Building On Food Service
Recently, SEI started a ‘Grab-n-Go’ test in a few stores in Dallas. The idea behind ‘Grab-n-Go’ is to have hot food and grill products stocked in boxes ready to go to help increase sales without adding costs to payroll. The test has shown success in terms of increasing sales of the grill products, but the concept has done not so well at increasing hot foods sales. The results showed that as the sales for ‘grab-n-go’ grill products increased, the sales for the hot foods products took a hit.
Most of this downturn was attributed to poor product visibility due to hot foods products being placed in boxes. We, as consumers, like to see what are about to eat. We want to see the freshness as much as we want to taste it! A few other challenges the study brought out was that having hot food products in pre-packaged quantities took away from upselling, not to mention that the added cost of writing off boxes cut directly into a store’s gross profits.
This test only reaffirms that we have quite a few challenges in the way of becoming a food service destination, a major challenge being that 7-Eleven stores look nothing like any other food service destinations. Let’s take our “roller-grill/hot foods/condiment station/nachos/chili-cheese” section sitting mostly above half-empty racks of chips as an example. All these products are stocked too close to each other and yell ‘clutter’ to our customers, especially new customers.
A simple and inevitable solution to this problem is to remodel our stores. In order to become a future food service destination or to even take a small piece of this big pie known as the food service industry, SEI must focus on programs to remodel our stores to fit the food service profile.
Remodeling stores and clearing out space from the center of the stores to increase hot food servings would help attract new customers and maintain existing ones. In addition, SEI needs to invest in digital POP signs as opposed to what we have now. Digital POP signs would not only eliminate the cost of reprinting POPs every month and cost of labor that goes behind changing these POPs, but it will also help our store profile in terms of being more appealing and current.
Another major challenge that can be seen across the board regarding food service is insufficient advertising. We live in the times of ten-second stories, Instagram filters, Facebook updates, and it almost seems shocking to have an advertising challenge. Nevertheless, it’s a widely discussed issue throughout the 7-Eleven community, especially among franchisees. Our promotions are not being communicated with new customers, and a very simple example of this would be our chicken sandwich combo promotion. Store operators participated in this promotion, yet the new customers never materialized. Due to insufficient advertising focusing on bringing in new customers, this promotion and other promotions of this nature often not only FAIL to generate new revenues, but also cut into franchisee’s existing revenues.
Once again, a very simple solution to this would be to simply change with the changing times. SEI ought to advertise better and market our brand better to help bring in new customers to offset the cost of offering these promotions. If we have the advertising piece of the puzzle solved, we can bring in more customers and increase sales, which in turn, can lead to lower negotiated costs with our vendor partners, making food service a higher GP and extremely profitable category. Only then, the whole 7-Eleven enterprise can truly get behind it 100 percent!