THE ART OF

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COOLER MERCHANDISING SYSTEMS of a premium bakery offering.

“For 2023, our team will be focused on snacking and taking our pizza program to the next level to grow food sales in morning and afternoon dayparts,” Moskalik said.

Global Partners LP provides fresh food prepared on-site in full kitchens. “We have created a five-step program allowing growth to all our foodservice operations,” Almekies said.

Step 1 starts with a fresh bakery program that ranges from traditional bakery offerings to New York cheesecakes, apple empanadas, bread puddings and more.

“Our Step 2 facet is identified as ‘EXPRESS.’ These offerings are designed for a labor-challenged market that does not compromise on quality,” Almekies said. “We work closely with our key manufacturer partners to produce proprietary recipes and distribute to our sites.”

Global Partners also offers a freshly fried chicken program with a proprietary “secret sauce,” and sandwiches that are handcrafted on-site and available through the refrigerated grab-and-go section or customized as MTO options.

International food options are in demand. In Q1 to reintroduce familiar favorites that have a proven track record of success.”

“Sta ng is the most challenging piece of execution,” said Global Partners’ Joy Almekies, but she pointed to education as an opportunity. Educating key stakeholders on the importance of food programs, including front-line employees, so they understand the data and reasoning informing decisions can bring results.

The increasing cost of labor is among the many things pushing up prices at c-stores. Kwik Stop’s May noted managing supply chains, cost and negotiating the best prices is taking more time and will be a focus in 2023. He’s concerned about how customers will respond as food prices continue to escalate.

“A customer comes in and

Step 1 of Global Partners’ food program starts with a fresh bakery program.

Global Partners is introducing a Mexican-inspired offering, including LTOs, small-bite tacos, meals and on-thego snack choices for the late afternoon and evening.

Headquartered in Topeka, Kan., Street Corner launched its new MTO menu in 2022 and is seeing competitors follow suit.

“They want to add a premium service inside the store versus the roller grill items or something in the warmer,” said Vikram Dhillon, CEO of Street Corner, a franchise-only model with 44 locations in the U.S. “A lot of locations, mostly in metropolitan areas, are focusing more on bringing healthier food options and MTO fresh items, similar to what you see in Whole Foods, where they display the fresh ingredi- something they were being charged around $5 for, not more than 18 months ago, now they’re being charged almost $10 for that exact same meal,” he pointed out. “When are the customers going to say, ‘You know what? I can’t a ord to eat that anymore. I’ve got to go to the grocery store and cook my own food.’ When is that breaking point?”

Simplicity is going to be important in navigating food programs in 2023, Almekies noted. That includes identifying product mixes that drive business and using analytics to understand when to o er products, creating planograms by the hour to appeal to customers, she said.

In Street Corner’s market, Vikram Dhillon sees EV charging not only making foodservice more critical, but attracting high-end customers that are willing to pay for a premium product.

“When you talk about EV stations, that means the customer is sitting there for 15 to 30 minutes,” Dhillon said. “Your foodservice and your co ee program are going to be so crucial for those drivers (during that wait). If you have a solid food program, they’ll eat there and they’ll shop there.”

Dhillon is adamant about having premium foodservice at Street Corner because the chain aspires to be a leader in EV charging.

“People that drive EV cars, they have money to spend,” he said. “You have this high-end customer, they want a high-end product, and foodservice is where you’re going to make your money on that.” ents in a deli case, so people can see what they’re making versus just preparing food in the back and bringing it out ready-made.”

Today’s c-store customers want quality, prepared hot and fresh food, a variety of options, foods they feel good about eating and the ability to customize their order, and they want it all at a fair price.

Popular menu items at Street Corner include its naan bread pizza, with varieties such as Chipotle Chicken Pizza and Chicken Alfredo Pizza.

“Then we also use the same naan bread, and we wrap it into a sandwich,” Dhillon said. Offerings include a Chicken Tikka Masala Sandwich, Steak Fajitas and a Banh Mi Chicken Sandwich.

“We want to become a hub for food versus just a convenience factor,” he said.

In 2023 Street Corner is focused on letting customers watch the food preparation process. The company’s chef designed the menu, of which 80% is the chain’s standard menu and 20% is dedicated to the local flair, so franchisees have the option to customize the menu. Kabob plates are among new local dishes launching in 2023.

All of Kwik Stop’s 27 locations feature grab-andgo foods. Twelve stores offer full-service delis with hot food. Six of those sites provide a Krispy Krunchy Chicken (KKC) program and four feature Kwik Stop’s Mexi Fresh program, which includes tacos, burritos and taco salads. Nine stores provide a Piccadilly Pizza program, while 12 stores offer the Kwik & Fresh program, which features nearly 50 items, including burgers, mozzarella sticks, jalapeño poppers and chicken sandwiches.

May minimizes overlap between programs.

For example, in Kwik Stop stores with KKC and Kwik & Fresh, chicken sandwiches are only offered from KKC. When growing the menu, May said he maximizes SKUs by getting creative with ingredients the chain is already ordering.

In 2023, Kwik Stop’s Mexi Fresh stores are introducing a fried chicken burrito, which uses chicken tenders from KKC. The item did well as an LTO and earned a slot on the Mexi Fresh menu starting in January.

Also in January Kwik Stop used a Piccadilly product to create Breakfast Bites, which are rolled up pizza crusts stuffed with items such as bacon, egg, cheese and sausage gravy.

“There (are) four bites in one container, and I’ll be able to market those for about $3.59, which is great for a consumer that’s coming in to get a breakfast,” May said. Rolled up, the product is easy to eat on the road, which May noted is important to customers.

“We try to minimize the number of SKUs we’re bringing in as far as supplies go, and we’re trying to work with that, so we’re not expanding our order book. ...” May said.

May observes other food operations to see what’s trending. When he saw some QSRs running a Buffalo, Pepperoni and Bacon Pizza, Kwik Stop worked on its own version in its test kitchen and rolled it out as an LTO at the end of 2022. May expects it to get a place on the regular menu sometime in 2023.

Integrating Foodservice Tech

Technology skyrocketed to the forefront of c-store foodservice operators’ plans during the COVID-19 pandemic, and the trend is continuing in 2023 across c-store chains. C-stores are in various stages of their technological journey, but all eyes are on how technology can provide efficiencies and boost foodservice revenue in 2023.

Across the board retailers are implementing or considering mobile ordering, drive-throughs, order ahead and delivery, as well as using data from loyalty programs to better identify guests’ patterns and interests.

Kwik Stop is introducing its first drive-through at its 28th store, set to open in North Platte, Neb., later this year. The store will also be the chain’s first ghost kitchen site.

“We’re not going to actually have stuff out in the store for people to grab and go,” May explained. “They’re only going to be able to call in, order by app, order delivery or come through the drive-through.”

The ghost kitchen is expected to help reduce waste at the site.

“As we continue through this type of economic environment that we’re currently in, a ghost kitchen made more sense than having something out and about,” May said, particularly with this location where summers will be strong but off-peak months might be slower.

Street Corner is also focused on drive-through. It currently has one drive-through and plans to include them at all new stores with fuel going forward. Dhillon said drive-throughs are key for attracting that 70% of customers that pump gas and leave without entering the store. The convenience and accessibility of drive-throughs can encourage more customers to order food.

“I think it’s crucial now to have a drive-through,” he said. “I think it’s a standard now, especially in major metropolitan areas.”

Street Corner customers can also order in-store, online or via the app, and last year the chain introduced ordering at the gas pump.

“You can order an entire menu at the pump while you’re pumping gas,” Dhillon said. Guests can receive the order via the drive-through, in-store or have it delivered to them at the pump.

On the delivery front, Street Corner is piloting a program with a company that acts as the middleman between Street Corner and third-party delivery platforms like Grubhub. Street Corner pays a flat monthly fee for the service and no longer has to calculate fee deductions from each order.

Predicting Sales Trends

Most retailers have seen foodservice traffic recover since the pandemic, with sales growth in 2022, and expect food sales to continue to rise in 2023.

In 2022, Kum & Go, for example, was trending 6-8% above 2021 in sales, depending on the week or time of year, Moskalik noted. The chain expects to see the same growth in 2023, if not more, given its focus on innovative product offerings that resonate with its target customers and meet shoppers’ daypart needs.

“Foodservice sales are leading our sales trends with double-digit growth since the pandemic started,” said Dash In’s Nova.

Dash In saw a 22% overall increase versus the previous year, including a 34% increase in breakfast in 2022. Nova expects to see foodservice sales continue to rise in 2023 as inflation grows and customers trade down from full-service or QSRs to c-store food. Meanwhile, Nova sees c-stores offering higher-quality food and increased innovation, which are giving c-store food the edge over competition.

Kwik Stop, which is located in rural areas, fared well during the pandemic with sales bouncing back after the first month. Dollar sales were up 13% for the chain in 2021 and units grew by 9%, but in 2022 inflation caused unit sales to decline. May expects same-store sales to be flat in 2023 due to supply chain issues, inflation and potential oil price volatility.

Kum & Go is passionate about offering healthier options. Customers ordering breakfast bowls from Kum & Go’s madeto-order menu can customize the meal, swapping breakfast potatoes with wilted spinach, etc.

Kum & Go predicts growth ahead for its foodservice segment given its focus on innovative products that meet customers’ daypart needs, such as the Banana With Nutella Stacker, pictured right.

“We’re starting to see supply chain issues creep up on us again where we’re not always able to get all the product that we currently offer,” May said.

WHAT DO CUSTOMERS WANT?

“Customers are demanding quality prepared food, made within an acceptable time frame, made accurately and at a fair value,” Nova said.

Customers also want hot and fresh food, a variety of options, foods they feel good about eating and the ability to customize their order, retailers agreed.

“The educated consumer is not necessarily seeking the least expensive item, however the item must be perceived as ‘worth the cost,’” Almekies said. “They are seeking variety, however, they want to depend on core offerings that are simple to handle and eat.”

While quality, value and convenience have always been important, the expectations around each have shifted, Ekman said.

“For us, freshness translates to reducing the time between food preparation and food consumption. Food quality in our channel is at its highest when you start with good ingredients, handle them with care, and minimize the time between when products are made and when they are enjoyed by our guests,” he said.

Value can also mean different things to different guests, with some focused on price point and others looking at cost to quality ratios.

“A balanced approach to the offer where we can maintain some value options that are easy to execute while also highlighting premium offers allows us to reach more guests than picking a single focus,” Ekman said.

While convenience relies on having the right assortment in stock, c-stores today are challenged to make convenience even more convenient.

“That could entail leveraging digital capabilities through a loyalty app to allow for order ahead or even suggest favorites to our guests based on past purchase behavior,” Ekman said. “Assisting our guests in making decisions creates less friction and ultimately a more convenient offer.”

Some c-stores have seen dayparts shifting as customers, working from home, are waking up later.

“That morning rush is not there anymore,” Dhillon said. The 6 a.m. to 8 a.m. morning rush has been pushed to 8 a.m. to 10 a.m., and in many stores the rush doesn’t come until lunchtime, which has shifted from 11 a.m. to 1 p.m.

Customer demand for plant-based products, including plant-based milks at the coffee bar, is also a growing trend.

“People want more vegan options for their pizzas,” Dhillon said. “They want vegan cheeses. They want gluten-free bread. That is growing tremendously.”

He even sees these trends coming to smaller towns where people are increasingly health conscious.

Meanwhile, Kum & Go sees c-store grocery assortments offering c-stores the edge over the competition.

“We benefit in (the) convenience of having a fullscale assortment for anything a consumer might need to pick up while grabbing breakfast or lunch, such as staples like milk, eggs, bottled beverages, etc.,” Moskalik said. “For a consumer who is looking for a fast, quality meal, they’ll choose a convenience store over others because we are faster than (the) supermarket and have an assortment that rivals any QSR or fastcasual establishment.”

As 2023 pushes forward, c-stores have the programs, locations and speed-of-service to win the battle for foodservice dollars, but it’s the little things that will determine who wins the sales. Executing high-level, consistent service every day with great food at a fair price still goes a long way. Make sure they are not overlooked. CSD