Curated menus and aggressive bundling promotions by QSRs may have caused a slight increase in convenience stores’ foodservice leakage rate in 2024, according to the most recent Convenience Voices study from NACS. Convenience Voices is an annual shopper survey that captures convenience shoppers’ feedback while they are on site at a store.

The 2024 study found that 28.7% of c-store shoppers intended to visit a QSR (a quick service restaurant—for example, a fast-food chain) within 30 minutes of their convenience visit.

The figure stood at 27.5% in 2023. Jayme Gough, director of research and development at NACS, said the results showed the top two reasons for this leakage were primarily due to a perceived lack of variety and options for shoppers. Perceived quality or value were less important factors.

Digging Into the Data

A limited c-store menu was the most frequently cited reason why consumers said they would go to a QSR. 37.9% of those surveyed said they wanted to purchase a food item that the c-store didn’t offer. A close second, 27.3%, said that while they purchased food at the convenience store, they wanted additional food options that weren’t available.

Among the other reasons respondents gave for visiting a QSR on the heels of a c-store visit were that “a wide variety of food options were available elsewhere” (22.0%) and “higher quality food options were available elsewhere” (18.9%). (Note: Shoppers were able to select multiple options.)

Burger restaurants were the top foodservice leakage destination. This was consistent across all NACS regions, but digging deeper into the data showed that regional preferences emerge when it comes to the second restaurant type most likely to be causing foodservice leakage. In the Northeast and Southeast, fried chicken chains were cited as the No. 2 destination for food, while in the Midwest, Central and South Central regions, Mexican fast food was ranked second. The West region was the only one in which pizza chains came in second as a food leakage destination.

For more information on Convenience Voices, or to participate as a retailer or supplier, contact Jayme Gough at jgough@convenience.org.

‘Very Real Issue’

Foodservice leakage is a “very real issue for the industry as a whole,” said Roy Strasburger, CEO of StrasGlobal, a retail consulting firm. The loss of potential foodservice customers who are at the pump but never set foot in the store is particularly troubling.

“They’re filling their tanks and leaving. Do those customers even know that foodservice is available?” Strasburger said. In many cases, they don’t, he added, as the offer isn’t promoted at the pump. And when it comes to in-store customers, some may be leaving to purchase hot food elsewhere due to the store’s lack of merchandising, Strasburger continued. “If foodservice isn’t front and center, it casts doubt on the foodservice offerings and quality,” he said. “Unfortunately, the c-store industry is still fighting the ‘greasy gas station’ image related to foodservice.”

Mario Spina, owner and CEO of St. Charles, Illinois-based Parent Petroleum Co., said that since the Covid lockdown, “the quality and presentation of foodservice for c-stores has become much more important.” Just a few years ago, consumer were more focused on delivery and less on in-store purchases, but today it’s important for c-stores to serve as “a one-stop shop for consumers in search of quality foodservice,” said Spina, whose Chicagoland stores feature fast-casual dining concepts.

Ben Hoffmeyer, vice president of marketing and merchandising at TXB stores in Texas, agreed, noting that today “guests are looking for consistency and availability of delicious food options across all dayparts.”

Philip Santini, senior director of advertising and foodservice at Pennsylvania-based Rutter’s, said consumer expectations for “convenience, speed and quality food options” are on the rise, and “QSRs continue to capitalize on these preferences with streamlined ordering systems, competitive value deals and mobile app engagement.” For its part, Rutter’s recognizes that consumers are seeking similar experiences at c-stores, Santini continued, “which is why we’ve focused on providing high-quality foodservice, digital ordering platforms and robust loyalty programs to capture and retain their business.”

Value Sells

With inflation pressures and consumer concern over rising prices, QSR operators have become aggressive in marketing value promotions. McDonald’s, for example, recently launched its McValue platform, which offers a buy one, get one for $1 deal on certain items, including Sausage McMuffins and double cheeseburgers, throughout the day. It also launched a $5 meal deal last summer, which it extended through the end of December.

In some cases, QSR prices have dropped as low as $2 for meal combos and $5 family meals, Gough reported. “Consumers are still price sensitive,” she explained, and fast-food operators are aggressively bundling offers in response.

The QSR model could be at the heart of the disparity when it comes to value pricing: QSRs can produce food more cheaply, explained Strasburger. In addition, value meals provide the chains opportunity to upsell, Strasburger noted, such as the ability to supersize an offer, resulting in a higher total than what customers may initially intend to spend.

While competition from value deals have surely challenged many c-stores, Santini said Rutter’s has been insulated. “While we’re aware of QSR value promotions, we haven’t seen significant negative impacts on our foodservice sales,” he said, as “our competitive pricing, loyalty program incentives and focus on quality food” help differentiate the retailer. “Additionally, the convenience of combining fuel, groceries and premium foodservice options in a single trip continues to resonate with our customers,” he said.

Ryan Malkowski, senior director, foodservice, at Performance Food Group (PFG), added that menu boards at QSR locations and their “speed of service” provide an advantage. “There may be opportunity for some c-stores to emulate those branding tactics,” he noted, as some convenience retailers “have a hard time in communicating their offers.”

Playing Up the One-Stop Shop

On the flipside, c-stores offer numerous features that QSRs lack.

Spina noted that at Parent Petroleum Co.’s Pride stores, “We have an advantage over restaurants in that when people are waiting for their food, they can pick up a bottle of wine or head over to the carwash.”

And when it comes to foodservice offerings themselves, c-stores provide more flexibility. Raduns pointed to “broader menus that might appeal to a group of customers traveling together,” as opposed to QSR menus that feature only burgers or chicken products. He and others also cited high-margin categories, such as alcoholic beverages, that are available in many c-stores but very few QSRs.

Several leading retail chains now offer their own value deals to capture more customers. Wawa, 7-Eleven, Circle K, Cumberland Farms, Twice Daily and Weigel’s are among operators that recently entered the value meal arena.

Santini said that Rutter’s closely tracks its foodservice performance and that “recent trends indicate that our investments in menu variety, meal bundles and targeted promotions have helped reduce leakage to QSR. Gains have been driven by our expanded ordering options, customer loyalty incentives and competitive pricing.”

According to Hoffmeyer, TXB’s diversified menu helps guests avoid menu fatigue. “One day a guest may feel like hand-breaded chicken and the next day, it may be fajita tacos or brisket quesadillas,” he said. The Texas c-store chain has also taken a proactive approach to value pricing, he continued, with promotions like two for $6 chicken rolls and two for $5 breakfast tacos. The moves have driven increased food transactions, Hoffmeyer noted.

At Pride, meanwhile, its Urban Counter and Taco Urbano concepts are more akin to a fast-casual restaurant than a QSR, Spina explained. “They’re higher end and made to order,” he said. Pride stores recently upgraded to Wayne fuel dispensers at some locations to promote the food offerings. The pump devices feature large monitors with brief videos about the company’s foodservice offers.

To best compete with QSRs, think like a QSR, said industry experts. For convenience retailers entering the foodservice space, Strasburger suggested they “be serious about it. Promote your program as if you were a QSR.”

Raduns recommended hiring team members with QSR experience “to overcome paradigms in the convenience business related to historical foodservice approaches.” And PFG’s Malkowski said that in addition to finding the right supplier, “make sure your team is trained. Have meaningful items and be consistent.”

With the right tactics in place, c-stores can make strides to close the gap in foodservice leakage.

Telling the Options Story

According to NIQ, the average c-store sells 335 options when it comes to packaged beverages, 175 options when it comes to candy, 161 different versions of salty snacks, and 76 versions of packaged sweet snacks.

When it comes to beer, there are an average of 136 choices, and another 22 when it comes to wine.

There are an average of 40 foodservice items prepared onsite, plus 23 commissary items, 12 cold dispensed choices and nine different frozen dispensed choices.

Start to mix and match and you have huge numbers. Suppose a customer walked into the average c-store every day and picked one item from each of these categories: a packaged beverage, candy, salty snack and a packaged sweet snack. The customer would have more than 700 million different combinations to choose from—enough for a visit every day for almost two million years without repeating.

The advantage c-stores have over QSRs is their ability to offer options. Here’s a look at how some numbers combine. Is there an options story your stores can tell to convince customers to choose your foodservice over competition from other channels?