The new fast food? Convenience stores add hot, cheap options
Convenience store prices points can also be a draw for people who may have less money to spend. About 60 percent of convenience store food customers have household incomes of less than $40,000, the National Association of Convenience Stores said in a recent report.
Prepared foods and drinks like pizzas, burgers and coffee accounted for 22 percent of convenience store sales last year, an industry report said last month, a figure that has risen from 13 percent in 2010. The industry says many people in rural areas who may not be near supermarkets often get their groceries from convenience stores, but the push into hot and prepared foods in recent years is driven by another factor. Cigarettes remain the No. 1 seller at convenience stores, but are generally on the decline. So convenience stores are expected to keep trying to sell more food as smoking rates fall.
The Sheetz chain, which is based in Pennsylvania and has more than 540 locations in six states, says half of its new locations are built with a drive-thru, an accommodation the fast-food industry relies on for the majority of its sales. While Sheetz customers use the drive-thru mainly to order from the chain’s made-to-order foods like burgers, the company says they can also request items like a gallon of milk from elsewhere in the store if they want.
Travis Sheetz, the chain’s vice president of operations, says he has also seen growth more recently in the cold cases where yogurts, cut fruit and other pre-packaged foods are sold. Those options cater to the growing number of people looking for “convenient health,” he said.
Because the convenience store industry has so many smaller chains and independents, those stores might not have the resources to develop competitive prepared food offerings, says Chris Mandeville, a Jefferies analyst who tracks the industry. That may lead some convenience stores to team up with fast-food chains like Subway rather than compete with them, and open up outposts within their locations.
And for stores cooking up their own food offerings, the image of convenience store food is a challenge. “Older folks tend to think of the roller dogs that have been sitting on the grill for hours,” Mandeville said.
“That’s something that McDonald’s and the franchisees can’t match,” says Mike Sherlock, who heads Wawa’s food and drinks program.
And while those spinning hot dogs may be a punchline for some, they’re an easy way for smaller convenience store owners to get into the hot food business, says Jeff Lenard, a spokesman for the association. He says Burger King’s decision to add hot dogs to its menu last year reflects their popularity.
For now, Lenard notes a bigger potential problem: the convenience-store industry’s reputation for unpleasant restrooms.
“If you have a bad experience in the bathroom,” he said, “you are not going to buy the food.”
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