How a Reputable Foodservice Program Can Make a Huge Difference In Your C-Store
Tobacco and fuel… Once the staples of your entire c-store, they now are starting to fail you. From rising tobacco taxes and decreased usage to slipping fuel margins, your cash cows are drying up. What’s going to help make up the difference? That’s where an in-store foodservice program can fill your revenue gaps.
But, but, but…
I can hear it now, just from reading the opening paragraph, the majority of you that are potentially looking to bring in a foodservice program are already thinking:
- “The margins are too small in the foodservice industry!”
- “People aren’t coming to my store for the food!”
- “I simply don’t have the space or the foot traffic to make the start-up cost worth it!”
- “I don’t want to manage the labor and training it takes to do foodservice!”
While those are reasonable assumptions, they can all be dispelled with the correct foodservice program for your location. Not all programs are created equally. Let’s dive into why these excuses don’t hold water.
The Margins Are Great
“The margins are too small in the foodservice industry!”
That couldn’t be further from the truth. If you want a program, while it could be more labor intensive, that delivers incredible margins then foodservice is the ticket. Recently CPS Daily News indicated that foodservice margins are at 57%… while non-food items were 27%. Yes, foodservice margins are DOUBLE what your other products are.
Not convinced yet? Well, you are becoming the minority. Almost 9 out of 10 store operators found that foodservice was a pivotal key to the success of their stores. It’s a massive industry, with massive margin potential.
When it comes to the foodservice industry, prepared food is the king and was #1 in gross profit dollars and sales according to the NACS State of the Industry Summary for 2016. With over 350% MORE sales than the #2 category, hot beverages!
People Want Convenient Food
“People aren’t coming to my store for the food!”
Humans naturally gravitate towards convenience. From a quick bite while on the road to grabbing a fast snack while filling up, foodservice once again ranks supreme at c-stores. In fact, according to the NACS Summary, foodservice ranked #1 for in-store gross profit dollars at 33.7%. Way behind at #2 was packaged beverages at 18.8%.
It’s a simple fact that if you get them in your store you have a great chance at selling foodservice items. Plus, your convenient location means returning customers! CSP indicated that 85% of all millennial (the largest age cohort in the United States) c-store customers come in more than once a week. That’s a staggering number and a good foodservice program can get people of all ages coming back for more time and time again!
More Affordable Than You Think
“I simply don’t have the space or the foot traffic to make the start-up cost worth it!”
Just for the sake of handling this objection, I’m going to use our own programs at PFSbrands to depict how quickly the payback period is for your startup costs. For instance, if you have 300 customers a day at a 10% capture rate, you can pay off your initial investment (for instance, $25,000) in less than 17 months. Then it’s all profit! You can manipulate the numbers on our exclusive calculator here.
Plus, when you choose a trusted name brand like one of our programs (Champs Chicken, Coopers’ Express) over half of c-store’s customers are more likely to increase their purchases… and that jumps to over 60% for millennial customers! It’s all about the trust factor!
Employee Training Makes the Difference
“I don’t want to manage the labor and training it takes to do foodservice!”
Finally, many owners feel that a foodservice program requires costly employee training. As a business owner you want to see a Return On Investment for employee training. In all honesty, investing in your people can provide the biggest bang for your buck. In the foodservice business you need to be in the people business – serving and helping them reach their potential. Employee training is just another method for doing that.
Here’s a great foodservice example, on average the Cheesecake Factory invests $2,000 per year on employee training. So? Well, they also enjoy sales of $1,000 per square foot… That’s nearly double the industry average. Think it’s an isolated occurrence?
It’s not. It’s a standard trend witnessed in the Best Companies to Work For. They on average devote 58 hours every single year to hourly employee development. This all equates to decreasing employee turnover, increasing profitability and improving your bottom-line.
If you’re still worried about getting your employees properly trained, the good news is that a few of the best foodservice companies have you covered. For instance, at PFSbrands we handle initial employee training and provide ongoing training for new and existing employees when it comes to our foodservice program. Plus, we have a video training library so your employees can always take a refresher course for best practices on food preparation and customer service… All of this at no additional cost to you! Decent ROI, right?
If you’re looking to generate revenue in your c-store (or grocery store), one of the best steps you can take is looking into a foodservice program. Make sure you find a reputable, trusted partner that will be with you each step of the way as they help you fill your revenue gaps. Stop making excuses and start making your foodservice program a staple of your business… the margins are too good to miss!