7-Eleven Leveraging Fresh Food 'Competitive Advantage'

C-store giant seeking to out-Sheetz Sheetz, out-Wawa Wawa

Published in CSP Daily News

DALLAS -- 7-Eleven Inc. is banking on consumer interest in quick fresh food offerings. With more consumers willing to visit a convenience store for a quick meal, 7-Eleven is aiming to build a name for itself competitively, much as Starbucks and Walgreens have made bigger pushes into food.

Company officials say food sales are helping offset sagging tobacco sales, according to a report by The Chicago Tribune.

Last year, 7-Eleven rolled out Pillsbury cinnamon rolls, mozzarella sticks and more breakfast items, including a $1 chicken biscuit sandwich and hash brown bites, in its hot food cases. Sandwiches such as chicken with Sriracha on a pretzel bun appeared in the cold case. And lately, it has been pushing take-and-bake pizzas, as well as giving customers the option of having the $5.55 pies cooked on the spot.

Last week, the chain introduced its Egg White Breakfast Sandwich, a $1.99 creation featuring Canadian bacon and cheddar cheese on a whole wheat English muffin, at 180 calories.

"There's been a major focus on the push for fresh foods," Kelly Buckley, vice president of fresh food innovation for 7-Eleven, told the newspaper. "We know that is an area where we have a competitive advantage. Part of our key differential here is, we have fresh bakery items and cold sandwiches and wraps and cut fruit."

On the better-for-you front, the stores are offering rotating cold offerings seasonally. The chain offered a berry salad in the spring and summer, and a bacon, lettuce and tomato salad in the fall. It also has added a line of premium wines ($55 a bottle) to about 800 stores.

Officials say they are pleased with the results. Same-store fresh food sales grew by 11% from 2009 to 2013. Overall, during the same period, fresh food sales grew 58%, largely because of the chain's growth. It added 1,000 stores in 2012 and counts more than 10,000 stores in North America.

The Dallas-based company decided two years ago to invest more in the development of fresh food. Buckley, who headed food innovation efforts at Applebee's and Pizza Hut, came aboard and assembled a team of food scientists, culinarians and engineers, said the report.

"We need to be looking broader in terms of what are our future offerings going to be to grow our business and play to our strengths," she told the Tribune.

C-stores "already got you for the snacks," Harry Balzer, chief industry analyst for NPD Group, Chicago, told the paper. "They would really love it if you went there for main meals now. A lot of places, including drugstores, supermarkets and supercenters, are offering prepared meals."

Conversely, restaurants are more focused on drawing in customers for snacks.

"It's a battle for that dollar," Balzer said. "From 6:30 in the morning until 8:30 at night, I can find 50% of the population every hour eating. Now, the question is, 'Can I make sure you come to me for that food?'."

The chain is trying to replicate the successes of chains such as Wawa and Sheetz with customized sandwiches and prepared foods, Darren Tristano, executive vice president at Technomic Inc., a Chicago-based food industry consultancy that puts the convenience store foodservice industry at about $11 billion, told the paper.

"Convenience stores have had success and are increasing their foodservice because they have a strong advantage of convenience over fast-food restaurants," he said. "Brands like 7-Eleven are increasing their investment in trying to take advantage of these opportunities. It's an evolution, and customers are beginning to recognize that C-stores are places where they can find quality, prepared foods."

According to a Technomic report, nearly half of consumers polled said they are seeking more fresh options at c-stores than they were a year ago. About 42% said the shops are doing a good job offering fresh foods. About 59% of consumers polled, and 63% of the women asked, said they are seeking more healthful food items at c-stores than they were a year ago. But they said there's a lot of room for improvement. Only one-third strongly agreed that the stores do a good job providing those options.