Many large convenience chains are considering how to get into, if not expand, their fresh food offerings as tobacco sales slowly decline and gas margins shrink.
This year at NACS show in Atlanta, there was a lot of food equipment and display exhibitors educating retailers on innovations. In a nut shell, there was some impressive displays to attract eyeballs and convert them into purchases. The food service equipment demonstrated appeared to be much simpler to use, in a smaller footprint, featuring with easy cleanup. All three characteristics being sought by convenience store retailers. The biggest hurdle was price tag – some of this innovation was very expensive and would require a long term view – emphasized, long term view to make a commitment to this important category.
Earlier this year, Couche-Tard indicated that fresh food accounted for 18% of their gross margins in 2012. Alain Bouchard, Couche-Tard president and chief executive officer, said that he wants to eventually take that to 25 per cent. Clearly, Couch-Tard has the stomach for this investment. Simple is better, smaller foot-prints are required, and self-cleaning improves safety and quality, while reducing labour costs. The food service equipment industry is responding to the needs of potentially 150,000 stores in the United States and 23,000 in Canada.