Brainfreeze Collective, a customer research panel consisting of 250,000 members the company formed in 2021. “We’re always talking to our customers,” said Jarratt.
Again, while putting consumers first is important for all brands, it’s especially crucial for an industry built on giving people what they want, whenever they want it.
“When you define convenience as how you solve your problems as a retailer, you’re not going to go as far as innovators who are constantly thinking about the customer,” said Lenard.
This story is part of the “Building a Better Agency” special feature.
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