Research firm: Convenience stores gain in foodservice arena

Convenience stores, along with supermarkets, discount stores, and price clubs, have posted stronger foodservice traffic growth than any other segment of the restaurant industry over the past two years, according to The NPD Group, a consumer and retail information company based in Port Washington, N.Y.

While total restaurant traffic grew by three percent over the past two years, foodservice purchases at retail stores outperformed the total industry with five percent growth in the number of meals bought for immediate consumption, the research firm reported Sept. 12. That growth amounts to approximately eight billion meals and snacks that were bought at retail (for the year ending May 2007).

NPD reported that convenience stores are the most frequented channel for purchasing prepared foods and beverages at retail, capturing 54 percent of all foodservice traffic at retail outlets, followed by supermarkets (32% share). However, discount stores (such as Wal-Mart and Target) and price clubs are showing the strongest rate of foodservice growth.

"For years, supermarkets and convenience stores were outlets for 'packaged foods,'" said Harry Balzer, vice president of The NPD Group. "But the growth of the restaurant industry during the past 25 years – and especially the growth of take-out meals – has shown everybody in the food market that consumers now want 'packaged meals.'"

Competition in the foodservice arena remains fiercer than ever, with some quick-serve restaurants and chains expanding their offerings or number of outlets.

NPN MarketPulse reported in August that Dunkin’ Donuts, Canton, Mass., has launched a campaign to open many more outlets, and that Wendy’s International, Dublin, Ohio, has an ambitious program to build breakfast trade.

In what it describes as the largest store development agreement in its history, Dunkin' Donuts announced Aug. 23 a deal to open 105 new Dunkin' Donuts locations in Pittsburgh and Allegheny County within the next several years, according to an article by Tim Schooley in Pittsburgh Business Times.

The expansion plan is expected to include sites in freestanding outlets, strip mall locations and stores within convenience marts, according to the article, which also noted that the chain is undergoing a campaign to triple the number of Dunkin' Donuts stores in the United States to 15,000 by 2020.

Wendy's announced Aug. 22 that its new breakfast menu was available in 500 stores. Wendy’s said it expects to expand breakfast to nearly 750 U.S. and Canadian restaurants by the end of third quarter of 2007.