Convenience Retailers Embrace Foodservice to Drive Growth Amid Declining Fuel Trips

What's Happening?

Convenience retailing is undergoing significant changes as industry leaders focus on foodservice as a primary growth driver. The Outlook Report, presented at the Outlook Leadership Conference, highlights the importance of foodservice in attracting new traffic and revenue, especially as fuel trips decline. The report, developed through research and interviews with industry leaders, emphasizes that foodservice offerings are crucial for operators to succeed. App-based loyalty programs and retail media networks are increasingly used to engage consumers with foodservice items, appealing particularly to younger demographics. AI and automation are being applied to optimize foodservice execution, ensuring consistent quality and driving consumer satisfaction. The report suggests that foodservice differentiation, such as unique menu items, can lead to increased consumer visits and engagement with other store categories.

Why It's Important?

The shift towards foodservice in convenience retailing is significant as it addresses the challenge of declining fuel trips, which traditionally drove store traffic. By focusing on foodservice, retailers can create new revenue streams and enhance customer loyalty. The integration of technology, such as AI and automation, in foodservice operations can improve efficiency and margins, making it a vital component of business strategy. This trend is likely to benefit operators who can successfully differentiate their offerings, attracting frequent visits from consumers who are heavy users of foodservice. The emphasis on quality and consistency in foodservice can also enhance brand reputation and competitiveness in a crowded market.

What's Next?

Convenience retailers are expected to continue investing in foodservice strategies, leveraging technology to optimize operations and enhance customer experience. As app-based loyalty programs grow in popularity, retailers may expand their digital engagement efforts to include more personalized foodservice offerings. The focus on differentiation through unique menu items will likely intensify, with operators seeking to establish a strong identity in the marketplace. Additionally, the role of retail media networks in promoting foodservice items at the point-of-sale is expected to grow, providing opportunities for collaboration with CPG partners.

Beyond the Headlines

The emphasis on foodservice in convenience retailing reflects broader industry trends towards enhancing customer experience and leveraging technology for operational efficiency. This shift may lead to long-term changes in consumer expectations, with convenience stores becoming destinations for high-quality, craveable food options. The integration of AI and automation in foodservice could also set new standards for operational practices, influencing other sectors within retail. As foodservice becomes a key differentiator, it may drive innovation in menu development and customer engagement strategies.