C-Store Operators See Foodservice Opportunities in New Light, Says Technomic

CHICAGO--(Business Wire)--
Higher gas prices may be hurting customers at the pump, but
c-store operators are sharing their pain. With gross margins on fuel
hovering around 5 percent, it's no wonder that many c-store operators
are taking a fresh look at their foodservice programs, where margins
are easily over 40 percent and may exceed 60 percent.

As a percent of total c-store sales, foodservice remains small.
But higher gas prices may actually help c-store operators grow their
foodservice sales. "Consumers are much more interested in reducing
their driving," explains Tim Powell, Convenience Store Foodservice
Program Director at Technomic. "A trip to the gas station may be
unavoidable, but now consumers are more likely to also pick up a quick
meal or a snack at a c-store and avoid another stop."

The Technomic study found that when consumers are hungry for a
meal, convenience stores typically fall behind restaurants and grocery
stores as a top-of-mind destination. However, when asked about snacks,
most consumers think of c-stores ahead of all other venues.

The study identified many opportunities for traditional
foodservice suppliers to provide expertise in a channel that has
historically behaved more like retailers than foodservice operators,
including snacks, beverages and meal items. While the major chains
(1,000 units or more) hold most of the industry's foodservice share,
mid-tier chains (10 to 1,000 units) account for 23 percent of all
units and nearly a fifth of all c-store foodservice industry sales.

"These chains are often easier for suppliers to target and
penetrate, particularly since there are fewer management levels and
fewer competitors," says Powell. "Any food or beverage supplier that
can help implement a branded solution, even if it's just for one
product category, is likely to find success."

The Technomic study Target: C-Stores, A Growing Opportunity on the
Foodservice Landscape provides foodservice suppliers with a road map
for penetrating the c-store industry, including market size for
specific c-store foodservice products, consumer attitudes and behavior
towards c-store foodservice, recommended action steps and growth
strategies. To learn more about the study, please contact Tim Powell
at 312-876-0004, ext.3704 or tpowell@technomic.com.

About Technomic

Technomic Inc. provides food and foodservice clients with the
research, insights and strategic consulting support they need to
enhance their business strategies, decisions and results. Technomic
offers clients proprietary management solutions, shared-cost
common-interest research, and an extensive collection of research
publications.

Technomic, Inc.
Chris Urban, 312-506-3929 or curban@technomic.com.

Copyright Business Wire 2008