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During the years when my children were in elementary school, we embraced the joy of travel. Whether it was visiting relatives across the states, holidaying at new locales, or exploring the five stunning national parks in our home state, we were perpetually on the move. Regrettably, my youngest was plagued by severe motion sickness on planes, which led us to opt for road trips instead. This choice, seemingly counter-intuitive, allowed us to manage her discomfort better by providing the flexibility to halt for fresh air, restroom breaks, and quick meals at roadside convenience stores (c-stores) whenever required.
One primary criterion that guided our choice of pitstops was the cleanliness and safety of the c-stores. As the only male in a family of females, the comfort and security of my wife and daughters were paramount, even surpassing my own concerns about gas prices or location convenience. A grimy, unhygienic c-store was invariably met with a firm, "Nope!" from my family, compelling us to seek cleaner alternatives. Interestingly, the external cleanliness and safety of a place often held more weight than the state of the restrooms. This reinforced the timeless adage, "You only get one chance to make a first impression," especially when it came to my family's choice of rest stops.
As quick-service restaurants (QSRs) continue to flourish, more c-stores are capitalizing on this trend, aiming to attract and retain customers by enhancing their food offerings. However, this shift necessitates a renewed focus on customer experience and, particularly, cleanliness. It's a well-known fact that customers avoid patronizing dirty restaurants, a sentiment echoed by a phone survey conducted by Harris Interactive. Surveying over 1,000 U.S. adults aged 18 and older, the results revealed that dirty dishes, unpleasant odors, and unclean restrooms ranked higher than poor service as reasons for not returning to a restaurant. The survey also found that 86 percent of U.S. adults judge the cleanliness of a restaurant's kitchen by its restrooms. Consequently, even restaurants with immaculate kitchens may suffer from negative customer perception if their maintenance program is lacking. The quality of food and customer service may be impeccable, but a dirty restaurant environment inevitably deters patrons from returning.
So, what does this mean for you as a c-store owner? According to the 2022 NACS State of the Industry survey, the convenience store industry sees foodservice as an essential part of its present and future operations. Foodservice accounts for over a quarter of sales dollars and one-third of profit dollars inside the store, demonstrating its economic significance.
Foodservice, including categories like prepared food, commissary, and hot, cold, and frozen dispensed beverages, was responsible for revenue of $677,897 per store, or 25.6% of total in-store sales. All categories witnessed a year-over-year increase in sales. For example, for La Crosse, Wisconsin-based Kwik Trip, 2022 marked the “best year ever,” with substantial growth in their fresh fried chicken and bakery programs.
As you expand your food offerings, it's crucial to consider whether you're making a positive first impression right from the forecourt. If not, you risk losing potential customers even before they step inside. A grimy exterior could inadvertently signal that your food may not be safe to consume, prompting customers to drive away. In essence, you might be driving customers away by creating an unwarranted impression of unsafe food conditions at your c-store or QSR.
The consequence of an unhygienic environment is twofold: it discourages appetite and hurts business. Continuously attracting new customers is a challenging task; hence, building a loyal client base is invaluable. Investing in cleanliness and hygiene isn't just about maintaining appearances—it's about building trust, ensuring customer satisfaction, and ultimately, securing business growth.
For c-store owners, building customer trust begins with a clean and inviting exterior. A well-maintained forecourt can set the tone for a positive customer experience even before they step inside. After all, first impressions are often lasting, and a grubby exterior can inadvertently signal a lack of care in other areas, such as food safety.
C-stores that incorporate QSRs must pay extra attention to their cleanliness standards in all areas. For instance, the cleanliness of your restrooms can significantly impact customer perception. An unsanitary restroom can create a negative impression about the hygiene of your kitchen and food, regardless of reality. Consistent maintenance and cleanliness checks should be a standard part of your operational routine to mitigate such perceptions.
Despite the fierce competition convenience stores face both at the pump and inside the store, foodservice done right can provide high margins and generate excitement through new unique offerings tailored to your market. However, this does not mean the path to successful foodservice integration is without challenges.
Just as convenience retailers began to recover from the COVID-19 restrictions, they faced substantial hurdles in 2022, including a highly volatile supply chain, record high inflation rates, and a challenging labor market. Despite these issues, convenience retailers saw a 14.3% year-over-year increase in total foodservice sales, based on preliminary data from the 2022 NACS survey.
Further complicating matters were rising inflation rates, forcing retailers to either absorb losses or raise prices to maintain their margins. This posed a significant issue, as foodservice sales typically offer higher gross margins than most other merchandise categories.
Retailers operating a foodservice program had to grapple with rising food costs and make tough decisions on pricing. Gross profit dollars for foodservice did not increase at the same pace as sales, rising only 8.8% to $354,550 per store in 2022 and accounting for 36.1% of in-store gross profits. Foodservice gross profit margins dropped 2.7 points to 51.73% in 2022.
These challenges were further exacerbated by product spoilage, which increased by 33.2% due to fluctuating demand post-pandemic. Some retailers, like Kwik Trip, mitigated waste by donating to food banks, while others, like Rutter’s, rationalized their menus to reduce food spoilage. (for more information on this subject please see NACS Magazine May 2023 issue article First Look: Foodservice Shows Solid Sales Growth In A Turbulent Year).
Despite facing obstacles, a majority of convenience stores remain positive about the future of foodservice. Over half of the retailers continually innovate and adapt their foodservice offerings in response to evolving consumer trends. Limited time offers (LTOs) have emerged as a popular strategy to engage customers and gauge their preferences. As we look towards 2023, retailers are committed to further innovation and meeting customer demands. They have already begun finding ways to boost in-store sales. As per the latest NACS Consumer Fuels Survey, a record 59% of customers refueling also made in-store purchases. Attracting fuel-only customers into the store by offering fuel discounts on in-store purchases, especially via dedicated mobile apps, has proven successful.
However, maintaining clean and appealing customer-facing areas presents its own set of challenges. It might seem straightforward, but real-life hurdles often complicate the upkeep of your forecourt. The 2022 NACS survey identified three significant obstacles impacting cleaning programs: high staff turnover, supply constraints, and inflation. Even with wages increasing by 68.4% over the past decade, the turnover rate for full- and part-time associates remained alarmingly high at 141.2%.
This is where a comprehensive cleaning plan becomes essential. With its vast experience, CAF Outdoor Cleaning can assist in devising a practical cleaning plan for your store. Establishing regular cleaning schedules and educating staff about the importance of cleanliness can be challenging, and assistance is often needed. We aren't naturally equipped to tackle these issues—it often takes the expertise of a seasoned partner to overcome them. CAF offers complimentary training programs designed to combat the Forgetting Curve and address labor shortages. We provide regular, measurable, and consistent training, establishing uniform high cleaning standards throughout.
Remember, cleanliness is not just about meeting health code regulations. It's about creating an environment that makes your customers feel comfortable and safe. That starts at the forecourt. A clean forecourt can increase customer satisfaction, encourage repeat visits, and help build a loyal customer base.
Moreover, cleanliness can also reflect on your brand image. A well-maintained, clean store can boost your reputation, making your store the go-to spot for travelers and locals alike. On the contrary, a dirty store can damage your reputation, potentially leading to lost customers and decreased profits.
Cleanliness should be a top priority for every c-store owner, especially those venturing into the QSR space. Whether it's the exterior of your store, the restrooms, or the food service area, maintaining high standards of cleanliness is crucial. Not only does it contribute to a positive customer experience, but it also plays a significant role in driving customer loyalty and business growth. So, don't underestimate the power of a clean store—it can be the difference between a one-time visit and a lifetime of repeat customers.
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