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Foodservice Favors Larger C-Store Chains, Survey Finds

The sixth annual CSD/Balvor Foodservice Survey finds that convenience store chains with size and scale are reaping the biggest rewards from foodservice sales today.

The survey, released this month, shows that chains with 501 or more stores are bringing in the most total revenue from foodservice, averaging just under $30,000 a store each month. Mid-size chains, with 201-500 stores, are bringing in the highest average sales per store at just over $40,000 a month.

The bottom quarter of retailers are generating $5,872 a month in foodservice sales, while the top retailers in the survey are bringing in $54,834 a month.

Findings from the survey were released by Convenience Store Decisions on its website this week.

The survey found that hot dispensed beverages remain a cornerstone for foodservice programs in the convenience store channel, and private label programs are becoming a point of differentiation for retailers.

“Manufacturer and franchise or licensed brands leverage more recognized and trusted consumer brands, which is why it’s the preferred approach for the second quartile looking to grow the base business,” the report from David Bishop of Balvor said. “Proprietary brands help to create a unique offer that can become a destination leading more than half of the top-performing retailers to use this approach.”

But private labels are not the only way that retailers can leverage their hot beverage programs, the report said.

“Although more convenience retailers are utilizing a proprietary branded coffee program, there are good reasons and advantages to other options that retailers need to consider as they manage this category,” it said. “For instance, control brands generally offer a turnkey solution that helps a retailer establish an offering, which explains why it’s the most dominant approach for third and fourth quartile operators.”

Private label brands are the top choice for larger chains (51 or more stores) in the bakery department, with 60 percent of the share. Private label sandwiches claim 53 percent of the market share for retailers selling prepared foods, and that number climbs higher at larger retailers, with 64 percent of those with 200 or more stores using private label sandwiches.

That trend continues in salads and side dishes, with 56 percent of mid-size retailers using private labels and 64 percent of larger retailers using private labels.

The survey also found that 44 percent of retailers are planning to expand their sandwich and wrap assortments this year, while 39 percent said they planned to expand SKU count in bakery products and 34 percent expected new products for the roller grill.

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