For a decade or more, convenience-store chains have been beefing up their foodservice offerings and posing a growing competitive threat to restaurants.
While C-store chain leaders in Nation’s Restaurant News’ latest Top 100 report, such as Wawa and Sheetz, have been innovating for years with self-ordering kiosks and specialty foods, Casey’s General Store has been aggressively carving out a unique niche with scratch-made pizza, including delivery right out of its locations.
“Casey’s is consistently a standout among concepts increasing store-level foodservice sales,” said Alan Liddle, NRN’s data and event content director.
In the Latest Year, the Ankeny, Iowa-based C-store chain grew systemwide sales by an estimated 8.8 percent, in addition to 12.7-percent growth in the Preceding Year. Casey’s has nearly 2,000 units.
Casey’s began offering scratch-made pizza in 1984. The chain now says its pizza is available in 99 percent of locations, or 1,954 units, as of April 30, 2017. The C-store further turned up the heat on quick-service and pizza chains in 2011, when it began to offer pizza delivery at select stores. It was at it again a few years ago, when it added online ordering.
“When you’re doing pizza delivery out of your C-store, that’s committed,” Liddle said.
Pizza is Casey’s most popular prepared food item, although the chain also continues to expand on other prepared foods, which now include everything from chicken tenders and breakfast sandwiches to hamburgers and doughnuts made on site.
Although it has only mid-pack average unit foodservice sales volumes, Casey’s has led the C-store segment in Estimated Sales Per Unit, or ESPU, growth for many years. In the Latest Year, Casey’s posted 6-percent growth in ESPU.
Also helping Casey’s carve out a deeper niche is its focus on remodeling stores and extended hours. During fiscal 2017, Casey’s completed 103 major remodels and opened 48 new-build stores. Additionally, although most of its stores are open for 16 hours a day, 995 Casey’s locations are now open for 24 hours a day.
Casey’s plans to continue to expand its unit count with a mix of new construction and acquisitions, including a recently announced potential acquisition of 784 Kroger’s convenience stores.
The four other chains that make up NRN’s Top 100 C-store segment — Wawa, Sheetz, 7-Eleven and Circle K — continue to get closer to restaurants.
For example, 7-Eleven, which has been the Top 100 sales leader for many years, based on its large number of stores and a growing emphasis on foodservice, has recently been adding more restaurant-quality offerings. The chain once best known for its roller hot dogs, neon-colored Slurpees and Big Gulps, recently added locally made offerings such as chicken parmesan, macaroni and cheese, chipotle chicken bowls and breakfast meals, at stores in select markets.
With the Top 100 C-store segment posting the third-highest year-over-year growth in total U.S. units in the Latest Year, and the third-highest average ESPU growth in the Latest Year among the tracked Top 100 segments, the competitive threat to restaurants appears certain to continue.