This article is brought to you by Core-Mark, a NACS Hunter Club Gold member.
The coronavirus pandemic upended foot traffic, shifting the traditional busy breakfast and morning commuter period to later in the day and lunch to well beyond noon. “Because of this change in foot traffic patterns, we saw an opportunity to capture interest and food dollars in a nontraditional daypart for convenience stores—the afternoon snack and evening meal,” said Jac Moskalik, director of fresh and foodservice for Core-Mark, based in Westlake, Texas. “During COVID-19, retailers attracted new consumers, and they want to keep those customers coming into their stores, so they need to expand their offerings with more immediate consumption and future consumption products.”
The convenience store industry is especially well-positioned to win more snacking opportunities in the afternoon and evening hours. For example, the coronavirus pandemic accelerated snacking and snack food consumption, which had been rising prior to 2020, according to the NPD Group. “America is a nation of snackers, and we’re no longer as averse to snacking as we once were. Instead, snacking is viewed as a way to have a quick bite in between meals or as a convenient meal side,” said Darren Seifer, NPD food and beverage industry analyst. “Snacking is woven into the fabric of our daily lives, and this way of thinking provides endless opportunities for food and snack marketers.”
The evening daypart also offers an area with potential for growth at convenience stores. Today’s consumer wants evening meal options for immediate consumption and to cook at home with their families. “This has been a traditionally underserved meal for the industry,” Moskalik said. “We see the increased interest in frozen foods and fresh-prepared, family-sized meals as feeding this trend.”
Both afternoon snacking and dinner represent two additional ways convenience stores can capture more of the consumer food dollar, and pivoting to meet that need can be relatively simple.
Switching your mindset from morning and lunch to afternoon and dinner doesn’t mean upending current operations. “Of course, it’s challenging to try to attract a different consumer from the daily commuter picking up a pastry or breakfast sandwich on his way to work,” she said. “But there are simple approaches to make gradual inroads into these dayparts.”
Evaluate current selections to see if you can reposition snack items for afternoon or evening consumption. For example, some baked goods, such as whole grain muffins or soft pretzels, could be easily promoted as more substantial afternoon snack options. One independent retailer close to an elementary school stocks up on ice cream novelties during the school year because of the rush from kids stopping by after school for a snack on their way home or to sports practice.
Moskalik also recommended retailers consider how close each location is to a grocery or dollar store. “Check out the competition to see what offerings the closest store has for dinner. Who is their consumer—do they overlap with yours? How much space have they dedicated to freezer, foodservice and grab-and-go?” she said. “Answering those questions first can guide you in deciding how to reach this consumer.”
Frozen foods heated up during the pandemic, a trend that shows no sign of cooling off. According to the “2021 Power of Frozen” report by the American Frozen Food Institute and FMI—the Food Industry Association, the frozen food category rang in $65.1 billion in retail sales last year—a 21% increase in dollars and a 13.3% increase in units over the previous year. Nearly all types of frozen foods experienced double-digit gains, led by seafood, poultry and appetizers. At convenience stores, the frozen food category grew from 33.33% of the gross margin in 2019 to 52.61% in 2020, according to the NACS State of the Industry data. The average gross margin dollars jumped 226.1% in 2020 over the previous year, rising to $4,362.
For retailers who want to ease into this daypart, expanding their frozen food section can be an economical way to start. “Frozen grocery is a great way to introduce customers to your future consumption offerings, like frozen pizzas and frozen entrees,” Moskalik said. “More brands with better-for-you, plant-based, organic and clean food frozen options have come into the convenience channel since COVID, making it easier to provide a variety of products to keep customers coming back.”
Moskalik pointed out that adding a frozen section has never been easier. “There are all-inclusive freezers that are essentially plug and sell at a low price point, making freezers less of an upfront investment. Plus, with frozen foods, there’s less spoilage, too,” she said. “Many retailers are adding either freezers for the first time or expanding the number of freezer doors.”
One national convenience store chain quickly moved to add freezers to as many locations as possible during the pandemic. “We originally had freezers in very few stores, but we realized early on during COVID-19 that we needed to get freezers in our stores fast,” the company spokesperson said. “For stores with freezers, we couldn’t keep frozen pizzas in stock, and soon expanded to include frozen dinners, French fries, burgers and six to eight brands of pizza.”
While many convenience stores have boosted their breakfast and lunch fresh foodservice menus, dinner remains an afterthought. “For fresh foodservice, convenience stores would do well to remember our competition is other quick-service restaurants,” Moskalik said. “Since many of them also focus on the morning and midday meals, convenience stores have an open window to grab the dinner consumer.”
So far, few convenience stores have dipped their toes into a dinner menu. For example, one major East Coast chain launched its evening menu earlier this year with burgers as its dinner platform centerpiece. Some independent retailers are experimenting with fresh-prepared grab-and-go dinners as well.
But overall, the evening meal has untapped potential for convenience retailers. “For assistance in developing a dinner menu, reach out to your supplier and distributor partners and tell them what you want to accomplish,” she said. “Many suppliers are also trying to crossover into the convenience segment and will often have great ideas to help retailers reach the evening meal consumer.”
Once you have your afternoon snack and dinner offerings in place, it’s time to let customers know what you have. The key to growing foodservice business during the afternoon and evening daypart is to have a consistent marketing program. “You have to tell the consumer who’s getting fuel that you have dinner options inside,” said Moskalik. “Your customers have to know they can get those snack and evening meal products every day.”
She recommended using a variety of channels to connect with consumers on your afternoon and evening products. “Use your app and digital marketing to tell the story you can provide dinner, either through your frozen section, your prepared meals in the grab-and-go or your fresh foodservice,” she said.
Tied to your marketing should be targeted promotions, such as bundling frozen pizzas with two liters of soda or two-for-four hot dogs. “Multiples do better for the evening meal because people are generally buying for their family, so think about larger bundles to grow the basket ring and deliver what customers need,” Moskalik said.
Highlight your deals in several areas of the store. “Make sure you have signage in place that tells the customer that you can be a place for dinner options,” she said. “It’s a matter of understanding your afternoon customer is seeking different things from your morning customer and trying to cater to that different need.”
As Americans get back to in-person schooling and at-the-office work, the afternoon and evening dayparts will grow in importance. Convenience retailers who have afternoon snack offerings and evening meal plans will have an advantage, one that can turn occasional shoppers into loyal customers.
“By focusing on frozen and fresh-prepared meal components, convenience retailers can easily position themselves as the afternoon snack and evening meal solutions consumers crave,” Moskalik said."