Take a nation of time-pressed consumers, add a pinch of rising economic confidence and you’ve got the perfect ingredients for food-to-go success. And as c-store retailers are finding, doing it well creates a dish offering tasty rewards in terms of increased footfall, high margins and extra impulse sales.
Yet the sector has been relatively slow to explore the opportunities the food-to-go category offers, with statistics showing there is potential for many more retailers to get involved, whatever their budget. The Association of Convenience Stores (ACS) Local Shops Report revealed that just 19% of retailers have hot food to go in their stores, while an even smaller 13% have a dedicated hot food-to-go counter.
HIM senior insights manager Jennifer Pratt believes retailers shouldn’t underestimate the importance of food to go. “Our research shows that 20% of shoppers that we spoke to were in-store on a food or drink to go mission,” she says. “That is up some 5% on last year. This new shopping behaviour is the by-product of the continued blurring and merging of traditional convenience outlets with food service retailers, by way of in-store concessions, as is the case with Costa and Subway, or on-site dining facilities and experience, such as the Spar Hackney store with its Eat 17 restaurant.”
According to Aoife Kenny, head of UK retail at Aryzta Food Solutions, which owns Cuisine de France, the food-to-go category has benefited from consumers’ increasingly busy lifestyles. “The category itself is extremely buoyant as people’s lives become busier and demand for food on the move continues to grow,” she says. “In-store bakery is generally in growth at 2.2% and outperforming bakery which is growing at 1.4% (IRI Total Market).”
Country Choice senior marketing manager Rebecca Whitmore agrees that the category is buoyant. “The eating out market has been growing due to rising consumer confidence,” she says. “People feel better off, even if they are not, and that they have more disposable income.
“This, partnered with the continuing time-poor lifestyle, means that consumers are spending more on food when they are out, and eating out more frequently.”
The focus is on meeting the demands of shoppers looking for quick solutions to quell the hunger pangs throughout the day. Whitmore adds: “People are leaving the house without having had any breakfast and eating it on the go instead, and fewer people are making their own lunch than last year.”
Kenny says that even though customers are busy, they still want quality food that is fresh and are willing to go out of their way to find it. “We’ve found that our convenience retail customers in particular are experiencing growing demand for fresh bakery over packaged solutions,” she says. “Mintel statistics show that 44% of shoppers would visit a convenience store more frequently if the bakery range was improved, while stores with an in-store bakery were rated about 30% higher for their quality of bakery offer by shoppers.”
Dealing with waste
Typically, the main barrier to food to go is the fear of wastage, which can seriously eat into profits. But Kenny believes this doesn’t have to be an issue if a retailer plans properly, and that following some simple disciplines in the category can boost sales rather than create wastage. “Freshness is a key factor when shoppers are buying bread, which is why, with our Cuisine de France support team, we train our retailers to bake off little and often rather than the traditional ‘one bake a day’,” she explains. “It helps towards reducing wastage as the retailer will only bake what is needed, rather than baking a huge amount at the start of the day.
“It also meets the consumer’s need for the availability of fresh products which ultimately delivers a better eat and therefore the retailer is more likely to get regular repeat purchase. Not to mention the lovely aroma created in store!”
Once you’ve tackled wastage, where do the main opportunities lie in food to go? While every store is different, there are some constants across the category. HIM’s Jennifer Pratt believes lunch is integral to food-to-go success.
“In terms of the meal occasions within food- and drink-to-go missions it is the lunch-to-go mission that remains the most popular, with 7% of shoppers using convenience for this occasion,” she says. “Currently, symbols and forecourts are winning on the drink to go and snacking occasion. Where we see the largest opportunity for these channels is within this lunch mission and then breakfast.”
Meal deal opportunities are also an area of potential for retailers, points out Whitmore. “Meal deals geared around the lunch occasion in particular encourage people to buy lunch out because they represent good value for money.”
Kenny agrees that offering a meal deal can grow sales, as can providing products designed to satisfy hunger pangs at specific times of the day. “Meal occasions are a real growth area in the food-to-go category,” she says. “In addition, we know from research HIM conducted that hot food to go will continue to grow, with 12% of shoppers saying they would pay more for a hot meal deal.”
Having a hot meal deal offering opens up the opportunity to grow sales throughout the day, too. Whitmore says: “Day-part planning is very important, particularly when it comes to maximizing sales throughout the day and saving space in store,” she says.
She adds: “We operate a breakfast bap programme which can be easily changed to a burger programme for lunch simply by changing the filling put inside in the bap. This is vital because it means that whatever time the consumer is in store, you are tempting them with something different that is relevant to them and to the time of day. It is very easy to do and it can make a huge difference to sales.”
It’s not just hot items that sell well when it comes to food to go. Having a varied chilled offering can help make the best use of existing fridges and give you the chance to provide food-to-go without a massive investment.
Kerry Foods customer marketing controller Richard Tyler believes that chilled has evolved to become a big player in a food-to-go offering.
“The chilled snacking category is evolving quickly to meet shoppers’ changing tastes and demands,” he says. “We are seeing a whole new generation of snacks meeting an increasingly diverse range of adult consumer needs, covering everything from top-up grazing to full-on meal replacement.”
Tyler advises retailers to take an occasion or meal-based approach to the chiller to maximise sales. “Research indicates that 77% of consumers would find it useful to have commonly purchased products merchandised together,” he says. “By organising your chiller by occasion such as ‘lunchtime’, it will prompt shoppers to make impulse purchases, boosting basket spend.”
Kepak Convenience Foods marketing director John Armstrong believes that a microwave could be the solution for those with little space. “Not every independent has the space or staffing levels for a hot food counter,” he says. “The microwave or ‘hot snack station’ takes up very little space and is pre-programmed to cook Rustlers and Zugo Deli Café micro snacking SKUs. They can also be used to cook any ‘hot, quick and tasty’ products (HQT).”
He says the HQT category is a new avenue within food to go, and with just 5% of retailers reported to have a microwave (ACS Local Shops Report 2014) there’s an opportunity to offer something different.
Drinks to go
Hot drinks make the perfect starting point
While adding a hot beverage machine to an existing food-to-go offering may seem like a logical step, if you’re dipping your toe into the water it may be better to do it the other way around.
With an entry-level hot beverage machine taking up a small amount of space and costing as little as £100, it’s no wonder that it’s the most popular food to go within convenience; a survey in the ACS Local Shop Report shows that 27% of retailers have a coffee machine in their stores.
Some retailers are reporting that they sell up to 90 cups a day, and the recent Visa Europe Working Day Spend report found that the average UK worker spends £2.09 on hot drinks a day.
The sub-category has benefitted from the likes of Costa Express having premium machines in stores, and the big brand presence is helping to raise the profile of hot beverages to go in convenience, showing consumers they can grab a quality cuppa in small stores.
Aoife Kenny, head of UK retail at Aryzta Food Solutions, which owns Cuisine de France, says that once a hot beverage machine is established in your store, then it’s time to make additions. “The Allegra Coffee Shop Report shows that 70% of consumers want something to eat when buying coffee, making an in-store bakery situated nearby a fantastic impulse-driven upsell opportunity,” she says. “We would advise those convenience retailers with a coffee offer to position a Viennoiserie or confectionery offer next to it to encourage purchase.”