When Kwik Chek began remodeling outlets in 2018, one of the first changes that management wanted was an open-kitchen concept so customers could see fresh food items being prepared made to order.
“We are focusing on fresh food, and we are committed to doing everything fresh,” said Kevin Smartt, president of Kwik Chek, the 47-store chain headquartered in Spicewood, Texas, just north of Austin. “We do tacos and chicken, and we wanted to cook the beef and chicken meat in front of customers. In the c-store food world, you don’t see many people open up the kitchen so customers can see into it.”
An open kitchen gives customers a front-row seat to the ingredients being used, the cleanliness of the operation and exactly how the staff prepares their meals.
“Personally, I want to see the cooking that is going on,” said Smartt. “A lot of the small, cool restaurants you go into today have an open-kitchen concept, and you’re watching the cooking happening right in front of you. We want you to see that at Kwik Chek. We think it proves that the food is fresh, that we run a clean operation and our food is not being trucked in from somewhere else and then put in an oven and warmed up.”
Industry Sales
Source: NACS State of the Industry Report of 2019 Data
Made onSite
According to NACS data, the diverse foodservice prepared onsite category can range from chicken, Mexican food, pizza and roller-grill items to burgers, sandwiches, wraps, salads and bakery. Some retailers feature a robust menu, while others may limit the offering to one or two hot items or cold grab-and-go foods pre-made in the store.
“Prepared food offers can be vastly different from retailer to retailer,” said Jayme Gough, analyst for NACS. “Listening to your customers and creating a menu specific to your local area creates a sense of connectivity with customers.”
According to preliminary data from the NACS State of the Industry Report of 2019 Data, food prepared on site accounted for 11.9% of in-store sales in 2019. Just over 88% of convenience retailers sell some type of food in store, with the category garnering $371,027 in sales per store in 2019.
“Prepared food had an average gross margin of 54.44% in 2019,” said Gough. “Within foodservice, prepared food accounted for 63.6% of sales, followed by hot dispensed beverages at 18.0% and cold dispensed beverages at 8.1%. Frozen dispensed beverages was at 5.8%, and commissary was 4.6%.”
Labor Pains
One of the biggest obstacles that convenience stores face in attempting to succeed as a made-onsite foodservice operation is the ongoing labor shortage. Hiring the right people—and then keeping them on staff after they are trained—can be daunting.
“Our primary focus is dealing with labor—shortage of labor and turnover,” said Kyle Lore, corporate executive chef at Maverik, the 300-plus store chain based in Utah. “We’re trying to streamline and simplify all of our processes. Simpler is better from an execution standpoint.” Lore is investigating ways different types of equipment can make work easier and more efficient in Maverik’s open kitchens.
“We’re working on dish storage to make it easier to work in the kitchens,” said Lore, whose stores also have open kitchens. “We don’t have deep fryers in the stores. We use ovens to heat things like tater tots, so we’re checking out various versions of air fryers to see if there is something easier for the staff to use.”
New technology and improved equipment are important to providing customers with great tasting food.
When determining what equipment will go into a Maverik kitchen, Lore considers its operation, performance, return on investment and ongoing product support. “When we look at a new piece of equipment, we really try to put it through its paces,” he said. “We want to see it function in the real-world environment that it will experience daily. When equipment goes down in the stores, it is a huge obstacle for our employees accomplishing their goals, and it disrupts the customer’s experience.”
Smartt believes that new technology and improved equipment are important to providing customers with great tasting food. “It’s crucial in controlling labor costs and in making your employees’ lives easier, but the new equipment also cooks better,” he said. “It’s more sophisticated and intelligent, and you can do more with less. It gives you a higher quality product today than it ever has before.”
Kwik Chek invests in the latest technology every time a store is remodeled or constructed, “but the hard part is that technology—in all aspects—is changing quickly,” Smartt said. “That makes being consistent from store to store a little challenging.”
Time-Saving Techniques
There are several ways to help simplify work in the kitchen without investing in new equipment.
In the past, Maverik used several different proteins in its dishes but now relies on a range of sauces to give customers diverse menu options. For example, “we may use chicken, and then keep different sauces in squeeze bottles,” said Lore. “That way we’re not bringing in another product or making employees heat up another item.”
Category Performance
Creating a menu specific to your local area creates a sense of connectivity with customers.
Kwik Chek recently wrapped up an LTO offer that let customers choose from four different sauces to complement their order of chicken tenders. “We see that as a good way to add variety without changing the core offer,” Smartt said. “I don’t know if it saves labor, but it makes training easier. It’s easier for an employee to learn how to use a different sauce than to learn how to prepare a whole new product.”
Despite the efforts to simplify kitchen chores, both chains are constantly on the lookout for tasty new menu items that customers will enjoy.
Smartt likes the potential of cauliflower pizza crusts. “We’re looking at it, but we’re not selling it yet,” he said. “We have limited space for inventory, and we’d have to determine how many we’d sell. And then if we brought it in, what would you take out? At some time, we might do it as an LTO to see how it works before we’d launch it as a product.”
Maverik has a generous offering: burritos, tacos, fresh salads, wraps, pizzas, bakery goods and breakfast bowls. But don’t look for plant-based meats on the menu. “We’ve done an analysis, and it doesn’t represent a large enough percentage of our customers to be worth carrying the product,” said Lore. “We do have vegetarian options. The beans in our burritos are vegetarian, and we have vegetable proteins, but not plant-based meats.”
Food for a Pandemic
The arrival of COVID-19 in early March threw a huge wrench into U.S. made-onsite foodservice operations. As state governors and city mayors mandated social distancing and forced the shutdown of on-premise dining, foodservice retailers of all sizes had to hustle to keep their businesses afloat.
Some, like Irving, Texas-based 7-Eleven stores, limited store hours to give employees more time for “enhanced sanitation measures,” the chain announced. The company urged shoppers to use the 7NOW mobile app that allows them to order food and groceries and have them delivered at their door, minus contact with a delivery person.
The NACS Convenience Tracking Program (CTP) comprises consumer behavior analytics from more than 10,000 convenience store shoppers across 42 states, representing the most comprehensive consumer-driven metrics available to the industry.
To learn more about CTP and how to participate, contact Leroy Kelsey, director of industry analytics, at [email protected] or visit www.convenience.org/ctp.
With headquarters in Wawa, Pennsylvania, Wawa stores also adjusted hours to allow for thorough cleaning and eliminated the option of self-serve food. Instead, Wawa employees began serving coffee and bagging bakery items, rather than let customers do it themselves. And when Philadelphia officials temporarily suspended custom foodservice citywide, the chain expanded its express offer for both hot and cold foods, adding more options. Then, four of the closed Philadelphia c-stores were converted into fulfillment sites for delivery and mobile order pickup.
The COVID-19 situation has been tough for everyone, but there is a positive aspect, Lore said. “As a workforce and as an industry, we are being recognized as an essential business—as essential as grocery stores,” he said. “There are places in the U.S. where people are a long way from a grocery store, but there are c-stores nearby. For those with limited transportation and in a quarantine situation, c-stores may be the best place for them to get the things they need, and I think that makes people think of our industry differently.”
Future of Food
One test for c-stores is the increasing demand for food delivery. Kwik Chek in Texas uses a third-party delivery service in some markets, but “when you think of DoorDash or Uber Eats, you think they’d be in all markets, but that’s not necessarily the case,” CEO Kevin Smartt said. “Or they might be in the market, but they may not deliver the entirety of the market. It’s hard to capture all of your stores through third-party service.”
Because some Kwik Chek locations are in rural areas or small towns, the company is open to working with small independent delivery providers. On April 1, the chain began working with a local delivery startup serving Bonham, Texas (pop. 10,123).
“We’ll have to see how the economics work out for someone like that in a small market,” said Smartt. “It will be interesting to see the quality of service and how customers adopt somebody that’s not well known. We’re excited that there are opportunities, and we’ll see how it goes.”
Smartt predicts that the convenience store industry will continue enhancing the quality of its food offerings, converting more diners to upscale gas station cuisine.
“Convenience stores in general continue getting more sophisticated and better at food,” he said. “I think we’ll continue to increase share of market within the fresh food category. Customers are much more open minded and willing to have a great food experience in a convenience store. The future is pretty bright for us.”