Delivering Value

Customers are increasingly cost-conscious, but value is more than a price point.

Delivering Value

October 2024   minute read

By: Pat Pape

Consumers are weary of inflation, and foodservice operators are competing to drive traffic with discounted meal deals. This is most evident in the realm of QSRs. This summer, McDonald’s reported that net income for the June quarter was down 12% from the previous year. With the average price of a Big Mac at $5.29, up 21% from 2019, and a McNuggets meal at $9.19, up 28% over the same period, the burger giant rolled out an LTO of four bundled items for $5. Other QSRs are taking similar steps.

Warren Buffet once said, “Price is what you pay; value is what you get.” Katie Thomas, lead at the Kearney Consumer Institute, a global think tank, agrees. “Value is a fair price. Not a low price,” said Thomas. “‘Value’ has taken on the meaning of ‘cheap.’ But value should be the right price, not the cheapest price.”

Price vs. Value

While the merit of deep discounting is debatable, most QSR, fast casual or c-store operators offer some type of meal deal. Kwik Trip, based in Wisconsin, features daily specials on its branded Hot Spot menu.

“Our guests know the daily specials and seek us out for them,” said Paul Servais, vice president of foodservice for Kwik Trip. “Monday is burritos, Tuesday is rib sandwiches and grilled cheese and Wednesday rotates between cheeseburgers, chicken sandwiches, rib sandwiches and pizza slices. Thursday is quarter-pound burgers and spicy chicken sandwiches; Friday is fish sandwiches, and weekends are hot dogs and brats. There’s always a snack item and a bakery treat on sale.”

But Kwik Trip has more to offer than a generous selection of well-priced foods.

Robert Byrne, senior director of consumer research at Technomic, lives in Chicago but frequently travels to Wisconsin where his son attends college. He called Kwik Trip a “powerful foodservice brand.”

“When I go to Kwik Trip, I shop the hot food options and also get the drink I want—the bottle or fountain—or bottled water for the road, and I can get one of their dippers or glazers,” he said “I’m not limited by the options at a QSR. At the c-store, my options are high value and its one-stop shopping.”

Beyond Low Prices

In today’s busy world, people are experiencing what psychologist Dr. Mark Travers describes as “time poverty.” Time-poor individuals feel rushed or pressured, often at the expense of activities they would like to be able to participate in.

“We’ve noticed in our data sets from pre-pandemic to today that there is a significant increase in consumers who feel time-starved,” said Technomic’s Byrne. “We see increases in consumers saying, ‘I almost never have time to stop and enjoy a meal’ and ‘I frequently have to eat meals on the run.’ These are needs that c-stores are perfectly positioned to meet.”

But convenience stores provide value beyond the basics.

“Consumers are hitting a tipping point and are calling out brands for shrinkflation.”

At The Market by Tiger stores in central Virginia, “We strive to run sparkling clean stores that are well-stocked and staffed with amazing people that are well-trained and have a passion for excellent customer service,” said Maurice Lamarche, retail director. “We are able to deliver an elevated definition of value. Our entire retail staff is able to visit our stores monthly, and we host Market Rewards gas sales where we staff the pumps, giving deep fuel discounts, free food and fun branded swag.”

At Ozarks TravelCenter in Missouri, “We take pride in giving great customer service,” said Bryan Davis, director of foodservice. “And we are proud of our clean restrooms and stores.”

The chain’s daily food specials at a lower-than-menu cost run on three-week rotations. They’re carefully tracked and replaced if sales slow. “I’m always looking for new items that customers will get excited about,” Davis said.

Rewards Are Value

Loyalty programs are another way to give shoppers more value for their buck. According to the EY Consumer Index, 49% of U.S. shoppers say they’re willing to download a brand’s loyalty app just to receive discounts and exclusive deals.

At GetGo Cafe & Market, Giant Eagle’s c-store brand which was recently acquired by Alimentation Couche-Tard, loyalty members receive “great prices, with regular promotions and discounts in partnership with our vendors,” said Brandon Daniels, senior manager of public relations and communications at Giant Eagle.

The chain’s myPerks loyalty platform uses personalized architecture to present individualized offers while interconnecting all Giant Eagle brands, including GetGo, the supermarkets, the pharmacy and WetGo car wash.

“Guests use myPerks to earn rewards on purchases across our brands, which are redeemed in the form of dollars-off or percent-off purchases up to 20% off a full grocery shop, or cent-per-gallon discounts on fuel, up to a free tank of gas,” said Daniels. “The more you shop with the Giant Eagle family, the more you save.”

Pennsylvania-based Rutter’s has enjoyed enthusiastic consumer response to Rutter’s Rewards, a loyalty program that offers discounts on fuel and merchandise. “But we continuously evaluate the effectiveness [of those offers],” said Philip Santini, senior director of advertising and food service for Rutter’s.

There’s nothing better than getting a ‘high five’ from customers.”

“Our commitment to listening and adapting ensures we provide the most relevant and valued experiences,” he said. “That lets us focus on offerings that resonate with our customers while remaining agile in our approach.”

As a bonus, loyalty programs collect information about shopping behaviors that help retailers plan future offers.

“We measure customer perception by tracking the number of guests who redeem deals offered through our myRewards Plus app and monitoring feedback on our social media platforms,” said Ed Houk, director of food and beverage at Tennessee-based Pilot Travel Centers. “Some of our most popular promotions include free food or beverage items to celebrate holidays and events, such as a free cold brew on National Cold Brew Day or free slice of pizza for military appreciation.”

Texas-based 7-Eleven has created the “Brainfreeze Collective,” a proprietary community of 270, 000-plus shoppers that provides customer feedback.

“We work with these customers to conduct all manner of research, both quantitative and qualitative, discussions, focus groups and in-store missions,” said Jasmeet Singh, senior vice president of merchandise, center store and services, at 7-Eleven. The chain also uses C-Shopper, a data insights and analytics platform, to better understand customer purchase and behavior data.

At The Market by Tiger, the focus is on loyalty metrics, including the market penetration rate.

“We thrive on repeat and referral business, and we look at sales. Continued growth across all of our retail and gourmet-to-go offerings means we’re a sustainable, healthy brand,” said Lamarche. “We’re avid readers of Google reviews, and there’s nothing better than getting a ‘high five’ from customers. And our managers have been known to pull up a stool and talk to customers over a cup of coffee.”

Casey’s management utilizes a tracking tool to determine brand strength and understand consumer thinking. “Our tracker shows that Casey’s provides value in the pizza space, more so than other big pizza brands,” said Carrie Stojack, vice president of brand and strategic insights for the Iowa-based chain. “Our delicious, handmade pizza leans into abundance, with fresh ingredients offering quality and value. While families are eating out less, our guests continue to come back to Casey’s for their pizza night order.”

Plus, the Casey’s team monitors social media. “Consumers are hitting a tipping point and are calling out brands for shrinkflation, backing down on quality and pulling a bait-and-switch on pricing,” Stojack added.

“C-stores already have QSRs beat on price.”

Private Label Value

Many shoppers seek value via private-label products. In the midst of inflation, McKinsey & Co. research reports that 36% of consumers plan to purchase private-label products more frequently, and 60% believe private brands offer equal or better quality than name brands.

With more than 820 7-Select branded products, 7-Eleven strives to deliver both quality and value.

“We also look at how we can link CPG products to our proprietary food, beverage and private brands to boost value,” said Singh. “When we create a bundle—like our recent two pizza slices plus a 20-ounce branded soft drink for one low price—we’re well on our way to creating a perception of value.”

Casey’s offers private-label products ranging from ice cream and snacks to packaged beverages.

“They provide quality at or better than national brands, making them the best, more affordable choice,” said Stojack. “Plus, the ease and convenience of shopping at Casey’s positively impact the value equation—time is money.”

Planning Equals Value

Meticulous promotion development and scheduling help retailers successfully execute value offers.

“Our approach to determining future value offerings is collaborative and ensures constant communication within our team, utilizing weekly, biweekly and monthly meetings, plus informal discussions for idea exchanges,” said Emma Vodanovic, marketing manager for Cliff’s Local Market in central New York.

“For foodservice offerings, such as LTOs, we gauge customer perceptions of our values through active community engagement and strategic partnerships with local businesses,” she said. “Customers appreciate our efforts to source and promote local products, enhancing our brand identity as a community-focused company.”

Cliff’s communicates its offers through various channels, including in-store signage, monthly coupons, targeted digital advertisements on social media and email platforms and in a widely circulated local magazine.

At Ozarks TravelCenter, “Teams meet monthly to discuss specials and create new ones,” said Davis. “These items aren’t on the regular menu but are comprised of items we already purchase. They must sell over 30 items a day to stay in the rotation.”

Pilot’s in-store promotions are determined well in advance. “We continually monitor trends and events to identify opportunities,” Houk said. “By being responsive to the news cycle and current trends, we ensure that promotions remain relevant and appealing to guests.”

Most importantly, value means tasting good.

“When we asked consumers, ‘When you think about quality versus prices, what are you looking for?,’ 33% said, ‘I look for the lowest priced product’ and 48% said, ‘I look for a mix of quality and price,’” said Thomas. “Customers don’t want to lose quality in favor of price. They don’t want something that’s cheap but tastes bad. If it’s a little more expensive, that may be okay, and they’ll find somewhere else to save.”

“In the convenience space, I expect to see increased focus on the quality of the offering,” said Byrne. “C-stores already have QSRs beat on price, but if they continue to hammer home the message about quality, the flavor, the taste and what makes their offerings as good—if not better—than what QSRs offer, that’s a winning formula.”

Pat Pape

Pat Pape

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

Share:
Print:
To provide complete functionality, this web site needs your explicit consent to store browser cookies. We recommended that you "allow all cookies" so you may be able to use certain features, such as logging in, saving articles, or personalizing content.