Diving Into the Data
— Retailer respondent
“
“
Regulation to Prohibit the
Use of Menthol in Cigarettes
and RYO Tobacco:
In April 2022, the FDA published a proposed product standard regulation prohibiting the use of menthol as a characterizing flavor in cigarettes, roll-your-own (RYO) tobacco, and heat-not-burn products. The public comment period ended on Aug. 2. A final rule/regulation is expected to be adopted by the FDA sometime in August 2023.
Regulation to Prohibit the Use of Characterizing Flavors in Cigars:
Also in April 2022, the FDA published a proposed product standard regulation prohibiting the use of characterizing flavors in cigars, except for tobacco flavor. The public comment period ended on Aug. 2. A final rule/regulation is expected to be adopted by the FDA sometime in August 2023. When the FDA issued the proposal, the agency stated that the effective date would be one year after the final rule is published.
Potential Regulation for Maximum Nicotine Level in Cigarettes
and Other Tobacco Products:
In June 2022, the FDA announced that the agency would propose a new regulation setting a maximum level of nicotine in cigarettes and certain other tobacco products. The other products that could be subject to this regulation were not specified. A proposed rule/regulation is expected to be published sometime by October 2023 and will be followed by a public comment period. When the proposed rule is published, the FDA may identify a timeframe for the new rule to go into effect.
45%
cigarettes
sponsored by
PRODUCED by
Total Industry In-Store Sales
$223.6
$51.7
$275.3
4.0%
19.5%
6.6%
Merchandise
Foodservice
TOTAL
Foodservice is fully back as a c-store leader. After a COVID decline, the category
has now posted two consecutive years of double-digit sales increases.
$54,956
Foodservice Segment Share
As goes prepared food, so goes the overall foodservice category, as the segment edges ever closer to capturing a full three-quarters of category sales.
2022
74.8%
15.0%
6.8%
3.4%
Prepared food (prepared on-site or off-site)
Hot dispensed beverages
Cold dispensed beverages
Frozen dispensed beverages
Unit Volume
25.6%
9.4%
55.1%
5.0%
4.3%
0.6%
0.0%
Breakfast sandwich
Pizza
Hot dog
Deli/sandwiches
Hamburger
Other breakfast foods
Chicken
Hot snacks (non-French fries)
Fresh baked goods
French fries
Salad
Purchase incidence of breakfast sandwiches jumped over the last year,
putting it ahead of c-store standards like pizza and hot dogs.
Types of Prepared Foods Purchased
at a Convenience Store
1. Foodservice Is Strong Across the Board:
Individual segment growth ranged from 9.1% to 20.9% in average sales per store last year. This means that c-store retailers looking to establish themselves as a foodservice destination need to take a whole-category view and build a strategy for all dispensed beverage types as well as prepared food.
2. The Commuter Market Is Growing:
Nearly two-thirds of convenience foodservice shoppers (64%) report consuming their prepared food purchases outside of the home, up 8 points from a year ago. Within this group, the percentage of shoppers who eat in their car or at work is on the rise, indicating a shift in habits as consumers return to the office or embrace a hybrid schedule.
3. Price Is a Concern:
Consumers are tightening their purse strings in the face of rising costs. The percentage of shoppers who say they didn't buy prepared food at a c-store in the last month because it was too expensive jumped 15 points year over year. Price/value is now the No. 1 factor shoppers list as being important to them when purchasing prepared food at a c-store.
4. Shoppers Have Flexible Preferences:
Made-to-order/freshly prepared is the clear winner when it comes to the kind of prepared food that
c-store shoppers would rather buy, with 52% citing
it as their preferred option vs. just 31% who prefer
grab-and-go/refrigerated. However, when asked about their actual purchases within the past month, 40%
of shoppers bought made-to-order, 34% bought
grab-and-go and 25% bought a combination of both, demonstrating that c-store shoppers will go with what's available over what's ideal.
The average gain in foodservice sales per store in the last year, driven by an additional $44,845
per store from prepared foods.
Percent change in total sales
Margin percentage
Share of in-store sales
Five-Year Trend: Foodservice
Foodservice sales have clearly bounced back from their 2020 COVID dip, posting total sales
increases of roughly 20 percent for the last two years.
2022
2021
2020
2019
19.5%
44.26%
2018
8.1%
-1.4%
31.10%
8.14%
8.3%
5.3%
30.75%
8.12%
7.74%
29.15%
0.8%
13.7%
23.5%
5.5%
27.65%
6.84%
The Consumer View
What's Trending
1
2
3
4
9% cigarettes
7% cigarettes
6% cigarettes
4% cigarettes
39% OTP
9% OTP
8% OTP
6% OTP
4% OTP
Share of In-Store Sales
2022
2021
2020
83.2%
16.7%
81.2%
18.8%
85.2%
14.8%
Merchandise
Foodservice
Foodservice continues to gain share of in-store sales, seeing a 2-point gain in 2022 at the expense of merchandise.
2022
% change
2022
% change
20.9%
14.8%
9.1%
13.5%
18.8%
$259,786
$52,141
$23,692
$11,813
$347,432
$38,630
$7,753
$3,523
$1,757
$51,663
21.6%
15.5%
9.8%
14.2%
19.5%
Sales per Store
Industry Total (in millions)
Prepared food (prepared on-site or off-site)
Hot dispensed beverages
Cold dispensed beverages
Frozen dispensed beverages
TOTAL
Category Analysis: Foodservice
While not as strong as the increases posted in 2021, all foodservice segments posted double-digit increases in 2022 industry sales.
2022
9.8%
7.8%
Cold dispensed beverages
Packaged beverages
Fountain vs. Cold Vault
Cold dispensed beverages beat packaged beverages in sales growth on a percent basis in 2022, but packaged beverages retained an almost out-of-sight lead in total industry sales ($37.7 billion vs. $3.5 billion, respectively).
2021
10.3%
10.9%
2020
-23.7%
3.9%
Source: Convenience Store News 2023 Realities of the Aisle Study
40%
30%
22%
19%
17%
17%
16%
16%
13%
11%
11%
Among health-conscious and health-neutral shoppers,
only 41% say they are somewhat satisfied with the
selection of healthy/better-for-you foods at c-stores,
leaving room for improvement.
Prepared food purchases remain steady from late morning through early evening, with a slight shift toward the 4 p.m.-6:59 p.m. daypart compared to a year ago.
Time of Day When Prepared
Food Was Purchased
6:00 a.m.-
8:59 a.m.
Source: Convenience Store News 2023 Realities of the Aisle Study
C-store shoppers have few complaints with their food,
as 64% say they were extremely or very satisfied
with their most recent prepared food purchase
at a convenience store.
Beverages are a key opportunity to boost basket size through meal bundling, regardless of the type of beverage.
Additional Items Purchased
With C-store Prepared Foods
35%
33%
32%
32%
23%
21%
20%
18%
15%
Source: Convenience Store News 2023 Realities of the Aisle Study
Consumers clearly want to get value for their money, but food quality, taste and freshness must accompany a good deal.
Most Important Factors
When Purchasing
Foodservice
Price/value
Food quality
Taste
Freshness
Convenience/on-the-go
Location
Speed of service
Sanitation
Menu choices
Customer service
Portion size
Presentation
Selection of brands
Availability of healthier options
Order ahead & pickup available
Delivery available
Drive-thru available
43%
37%
35%
33%
26%
21%
19%
16%
13%
13%
13%
7%
7%
6%
6%
5%
5%
Source: Convenience Store News 2023 Realities of the Aisle Study
Bottled/canned soda
Cold fountain/dispensed soda/drink
Bottled water
Coffee/tea/other hot beverage
Candy/gum
Packaged salty snack
Packaged sweet snack
Beer/malt beverage
Other bottled beverage
18.77%
20.5%
43.72%
16.75%
-9.9%
42.80%
14.75%
43.68%
5.2%
16.91%
43.71%
2.4%
16.50%
11%
9:00 a.m.-
10:59 a.m.
8%
22%
21%
22%
10%
4%
11:00 a.m.-
1:59 p.m.
2:00 p.m.-
3:59 p.m.
4:00 p.m.-
6:59 p.m.
7:00 p.m.-
9:59 p.m.
10:00 p.m.
or later
2022
2021
% change
Sales in billions:
(percent change in total sales)
$214.9
$43.2
$258.2
