Opinion: Is Foodservice a False God?

The gap is growing between the c-store haves and have-nots

By
Mitch Morrison, Vice President & Group Editor

Foodservice--it's the rage, it's the cure, it's the antidote to lagging store revenues.

It's also Steinbeck's "Grapes of Wrath," a $31-billion gold rush with too many rushers and too little gold.

For all too many of you, on-the-go foodservice is not cooking up the profits you expected. In a stunning revelation, preliminary figures from the recently released NACS State of the Industry Report of 2010 Data show a jarring disconnect between the supposed industry-wide c-store foodservice success story and what's really happening on the street.

[image-nocss]Its findings: Top-quartile convenience-store operators are mastering foodservice to a tune of over $27,000 per store, per month. But look at the remaining 75% of c-store ops and the findings are more than disconcerting: second quartile, $19,000; third quartile, almost $12,000; and bottom quartile, just a tad over $8,000--not even one-third of its top-quartile colleagues.

This, by the way, is just the sales figures. Not included are the myriad costs for labor, waste, equipment purchases and upgrades, marketing or merchandising.

What's happening?

We're seeing a staggering division between the haves and have-nots. Those long in the foodservice game like Wawa and Sheetz have mastered the art of made-to-order. Others with outstanding managerial and operational infrastructures and capital resources like QuikTrip, Holiday Stationstores and Kwik Trip have honed built-in commissary models. And a tier of mid-size retailers like Parker's, Rutter's Farm Stores, Family Express and Nice N Easy have excelled based on design, high quality and menu diversity.

These chains, though, are the exception, not the rule. Most c-store operators define foodservice as a roller grill, some prepackaged sandwiches and adequate coffee. These operators are the norm.

Let me be clear--I'm not criticizing these companies. Many simply lack the wherewithal to run a serious foodservice offering but feel they must have a toe in the water. Others have introspected and concluded that their future is in tobacco, cold vault, candy and snacks or other easier-to-manage drivers. For them, the modest foodservice offering is to complement the market basket, not to drive it.

Foodservice is complex and costly. If done poorly, it can quickly spoil an otherwise well-run business. If you're not invested, keep it simple, but don't call yourself a serious foodservice operator.

So the question is: Are you really in the foodservice game? For many of you, the true answer may be no.

Agree or disagree? Email Mitch Morrison at mmorrison@cspnet.com and let us know if we can publish your comments.

By Mitch Morrison, Vice President & Group Editor
View More Articles By Mitch Morrison