Foodservice has become a key area of opportunity for convenience stores across the country. As revenues from gasoline and tobacco products fall, foodservice sales increasingly are becoming c-stores' most profitable category, according to Technomic Inc.'s Convenience Store Foodservice Consumer Trend Report. As more c-stores increase their focus on providing a wider variety of fresh, high-quality food offerings, competition is heating up within the market -- and the foodservice industry as a whole. C-stores are striving to gain a greater share of stomach and to compete with restaurants.
In many cases, foodservice drives c-store visits, said Chicago-based Technomic. Of those consumers who visit c-stores at least once every six months, nearly half (47%) indicate that they visit these locations for foodservice purchases at least once a week. Within this group, about a quarter (24%) visit two to three times each week and 8% visit daily for foodservice items.
C-stores are not top of mind, however, for many consumers as a place to source meals or snack, Technomic added. Technomic developed the Convenience Store Foodservice Consumer Trend Report with findings from an online survey of more than 1,500 consumers conducted in July 2010. About a fifth of consumers polled (18%) report that they rarely or never visit c-stores specifically to purchase items from the foodservice area. Because Technomic wanted to gauge the usage and preferences of consumers who purchase foodservice items from c-stores, these consumers were disqualified from the survey after this point.
Technomic asked consumers to estimate what percentage of all foodservice items typically purchased at c-stores are for breakfast, lunch, dinner and for snacks. The results reiterate the extent to which c-stores are primarily visited for snacks rather than for meals.
Consumers say that about 48% of the items they purchase at c-stores are intended as snacks. About a quarter (23%) of the prepared food and beverages consumers purchase at c-stores are for breakfast and a fifth (20%) are for lunch. Showing foodservice purchases by daypart also reinforces how low patronage is at dinner in comparison to other occasions. Only about 10% of consumers' total c-store foodservice purchases are for dinner.
A large proportion of the food that consumers order at c-stores is eaten in the car or en route to someplace. Options purchased for breakfast are most likely to be consumed in the car (72%), while walking or biking (26%) or on public transportation (21%). Although lunch from a c-store is primarily eaten in the car (55%) or at work (49%), two-fifths of consumers polled (40%) take items to eat at home or someone else's house.
Dinner, when sourced from a c-store, is most frequently eaten at home or someone else's home (65%), followed by in the car (45%). More often than breakfast or lunch, dinner is also eaten at the c-store (33%). Perhaps this is because stores are less busy at dinnertime hours and there is more seating available.
For snacking occasions, consumption in the car (57%), at home or someone else's home (55%) or at work (33%) is most common.
C-store customers say that they purchase some type of food or beverage on about half of their c-store visits, indicating that while foodservice is an important category for these stores, opportunities for growth still exist; however, while location is key to getting consumers in the door, restaurants still have the upper hand when it comes to perceptions of high-quality food and dine-in ambiance.
Although c-stores are already recognized as locations that excel when it comes to offering fast service, look for them to increasingly add features, like drive-thru service and call-ahead ordering, to further expedite transactions and compete with quick-service restaurants, said Technomic. In order to encourage more lunch and dinner purchases and in-store dining, it is likely that c-stores will expand their seating areas in years to come and offer free Wi-Fi access, TV screens and updated decor to compete with restaurants. This suggests that restaurant operators will need to further define what makes their establishments unique (better food, better prices, etc.) and carve out their own niche. And more so than at restaurants, where food made from scratch is expected, c-stores may be able to boost foodservice sales by offering highly recognizable, name-brand prepared foods that consumers are already familiar with and perceive to be high in quality.
Another Technomic report, the 2010 Restaurants & Retail Report: Segmenting the Food & Beverage Consumer, said that consumers are sourcing their food across an increasingly broad range of retail and foodservice outlets. The report provides a snapshot of Americans' restaurant and food shopping patterns.
Retailers continue to move into the restaurant sphere even as restaurant companies extend their brands with retail product offerings. Many retailers are using the restaurant sector as a blueprint for innovation as they seek to keep value-conscious consumers coming through the doors.
"Restaurants consistently provide consumers with foods that respond to their changing preferences and ideas of value. Locally sourced ingredients, organic and additive-free foods and humanely sourced menu offerings have been growth areas," said Darren Tristano, executive vice president at Technomic. "In a down economy, retailers gained a larger share of the foodservice market, but in order to keep that as the economic picture improves, they need to respond to consumers as effectively as restaurants have."
Findings include: - 18- to 34-year-olds are most likely, by a wide margin, to be heavy users of premium fast food. This could have significant implications for future competition between retailers and limited-service restaurants, particularly in the fast-casual segment.
- Heavy users of warehouse clubs, specialty/natural food stores and upscale supermarkets tend to source food from many types of retailers and restaurants.
- Men are more likely than women to be heavy food shoppers at convenience stores and warehouse clubs.
The 2010 Restaurants & Retail Report uses an exclusive Technomic survey of 2,000 U.S. consumers who were asked to report their usage and attitudes regarding restaurants and food retailers. The report also uncovers and analyzes current trends identified by Technomic's Retailer Meal Solutions (RMS) Monitor service and Digital Resource Library.
(Source: Convenience Store/Petroleum News, 10/14/10)
Shoppers to Spend on More Discretionary Items, Non-Gift Purchases
Though Americans are still operating with the recession in the back of their minds and many have fundamentally changed their shopping habits, some findings from NRF's first holiday survey imply consumers won't only be focusing on low prices and basic necessities this year. According to NRF's 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of $688.87 on holiday-related shopping, a slight rise from last year's $681.83.
As in years past, most holiday gift-givers will spend the largest portion of their budget buying gifts for family ($393.55) and friends ($71.45), though they'll still carve out room in their budget for small tokens of appreciation for both co-workers ($18.26) and others ($34.82). Total spending on gifts ($518.08) is expected to rise 2.1 percent from last year, which is in line with NRF's 2010 holiday forecast. Americans will also spend an average of $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.
"Consumers will still shop with the economy in the back of their minds, but we're starting to see shoppers take baby steps toward a new normal," said NRF President and CEO Matthew Shay. "As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them."
According to the survey, 61.7 percent of shoppers say the economy will impact their spending, down from last year's 65.3 percent. Many shoppers say they will compensate by spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%) or using more coupons (40.6%). Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season.
When asked which one factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4 percent last year to 5.3 percent this year, while shoppers who touted quality as the overriding factor rose from 11.8 percent to 12.7 percent.
"Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition."
While many traditional categories like clothing (48.2%) and books (47.3%) will appear on a majority of wish lists this year, one item will appear more often than a year ago: jewelry. As a potential sign that discretionary gifts may become more popular, 23.0 percent of people will ask for jewelry this year, a significant 10 percent jump from last year’s 20.8 percent. Gift cards will remain the most requested holiday gift this year with 57.0 percent of people asking for plastic.
As another sign that shoppers feel a bit of breathing room in their budget, the number of people who say they will make a holiday purchase from a discounter dropped from 70.1 percent last year to 65.1 percent this year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).
Americans aren't only shifting where they're shopping – how they're shopping is changing, too. Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores. According to the survey, over one-fourth of American adults with a smartphone (26.8%) will use these devices to research or make holiday purchases, and that number jumps to 45.0 percent among young adults 18-24. Retailers are expected to take advantage of this trend by offering more robust mobile apps and websites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones.
Yet another hopeful indicator: the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves will rise 8 percent this year (52.9% in '09 to 57.1% this year), with the average holiday shopper spending $107.50 on themselves, up from $101.37 last year.
Though the holiday season won't kick off for many retailers until at least November 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2 percent of Americans will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults 18-24 are among the least likely (27.7%).
NRF continues to expect holiday sales to rise 2.3 percent to $447.1 billion.
(Source: National Retail Federation, 10/19/10)
Study: Insurance Marketers Missing Opportunities
A study from the Chief Marketing Officer Council shows that insurance marketers are too focused on new acquisitions and are missing ways to grow business with existing customers.
For the most part, consumers are happy with their insurance experience, but 12% those surveyed say they resent not hearing from companies until it is time to pay the bill. The biggest communications oversight seems to be silence on the part of the insurance companies.
According to the findings of "What's Critical in the Insurance Vertical," more than 55% of consumers polled have held their existing insurance policies for more than five years and are open to receiving information from their trusted providers on new or complimentary services. And 21% of consumers purchased or increased the value of their existing policies after receiving communications, according to the study from the Palo Alto, Calif., group. However, only 7% of marketers in the insurance vertical value up-sell and cross-sell tactics as critical to route to revenue.
The report, sponsored by InfoPrint Solutions Co., reveals that insurance marketers could increase their business by executing data-driven, targeted retention marketing strategies. Yet many feel they must focus on acquisition strategies or servicing the needs of top-performing or strategic accounts.
Insurance marketers need to break the cycle of "data paralysis," according to Sandra Zoratti, vice president of global solutions marketing at InfoPrint Solutions Company and the author of the report.
"To me, there are two key findings which point to the fact that insurers are clearly not leveraging or maximizing value in their current customer base through data-driven cross-sell and up-sell opportunities which help drive incremental revenue, improved loyalty and increased customer lifetime value," Zoratti tells Marketing Daily. "Simultaneously, insurers continue to focus most of their marketing spend on new customer acquisition which is a more costly avenue to pursue, especially when their current customers are making it clear that they would buy more from their current insurer if asked."
For the report, more than 100 insurance marketers provided insights on how they market and sell insurance, while over 1,100 consumers provided feedback on their experiences shopping for insurance and selecting providers. The insurance industry's net premiums total more than $1 trillion annually. There are more than 2,700 property/ casualty insurers and more than 1,100 life/health insurers in the U.S., according to the Insurance Information Institute.
(Source: Marketing Daily, 09/27/10)
Consumers Celebrating Practicality This Holiday Season
Consumers Maintaining Family Traditions and Entering Holiday Shopping Season Equipped with Lists and Frugal Strategies
This year, 49 percent of consumers are heading into the holiday shopping season concerned about the economy. This and related sentiments are affecting how, where and when shoppers make their gift, and holiday-celebration related food and beverage purchases.
New research, titled "SymphonyIRI Group Special Report: Holiday Shopping 2010," finds that 59 percent of consumers plan to spend less than $500 on holiday gifts this year, and 28 percent plan to purchase fewer gifts. The report goes on to explain that 25 percent of consumers will trim back spending on holiday celebration-related food and beverages. These findings point to a new holiday season that will continue to see practical and frugal shopper habits.
Despite this year's tight budgets, consumers still plan to maintain traditions by continuing their holiday celebrations and purchasing gifts for their friends and loved ones. For example, 60 percent of consumers indicate that they will purchase "very nice" gifts for their loved ones but do what they can to keep costs down, and two-thirds of consumers will work to pull off a fancy holiday celebration, but again, do what they can to keep costs down. Among all of these shoppers, however, spending will be conservative. In related findings:- 2010 will see an increase in the number of consumers who plan to budget no more than $199 this year on gift shopping -- 23 percent, up 8 points from 2009 (15 percent) and 12 points from 2008 (11 percent).
- Twenty percent of consumers are going out less frequently and entertaining at home more often this holiday season versus "typical" years
"The bright spot here is that consumers do not plan to completely halt their spending despite a lack of confidence in the economy and concerns about their immediate financial futures," said Susan Viamari, editor, Times & Trends, SymphonyIRI. "Shoppers across all income brackets plan to shop at a variety of channels and will execute a combination of money saving tactics to complete their holiday gift and celebration purchases."
Tight Budgets Equal Strategic Shopping
Consumers are shopping in a deliberate, preplanned fashion in an effort to reduce expenditures on gifts and holiday celebration-related food and beverages. As with 2009, this year, consumers plan to enter stores with shopping lists in hand. Strong majorities of consumers will plan ahead and create gift and grocery lists with the same or increased frequency than they did last year.
In order to get the best deals on gifts and groceries, a large majority of consumers will also seek out deals prior to entering stores while also keeping an eye out for in-store promotions:- When it comes to purchasing gifts, nearly three-quarters of consumers plan to compare products on the Internet as much or more than they did last year, while nearly half plan to take better advantage of in-store promotions and newspaper/circular coupons.
- Similarly, for holiday celebration-related food and beverages, three-quarters of shoppers will leverage Internet and e-mail coupons with the same or increased frequency, and just under half of shoppers plan to take better advantage of in-store promotions and newspaper/circular coupons.
- About one-third of survey respondents plan to stick to their shopping lists and avoid purchasing unplanned items during their gift and grocery shopping trips.
Consumers Spread the Love across Channels When Shopping for Food and Gifts
Mass merchandisers and supercenters, such as Walmart and Super Kmart, and online stores will be frequented most by shoppers making holiday gift purchases:- Mass merchandisers and supercenters continue to attract shoppers from across income groups; mass merchandisers will be a bit more heavily shopped by lower-income households, while upper-income households will skew slightly toward supercenters.
- Online shopping will also be heavily leveraged across income segments this year, but skew slightly to wealthier shoppers ($55,000-$99,000 income range and $100,000 or more). Key drivers of Internet shopping are convenience, product information, selection and price.
Consumers are indicating a strong willingness to search for the best price for their holiday celebration-related food and beverage needs this year.- Eighty-eight percent of shoppers will shop in mass merchandise and/or supercenter outlets this year, with each of these channels cited heavily by shoppers across income segments.
- Seventy percent of consumers will shop at grocery stores.
- One-third of shoppers, who fall mostly in higher-income brackets, plan to shop at club stores, including 38 percent of those in households earning $55,000-$99,000 and 47 percent of those from households earning $100,000 or more.
- Eighteen percent of consumers plan to shop dollar stores, with those in the lower-income brackets citing a slightly higher propensity to visit this channel (27 percent of those in households earning under $35,000).
With affordability top of mind, store brands will be assured a place at the holiday dinner table, as 80 percent of shoppers will purchase store brand solutions with the same or increased frequency this year versus last year. Shoppers are drawn to these products because they are less expensive (cited by 82 percent of respondents), the quality is about the same as nationally branded products (cited by 43 percent), and because promotions make store brand products more attractive (32 percent).
Holiday Shopping Season Kicks Off Earlier
In an effort to alleviate budgetary strain, this year's holiday shoppers are equipped with coping strategies adopted over the past couple of years. Nearly half of all shoppers surveyed plan to begin their holiday shopping before November, citing the desire to take better advantage of sales (46 percent), to ensure products are available (39 percent) and to spread spending out over time rather than making fewer larger purchases (39 percent).
Cash, Gift Cards and Functional Items Top Gift and Wish Lists
Not only are consumers planning to be mindful about how much, where and when to spend their holiday shopping dollars, they are also indicating that they will strive to be practical when it comes to selecting gifts -- perhaps a sign of the times where necessity trumps luxury.
This year, "what gift seekers want" and "what gift givers plan to give" are in sync, as gift givers and recipients have practicality top of mind. Cash and gift cards top both lists this year with functional items coming in a close second:- Fifty percent of those surveyed would like to receive a gift card as a present and 66 percent plan to give gift cards this holiday season. Twenty-three percent of respondents plan to increase the amount of cash or gift cards they plan to give this holiday compared to 2009.
- Sixteen percent of respondents would like to receive clothing, and 8 percent would like to receive books as a present. Luckily for these gift seekers, 49 percent of shoppers plan to purchase functional items, such as clothes, books and items for the home. In fact, 24 percent of respondents intend to purchase more functional items this year versus what they purchased in 2009, according to those surveyed.
Cash Is King When Paying for Goods
Twenty-five percent of consumers intend to use their credit cards less this holiday season, instead opting to increase use of cash (20 percent of respondents) and debit cards (18 percent), as more consumers look to minimize debt. Across all income groups, cash is the preferred method of payment. Across all households earning less than $100,000, one-quarter of respondents indicate that they will use credit cards less when paying for their holiday goods.
"The economy continues to transform, and with that, consumers are evolving," said John McIndoe, senior vice president, Marketing, SymphonyIRI. "As a result, today's retail environment is even more complex than we have seen historically. Through comprehensive and ongoing surveys, such as this newly released Holiday Shopping 2010 survey, SymphonyIRI is providing insightful information that reveals opportunities for CPG manufacturers and retailers to serve and satisfy consumers and secure ongoing shopper loyalty."
(Source: SymphonyIRI Group, 10/04/10)
