When you have a late-night craving or desperately need coffee, is a fast-food restaurant or a convenience store (c-store) more likely to come to mind? If you’re like most consumers, you’d probably say a fast-food restaurant. In fact, in Technomic’s latest Canadian Future of LSR and Canadian Convenience-Store Foodservice Consumer Trend Reports, 58% of consumers purchase food from fast-food restaurants at least weekly, while just 30% purchase foodservice from c-stores as often.
Convenience stores might not be top-of-mind for tasty prepared food, but pressure from other retail competitors and increased c-store/fast-food co-branding may soon influence where consumers go to satisfy their taste buds and quench their thirst. In fact, On the Run and Shell convenience stores have already partnered with Tim Hortons, with On the Run planning 175 more co-branded locations over the next 10 years, and Mr. SUBs will soon be popping up in Needs convenience stores.
Why aren’t convenience stores already more of a go-to spot for a quick meal or snack? The answer may seem obvious, but consider this: 45% of consumers say they visit c-stores at least weekly. However, consumers only purchase foods at c-stores 38% of the time. Even as consumers increasingly adopt a busy, on-the-go lifestyle, convenience isn’t everything, especially in foodservice.
When consumers who never purchase prepared foods or beverages from c-stores were asked why, one in four report a lack of freshness. Among consumers aged 18–34, a key demographic, two-fifths or more say lack of freshness (48%) and low quality (40%) are key concerns. In fact, the overwhelming majority of consumers say that in general, fast-food restaurants’ taste, freshness and quality are better than that of c-stores.
In short, consumers do not seem to place enough trust in c-store foodservice where it matters most: taste and freshness. At a time when grocers like Loblaw (via Shoppers Drug Mart) are competing for foodservice purchases, c-stores will have to work hard to gain this trust. But consumers give little credit for progress thus far; just 22% think c-store foodservice quality has improved over the past two years.
Best of Both Worlds
Co-branding with LSRs may give those c-stores struggling with their foodservice programs the edge necessary in overcoming these perceptual issues. Indeed, 42% of consumers prefer to visit a c-store that has a familiar chain restaurant inside for meals, and 35% say the same regarding beverages. The presence of their trusted brand likely conveys that this c-store offers a good value, freshness or better quality.
Co-Branding Can Give C-Stores an Edge
(Top two box = agree and agree completely)
Base: Approximately 525 consumers (familiar chain restaurant) and 757 consumers (c-store purchase includes foodservice coffee beverage) aged 18+ Respondents indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely
The Coffee Factor
Co-branded coffee may also help some c-stores compete on an offering included in 45% of c-store foodservice purchases. Current c-store coffee does not inspire strong loyalty among consumers, as just 17% say they are loyal to a specific c-store because it serves their preferred coffee. Since 90% of c-store coffee consumers would be willing to source coffee from fast-food restaurants if they do not purchase it at a c-store, offering a branded coffee such as On the Run has done with Tim Hortons coffee could offer consumers the best of both worlds—a well-known and beloved coffee, at even more convenient locations.
Next time I pass a convenience store, I certainly wouldn’t be opposed to pulling in for a warm cup of Tim Hortons coffee.