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"The on-demand world we live in requires retailers to focus on convenience, higher quality, health and wellness, and on-the-go strategies," said Eric Dzwonczyk, co-head of AlixPartners' restaurant, hospitality and leisure practice, and a managing director of the firm. Because of the increased focus on driving foodservice, foodservice sales now represent 15 percent of the industrys total in-store revenue. And because of the categorys hefty margin, growth in foodservice profit dollars will likely outpace growth in merchandise profit dollars, the report states. Even though merchandise contributes about 85 percent of in-store sales, the average gross margin on merchandise is only 23.8 percent vs. foodservices 43.7 percent. Fuel Price & Volatility Dzwonczyk pointed to fuel market developments over the past 24 months as one reason for the heightened focus on foodservice. "C-stores are uniquely positioned compared to restaurants," he told Convenience Store News. "They know how to appeal to consumers at different times of the day and can make food as it is ordered." Many convenience stores also have a superior coffee platform to build upon, he added. Fuel prices are expected to start edging back up during 2017, given demand-and-supply dynamics, according to the report.
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