Your friendly neighbourhood corner store has a PR problem. Its name is the Kwik-E-Mart.
The massive popularity of The Simpsons cartoon means millions know of the questionable hot dogs, psychedelic slushies, and in one memorable episode, rancid ham, sold by the fictional Springfield institution over the show’s 23 seasons. But those products are a very real symbol of how many consumers view the experience of shopping at a convenience store.
The cartoon isn’t the only reason convenience store food gets a bad rap, of course. But it’s feeding into a growing marketing problem for the industry. In a widespread campaign to change their image, convenience stores are more than ever looking to fresh food – from individual fruits and vegetables to freshly prepared meals – to fuel profits. If customers had reservations in the past about the sweaty hot dogs on those metal rollers, it will be tougher to convince them to reach for the sushi in the future.
But that’s exactly what the industry increasingly believes needs to happen. Canadian giant Alimentation Couche-Tard Inc., based out of Laval, Que., announced in 2010 that it wants fresh food eventually to account for a quarter of the company’s in-store gross profits. In its most recent earnings report, the company that operates Couche-Tard, Mac’s and Circle K convenience stores in Canada and the U.S. showed double-digit growth in sales in that category. Last year, it hired Joe Chiovera from competitor 7-Eleven to a new executive role dedicated to fresh foods. 7-Eleven Inc. has also made fresh food a major priority of its business strategy. In its 477 stores across Canada, fresh food sales have seen double-digit price increases compared to this time last year.
The industry shift is a response to changing consumer habits. As people’s schedules become more hectic and give them less time to find a nourishing meal, convenience stores are selling more fresh food. But the industry still faces a major roadblock. Many customers think of food at convenience stores as anything but fresh.
“There is still a perception that we’re up against,” said Laurie Smith, marketing and communications manager for 7-Eleven in Canada. “It’s a challenge.”
Their marketing response: optics. Stores are changing their displays so they look more like they’re in the fresh food business. There have been some hiccups along the way: When U.S. chain Wawa began carrying bananas in its stores, it would discount the prices as the fruit turned brown, which hurt their attempts to sell fresh food more than it helped, said Richard George, chair of the department of food marketing at Saint Joseph’s University in Philadelphia. Now, the stores have begun rotating stock more often, and with the chain’s expansion into Florida, it has announced it will begin baking bread in-store.
The look and feel of a store is crucial to the overall marketing strategy, because convenience stores rely much more on in-store marketing, and less on outside advertising, than traditional retailers do.
“People are in there anyway buying this or that. Now you have to convert them. It’s not about getting them in the store, it’s about convincing them that, ‘Hey, this may be my place for dinner,’” Prof. George said.
7-Eleven has embraced that strategy. It has begun carrying foods such as cut fruit, vegetable trays, sandwiches and even sushi in open-air, refrigerated deli cases. Often it features prominent displays around the cases with appealing photos of fresh sandwiches.
“Fresh-food cues and visuals are really key to presenting that environment and awareness to our existing guests,” Ms. Smith said.
Open-air cases are also a surprisingly important marketing feature: the average shopping time in a North American convenience store is three minutes, said Jeff Lenard, spokesperson for international industry group NACS (formerly the National Association of Convenience Stores) – that means even having to open a door to get to fresh food is inconvenient.
“It’s not enough to put it there. You have to showcase it,” he said.
In-store sampling has also become an incredibly important marketing strategy for convenience stores. 7-Eleven does this regularly as it tries to change customers’ preconceived notions about its food.
Some are having more success at facing this challenge than others. In a recent research note, analyst Martin Landry of GMP Securities noted that Couche-Tard’s Circle K stores lagged the overall industry last year in fresh food sales. But he identified fresh food as a promising area for future growth.
“There’s a perception that food quality is questionable at convenience stores in general,” Mr. Landry said. “What convenience stores have to do is create a habit with their consumers.”
Couche-Tard has been especially active in its Canadian stores. In Quebec last year, it introduced new salads, snack packs with fruits or vegetables, hot breakfast sandwiches and oatmeal.
The Canadian industry is also turning to government partnerships to burnish its image. Last August, the Western division of the Canadian Convenience Stores Association, which includes Couche-Tard (which owns Mac’s convenience stores across Canada as well), and 7-Eleven, as well as independents, announced its support for the Healthy Families BC program, run by the B.C. provincial government. It created the Healthy Convenience Store Initiative, committing to post nutrition information for non-packaged foods such as fresh sandwiches and pizza.
And the Canada-wide association sat down with Health Canada in February to discuss its long-term project to create a framework for nutritional labelling for food products. Until now, it has focused largely on restaurants, but the group is eager to bring convenience stores into the discussion, said Alex Scholten, the president of the CCSA.
The industry has been demonized in the past for perpetuating convenient, but unhealthy, food choices. With the obesity epidemic now a high-profile issue in the U.S. and Canada, stores are in a marketing fight to become a destination for customers who want healthy food on a packed schedule.
But the experience of convenience stores will be an example for any industry undertaking a major marketing push to change long-held customer perceptions; it will take more than a single campaign.
“It’ll be a 10-year overnight success,” Mr. Lenard said. “…It’ll take some time.”Report Typo/Error