Prepared food is the heavy hitter of convenience store foodservice. Of the five foodservice categories (prepared food, commissary, hot dispensed, cold dispensed and frozen dispensed), prepared food enjoys the most sales, accounting for 69.5% of all foodservice sales. 

“In 2021, prepared food brought in $32,081 in sales per store, per month, which was an increase of 21.1% from the previous year,” said Jayme Gough, research manager at NACS.

Gross profits of prepared food also increased, “despite a margin decrease of 1.36 points to 57.68% in 2021,” she added. “Gross profit totaled $18,505 per store, per month. That’s a double-digit increase of 18.3% from 2020.” 

In 2022, average monthly prepared food sales started off at $30,324 in January and hit a peak of $42,038 in August. “It’s important to take that with a grain of salt considering inflation,” Gough said. “Last year, prices for food at home jumped 11.8%, and food away from home increased 8.3% according to the Bureau of Labor Statistics.”

Menu Magic

“Our motto is ‘sell them what they want,’ so we look at the data,” said Jimmy Crowder, director of food innovation at Texas-based TXB. “Our TXB Kitchen focuses on core items, and on quality versus quantity. Data will tell you what customers are buying. If we add something, we try to take something away, and our data tells us what needs to go. At the end of the day, we want to be great at a few things rather than mediocre at a lot. We don’t try to be everything to everybody.” 

We play around in our kitchens and test things, but we stay true to our core.

That attitude is echoed by Neon Marketplace, based in Massachusetts. When the store first opened during the pandemic, “We had a Cheesecake Factory-like menu, where we offered tons of things,” said Elise Babey, senior manager of product development and supply chain. “We’re still learning to find a balance. Making sure we’re consistently providing an elevated, quality experience is more important than offering 10 types of global cuisines and a cherry on top.” 

Today, the chain concentrates on “great quality pizza, grinders, burgers, chicken sandwiches and coffee,” she said. “I like to say we’re a C-QSR.  We’re a convenience store, but we operate our kitchen in a QSR model.”

Curby’s Express Market opened its first store, in Lubbock, Texas, a year ago and soon will have four locations. Tony Sparks, head of customer wow, said the 4,000-square-foot stores “can do anything Panera can do. Half of the store is traditional c-store items, and the other half is foodservice. About 67% of sales are on the QSR side.”

Curby’s menu ranges from toasted burritos and flat-bread pizzas to wraps, salads and four different kolaches, but the showcase offering is melts. “No one does melts in a meaningful way, so that’s our primary line of food,” said Sparks. “With melts, you’re only limited by your imagination.”

“The biggest gap between the haves and have-nots in foodservice is how dedicated they are from top to bottom to treating the business like a QSR, dedicating themselves to everything necessary for foodservice,” he added.

LTOs and Upgraded Offerings

In today’s strained environment, some retailers are putting less emphasis on LTOs or making them available for longer periods. Others are focusing on unique offerings but simultaneously testing products that could become permanent fixtures on the menu.

Neon Marketplace looks to the changing seasons for LTO inspiration. “Before Valentine’s Day, we offered red velvet whoopie pies, chocolate-dipped strawberry milkshakes and red velvet cookies,” said Babey. “For spring we’re doing lavender lattes and lavender lemonade and white chocolate macadamia cookie minis made in-house.” 

In addition to autumn’s pumpkin spice flavors, Neon Marketplace offered a fall harvest pizza. “We roasted butternut squash in-house and added herb cream sauce, fresh arugula and caramelized onions,” she said. “It was so good—like taking a bite out of Thanksgiving.”

At TXB, LTOs are where innovation happens, according to Crowder. “We play around in our kitchens and test things, but we stay true to our core. If something sticks, we run with it.”

The chain’s latest LTO is a brisket “quesabirria,” which marries a brisket quesadilla with a birria taco and includes a side of broth for dipping. “I always use core items as much as I can,” Crowder said.

Even after developing a robust food program, retailers can’t rest on their proverbial laurels. Last year, Iowa-based Kum & Go introduced grab-and-go breakfast burritos and made-to-order breakfast bowls. 

I like to say we’re a C-QSR. We’re a convenience store, but we operate our kitchen in a QSR model.

“Our grab-and-go burritos weren’t available when we originally rolled out our program in 2021, but we saw a need for them,” said Jac Moskalik, vice president of food innovation for Kum & Go. “We plan to evolve our existing food stores, and we start to integrate the new food even before we do complete remodels. We’ll always be in a state of innovation and feedback. That’s how we’ll continue to grow and succeed.”

Turnkey Wins

Some retailers don’t have the necessary kitchen space or resources for creating a proprietary program. That’s where turnkey programs can fill in the gap.

Chad Ellis is retail division manager for Horizon Resources in North Dakota, which has Cenex-branded c-stores. When looking for a hot-food program two years ago, he turned to Hunt Brothers Pizza. “They came in and cooked a pizza,” he recalled. “I thought it was outstanding.”

And customers agree. The program is a hit, plus pizza patrons “typically buy a pop or Gatorade, and sometimes chips, too,” he said. 

According to Dee Cleveland, director of marketing for Hunt Brothers Pizza, the program “is designed to work with a store’s existing labor and is simple to operate even with one employee in the store. It fits well in communities that may lack quality hot food options or where c-stores may be the most affordable and convenient option.”

We want to be great at a few things rather than mediocre at a lot.

With no franchise or royalty fees, Hunt Brothers helps c-stores drive sales by providing ongoing employee training and marketing support. Customization is an essential part of the customer’s made-to-order experience, and “the 1,024 topping combinations at one price sets our store partners apart,” she said.

Turnkey programs are available for everything from sandwiches and wraps to barbecue, Latin cuisine and fried chicken. 

We’ll always be in a state of innovation and feedback. That’s how we’ll continue to grow and succeed.

Krispy Krunchy, a Cajun-style fried chicken offering with sides and snacks, is a good fit for metropolitan stores with high foot traffic or rural stores in areas with limited QSR offerings, according to Dan Shapiro, CEO of Krispy Krunchy.

“There are no franchise or royalty fees, and we assist with inventory management, margin and labor control and pricing,” he said. “In addition to the first week of training at the location, we have a video library showing every part of our program. It’s accessible to our operators, as well as for retraining when a new crew is hired.”

Despite its proprietary in-house offerings, some TXB stores have turnkey programs, including Subway, Papa John’s and Church’s, depending on the location. No franchisees are involved, and TXB manages the programs in-house. “There are a lot of opportunities going that route,” said Crowder. 

And there are a lot of opportunities for c-store operators who focus on quality food made on-site.

“The whole business model will change,” Babey predicted. “In the future, when people are creating a business—a small store or a big chain—they’ll be looking at more of a c-store-slash-restaurant. What they’ll get in return is the untapped market of customers who aren’t now eating their meals in c-stores.”