Why Foodservice Delivery Is the Next Big Thing for C-Stores

July 13, 2017
CSD Staff

Untitled-1

Historically, consumers had very few meal choices in terms of what could be delivered to them. Pizza and Asian foods were about it. Carry-out/take-out/drive-through have been the primary options fulfilling consumers’ need for speed and convenience, reports Bonnie Riggs, director of The NPD Group foodservice division.

Recently, restaurant operators have offered convenience by making it easier for customers to obtain a prepared meal through delivery options, particularly in large metropolitan areas. It is obvious consumers find appealing the availability of delivery options beyond traditional pizza and Asian foods.

As restaurants emphasize delivery, UberEats and Amazon have muscled into the foodservice market and are also influencing how consumers purchase their meals. Other services like Doordash and Instacart are also gaining momentum, keeping customers away from convenience stores in favor of home delivery. Emerging services such as Munchery deliver food directly from commissaries, bypassing the brick-and-mortar stores altogether. To remain competitive, convenience store operators must keep pace to maintain sales in this crucial category.

To help convenience store operators explore whether delivery is right for them, the National Advisory Group (NAG) has partnered with Riggs and The NPD Group for an educational session titled, “Foodservice: Delivering the Goods” at the 2017 NAG Conference in Nashville, Sept. 10-13. The session will be moderated by Ed Burcher, the vice president of foodservice for Ohio-based FriendShip Foods.

In this important session, Riggs will explain why delivery–beyond traditional pizza delivery–is a growing business.

In fact, Riggs reports, delivery traffic outside of pizza is growing strongly, up by double-digit rates since 2012, while traditional quick-service restaurant (QSR) pizza delivery is on the decline. It must be noted, however, that the decrease in delivery for QSR pizza is primarily attributable to small chains/independents.

Double-Digit Growth
Delivery options outside of pizza are still relatively small, with roughly six million delivery-related visits in the past year. But there is little doubt that the growth rate for categories outside of QSR pizza will continue on a strong growth path. All types of restaurants are increasingly partnering with delivery services, such as Eat24, Grubhub, and Door Dash, because of the availability online ordering, particularly through mobile apps.

Consumers want the “eat out” experience of quality food, but they’re saving money by having food delivered to their homes. The increase in consumers eating more of their meals at home has been growing for several years. What’s behind the increased demand for restaurant meals that can be eaten at home? It varies. For some, it’s about time constraints and working from home. Others want to spend more time at home with the family and they’ve increased at-home leisure activities.

Delivery is one of the most convenient options foodservice operators can offer to address consumers’ needs for convenient meal solutions. And operators have new options available to them when it comes to entering the delivery market, Riggs said. Furthermore, c-store owners no longer need drivers, vehicles and insurance in order to offer their customers a delivery option. Multiple menu aggregators provide this service. Some work with select restaurants only, some charge restaurants a fee to offer their services and others do a mix of both, charging the customer and restaurant. Uber is expanding its foodservice delivery options with the guarantee of lunch and dinner meals delivered in 10 minutes.

If delivery fits your business model and is operationally feasible, now’s the time to consider adding it as an option for customers. It’s one way to stay competitive in a changing foodservice market, Riggs said.

For more information on delivery, register now for the NAG Conference to get The NPD Group’s expert analysis of this growing industry trend.

Subscribe to our free mailing list and always be the first to receive the latest news and updates.