Through a special arrangement, what follows is an excerpt of a current article from Convenience Store Decisions magazine presented here for discussion.
It's no secret that c-stores have "borrowed" ideas from outside channels. Thanks to Starbucks, c-store operators learned that customers would pay $4 for a cup of coffee as long as it was a high-end brew. So it should come as no surprise that drug stores, fast-food chains and, yes, Starbucks are keeping a close eye on the convenience channel for the same reason - increasing market basket rings and reclaiming the consumer dollars that convenience operators have enjoyed.
Below are a few developments among different retail and foodservice formats:
Drug stores: Walgreens Co. is testing a self-service beverage station, called Cafe W, featuring premium coffees and cappuccinos, tea bags, fountain soda, icees and, possibly, pastries and fruit cups.
"We are in the very early stages of developing Cafe W, with a little over 100 of our nearly 6,000 stores having a version," said Carol Hively, Walgreens's corporate spokeswoman. "This is an evolving concept, so Cafe W may not stay the same going forward."
Donut shops: Dunkin' Brands, the franchisee of Dunkin' Donuts, launched a store prototype in Clifton Park, N.Y., featuring personal pizzas and flatbread sandwiches at suggested prices of around $4. Pre-made sandwiches are heated in convection-style ovens in 90 seconds. By early next year, all of the Capital Region's 106 Dunkin' stores are expected to have the wider menu.
Fast food chains: Jack in the Box Inc., which introduced the first breakfast sandwich at a major fast food chain in 1969, introduced a sirloin steak & egg burrito, a 10-inch flour tortilla stuffed with strips of sirloin steak, scrambled eggs, hash brown sticks, shredded cheddar and pepper jack cheeses, and chipotle sauce, served with a side of fire roasted salsa. The $2.99 item was conceived after the success of the chain's sirloin burger and steak 'n' cheddar ciabatta sandwich. Unlike fast food competitors, Jack in the Box offers the breakfast burrito all day.
Coffee: After eventually finding success with gourmet breakfast items such as eggs Florentine with baby spinach and havarti, Starbucks this summer expanded its salads and sandwich selections to capture more lunch dollars. Newer lunch selections include the tomato mozzarella insalata and the fiesta salad, a fire-roasted corn and black bean salad topped with juicy grilled chicken. The company also offers regional selections in each of its markets.
Discussion Questions: Do you think c-stores are losing their edge as other stores and food-service chains increasingly play up convenience and lunchtime offerings? If so, what are some options available for c-stores to recapture their position? Also, are you concerned about the blurring of retail channels as all formats move to address convenience?