How to Prosper in Foodservice

As food contributes more to the bottom line, success-proven tactics are essential.

June 11, 2015

The NACS Insight Convenience Summit – Europe kicked off earlier this week in Berlin, bringing together convenience and fuel retailing industry professionals from around the world to discuss new ideas and gain new commercial connections. Yesterday, the Summit moved to London, for two full days of general sessions and a day of Retail Study Tours, as well as Thursday’s presentation of the International Convenience Retail Awards.

By Fiona Briggs

LONDON – Tactics to prosper in foodservice were put under the spotlight at the NACS Insight Convenience Summit – Europe yesterday. Attendees at the Summit’s opening session in London heard from leading forecourt retailers Applegreen and Euro Garages, as well as the solutions firm XS Foodservice & Marketing Solutions.

Applegreen U.K. Managing Director Michael O’Loughlin highlighted the importance of the food offer to his business, in which 60% of the profits are derived from non-fuel. “Food is the emphasis of our business,” he said. However, O’Loughlin also acknowledged that the marketplace is crowded and offers abound: “Some people don’t even eat at home; it’s a fast food nation.”

O’Loughlin presented Applegreen¹s foodservice offer, comprising The Bakewell served own-brand range, plus an evolving suite of brands including Burger King, Costa, Greggs, Chopstix and Lavazza. He emphasized the importance of having the right offer at the right location and how foodservice had broadened Applegreen’s customer base from mostly male and older customers to younger shoppers and more women.

“Food is our future. It’s something we have to do. If you are not in food, you are not going to be in business, that’s our view,” he said.

Ilyas Munshi, commercial director at Euro Garages, highlighted his company’s foodservice model, operating major global brands such as Starbucks and Subway but delivering them locally. “We decided to operate the brands ourselves and look at the detail of doing that and we have been able to scale that model up,” he explained.

According to Munshi, Euro Garages is trying to create an experience that challenges the stereotypical view of the gas station: “We are aiming for the ‘wow’ factor and have integrated branded food outlets onto our sites, which has created a business that is cash-generative,” he said.

Munshi said the foodservice piece has changed the nature of its sites. People now use the locations for meetings, benefitting from free parking and Wi-Fi, while fuel has even become an “afterthought” for customers. Munshi revealed that 76% of customers buy fuel and food, 20% buy just fuel and 4% buy just non-fuel. This means that Euro Garages is now attracting people who may not even have a vehicle.

Food and drink has grown to a £43m (about U.S. $66.8 million) sales business, he added, with an approximate 30:30:30 split between fuel, shop and foodservice. Crucially, foodservice has brought incremental business on all fronts. Starbucks has generated a 7% increase in fuel sales, Subway an 11% increase in shop sales and Greggs a 1% increase in Subway sales.

Joe Chiovera, principal of XS Foodservice & Marketing Solutions, said the key in foodservice is building from a solid foundation. “Too often operators jump right to sales and start measuring,” he said. “If you take care of the foundation and then the positioning, sales will happen.”

When it comes to positioning, Chiovera advised that retailers focus on understanding what they want the products to do and to decide what they wanted to be great at. He urged Summit attendees to consider how much the consumer has changed and the importance of the fast casual dining segment to Millennials and Generation Z.

Fast casual dining is also an opportunity for c-stores, Chiovera said, but stores must create the right culture, which is focused on customers. “Companies that are winning have created a culture,” he emphasized. “Understanding what the consumer wants is changing everybody’s thinking.”

The presenters also highlighted the importance of training in foodservice delivery. Applegreen managers have Foodservice Passports and must be trained in all aspects of the offer in order to progress in the business, for instance. But training and education can be an Achilles heel, cautioned Chiovera, who emphasized the importance of making tasks simple and easy to execute for staff.

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