Convenience Store Foodservice - US - March 2014
Scope and Themes
 
What you need to know 
Convenience stores have emerged as a competitive player in the foodservice scene, as many stores have refocused their sales strategies toward fresh, made-to-order foods and beverages. Mintel reports approximately 58% of adults aged 18+ have visited a convenience store for food and beverage items during the last three months. However, white space still remains. Consumers are asking for fresher foods with healthier halos, along with an expansive beverage program, but still desire indulgent foods at a low price. Operators need to strike the right balance in order to attract new customers while retaining their core. With an estimated 34% sales growth from 2013-18, market share remains an uphill battle for all involved. 

This report builds on the analysis presented in Mintel’s Convenience Store Foodservice—US, February 2013, as well as the March 2012 and March 2011 reports of the same title. 

Definition 
For the purposes of this report, Mintel defines convenience stores as establishments that retail a limited line of goods, primarily groceries and ready-to-consume beverages and snacks, and are in easily accessible locations. The majority of convenience stores also sell motor fuels.

According to the National Association of Convenience Stores, common characteristics of convenience stores are:

●	Building size of less than 5,000 square feet
●	Stock of at least 500 stock-keeping units (SKUs)
●	Off-street parking and/or convenient pedestrian access
●	Extended hours of operation, with many open 24 hours a day, seven days a week

This report includes food and beverage sold as “freshly” prepared or made-to-order. The report does not include retail/grocery food items such as packaged food, candy bars, bottled sodas, etc. 

Value figures throughout this report are at retail selling prices (rsp) excluding sales tax, unless otherwise stated. 

Data sources
Mintel Menu Insights
Mintel Menu Insights provides flavor, ingredient, preparation, and price trend analysis, drawing from the menus of the largest 350 chain restaurants as well as 150 independent restaurants, 50 restaurants run by top chefs, and 25 beverage-focused restaurants.

Sales data
Market Size and Forecast: Based on U.S. Census Bureau, Annual Retail Trade Survey and EconomicCensus; NACS "State of the Industry Report"/Mintel

Consumer survey data
For the purposes of this report, Mintel commissioned exclusive consumer research through GMI to explore consumer attitudes and behaviors toward convenience store foodservice. Mintel was responsible for the survey design, data analysis, and reporting. Fieldwork was conducted in January 2014 among a sample of 2,000 adults aged 18+ with access to the internet.

Mintel selects survey respondents by gender, age, household income, and region so that they are proportionally representative of the US adult population using the internet. Mintel also slightly over-samples, relative to the population, respondents that are Hispanic or Black to ensure an adequate representation of these groups in our survey results and to allow for more precise parameter estimates from our reported findings. Please note that Mintel surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in the survey results.

While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (white, black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.

Abbreviations and terms
Abbreviations
The following is a list of abbreviations used in this report: 

ACV 	All Commodity Value	
BFY 	Better-for-you	
BLS 	Bureau of Labor Statistics	
C-Store 	Convenience Store	
CDC 	Centers for Disease Control and Prevention 	
CPG 	Consumer Packaged Goods	
CPI 	Consumer Price Index	
DPI 	Disposable Personal Income	
FDA 	Food and Drug Administration	
MULO 	Multi Outlet, representative of the following channels: total US Grocery, Mass, total US Drug, total Walmart, Dollar, Military, and Club	
LSR 	Limited-service Restaurant	
MTO 	Made to Order	
NACS 	National Association of Convenience Stores	
NCS 	National Consumer Study (Experian Simmons)	
NHCS 	National Consumer Study /National Hispanic Consumer Study (Experian Marketing Services)	
RSP 	Retail selling price	
QSR 	Quick Service Restaurant	

Terms

The following terms are used in this report: 

Chain 	Multiunit foodservice concepts operating under a single brand name, such as McDonald’s or Pizza Hut. A restaurant chain consists of two or more restaurants owned by one person or company. Typically all restaurants in a chain have similar décor and serve the same food.	
Consumer unit 	Defined per the Bureau of Labor Statistics (BLS) as either: 1) All members of a particular household who are related by blood, marriage, adoption, or other legal arrangements; 2) A financially independent person living alone or sharing a household with others, or living as a roomer in a private home or lodging house, or residing in permanent living quarters in a hotel or motel; or 3) Two or more people living together who pool their incomes to make joint expenditure decisions. Financial independence is determined by the three major expense categories: housing, food, and other living expenses. To be considered financially independent, a respondent must be able to provide at least two of the three major expense categories.	
Fast casual 	A hybrid segment of fast food and casual dining, combining the convenience of limited service with the ambience and quality of full service. Defining features include check averages of $6-9; décor that is more sophisticated than a quick-service restaurant (QSR); and food prepared to order, with customization of ingredients by patron being the norm. 	
Fast food 	Used interchangeably with QSR.	
Foodservice 	All places that prepare food outside the home are included as part of the foodservice industry, including food operations in supermarkets, schools, hospitals, factories, and prisons. Restaurants make up the largest part of the foodservice industry.	
Franchise 	In most franchise agreements, a restaurant owner grants another person or company the right to use the name of his/her restaurant. This right also includes the use of the original owner’s patented products, building designs, and trademarks. In return, the original owner receives a fee. In addition, the franchisee usually pays a percentage of the restaurant’s income to the original owner. 	
Full-service restaurant 	Establishments that provide table service. Food is ordered at the table and is paid for at the end of the meal. The segment comprises several subsegments, differentiated primarily by check size. These include family/midscale restaurants and casual dining restaurants.	
Independent 	A single restaurant that is not part of a chain. 	
Quick-service restaurant (QSR) 	For the purposes of this report, QSRs consist of all restaurants without table service, excluding pizza, coffee, smoothie, snack, ice cream, and fast casual shops. 	
Systemwide sales 	These include a chain’s sales from company-owned stores, franchised stores, and affiliates. They exclude money derived from non-restaurant revenue streams (eg, interest). 	
Units 	The number of stores operating within a chain.	

Generations are discussed within this report, and they are defined as: 

World War II 	The generation born in 1932 or before. In 2014, members of this generation are aged 82 or older.	
Swing Generation 	The generation born between 1933 and 1945. In 2014, members of the Swing Generation are between the ages of 69 and 81.	
Baby Boomers 	The generation born between 1946 and 1964. In 2014, Baby Boomers are between the ages of 50 and 68.	
Generation X 	The generation born between 1965 and 1976. In 2014, Generation Xers are between the ages of 38 and 49.	
Millennials* 	The generation born between 1977 and 1994. In 2014, Millennials are between the ages of 20 and 37.	
iGeneration** 	The generation born from 1995 to present. In 2014, Matrices are aged 19 or younger.	

*also known as Generation Y or Echo Boomers

** previously known as Post-Millennials, Matrix Generation

In order to provide an inflation-adjusted price value for markets, Mintel uses the CPI to deflate current prices. The CPI is defined as follows: 

CPI 	The Consumer Price Index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
The CPI and its components are typically used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the national income and product accounts. In addition, and in Mintel reports, the CPI is used as a deflator of the value of the consumer’s dollar to find its purchasing power. The purchasing power of the consumer's dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. 
The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase, at today’s prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period. It is also the best measure to use to translate retail sales into real or inflation-free dollars.
Based on Bureau of Labor Statistics definition.