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October 2007

News & Media

Convenience Stores Find Foodservice to Offset Fuel Margins 
October 2, 2007 

FLORIDA -- Gasoline is still the main moneymaker for Florida’s convenience stores, providing 71 percent of their total revenue. But once customers leave the pumps and enter the stores, they spend almost as much on fresh-made food as they do on soft drinks or beer, the Daytona Beach News-Journal reports.

“How many convenience stores are doing foodservice these days? As many as possibly can,” said Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association.

Smith said that foodservice is helping convenience stores offset shrinking profit margins on both gasoline sales and some of their packaged grocery items.

“Convenience stores are getting more price competitive,” Smith said. “The days of the $4.69 jar of mayonnaise at the convenience store are over.”

Fresh food also prolongs visits by customers who otherwise might gas up with a credit card and then drive off without entering the store, he added.

Foodservice works especially well in stores that have room for grills, ovens, refrigerators and prep tables and are situated close to major employers, Smith said. “It helps if you have a lot of foot traffic from workers coming in for breakfast or lunch,” he said.

Getting reliable short-order cooks is the biggest challenge for retailers who want to branch into foodservice, said Bernie Simpkins, who once was the fried chicken king of Florida's Atlantic Coast highways. Back in the 1970s and ‘80s, his S&S Enterprises chain sold its “Fancy Fried” brand of fresh-cooked chicken at more than 100 stations from West Palm Beach to Jacksonville.

“It was a very nice, high-margin business for us,” said Simpkins. “But it was a very labor intensive process, and you had to have the right people supervising it. Most of the help made just a little over the minimum wage, so there was a lot of turnover.”

Most stations, according to Smith, solve the labor problem by farming out their foodservice business to a separate concessionaire -- either a chain like Subway or Blimpie’s, or a local independent.