The re-imagining of convenience stores

Like most retail categories, convenience stores are undergoing some changes. In a session at NRF 2022: Retail’s Big Show moderated by Marianne Wilson, editor-in-chief of Chain Store Age, representatives of three new convenience store chains discussed what their companies are doing and why. Taking part in the discussion were Carla Dunham, chief marketing officer, Foxtrot; Rachel Krupa, CEO and founder, The Goods Mart; and Mike Fogarty, CEO and founder, Choice Market.

Foxtrot is a Series C startup with 16 stores in the company’s headquarters city of Chicago, Dallas and Washington, D.C. “We think of ourselves as re-imagining what it means to be convenient,” Dunham said. Foxtrot, she noted, has a big focus on merchandising; 30 percent of products in the store, both groceries and shelf-stable items, are produced in-house.

Choice Market is a multichannel convenience retailer headquartered in Denver that focuses on high-quality, fresh and accessible food. It currently has three stores, with three more planned for later this year. The Goods Mart, headquartered in New York, describes itself as a socially conscious convenience store. In keeping with the realities of the New York real estate market, it has some very small stores: The location at 30 Rockefeller Center, for example, is about 200 square feet.

Asked to differentiate Foxtrot from other convenience stores, Dunham said the stores act both as purveyors of on-the-spot impulse buys and as fulfillment centers for app-based or online purchases. “We deal in all sorts of use case scenarios,” she said, “your first cup of coffee, a bottle of wine to take home with you or ice cream to be delivered later.”

Choice Market has a heavy emphasis on fresh produce and organic food, Fogarty said. “We meet people how they’re shopping today — prepared food, raw food and snacks, all together.” The Goods focuses on curation and emerging brands, according to Krupa: “We look for a ‘better for you’ alternative to conventional C stores: A better-for-you Red Bull, for example.”

For both Choice and Foxtrot, technology is at the core of the business. “We started as an app,” Dunham said. “Retail came later.” The emphasis on technology, she added, was not intended as a substitute for in-person sales — retail, she noted, has enjoyed double-digit growth during the pandemic — but as a response to what customers want.

“Tech is a little on the back side for us,” Krupa said. “We use it to enable our associates to guide customers to new products. Our focus is on old-school, customer-facing service, and the goal is that every customer should leave the store feeling better than when they came in.”

Wilson then turned to the issues of product selection and merchandising. In a rapidly changing category characterized by small stores and relatively small inventories, how do you decide what brands to carry? Foxtrot’s custom-built technology stack, Dunham said, provides abundant and current data on what’s selling and what isn’t, which helps. There is also a lot of disruption; 10 to 15 percent of total inventory is new each month.

“We partner with producers,” Krupa said. “We’re looking for non-GMA, no added flavors, and fun.” Like her colleagues, she encourages women-owned and BIPOC-owned businesses: 15 percent of her company’s suppliers, she said, have Black founders.

Finally, the issue of motivation arose: Why do you do this? Why was your company started? Speaking of her company’s co-founder, Dunham said, “Mike LaVitola was frustrated because he couldn’t easily get a particular cookie that he wanted in Chicago. He said, ‘Why is it so hard to get stuff?”

Fogarty, who grew up outside Philadelphia in what he described as “deep Wawa country,” was moved to offer healthier produce and other goods in an environment that spoke to him. Krupa, who grew up in a small town in Indiana, loved the local Sunoco station and its store. “It was happiness,” she said. “Afterward I worked in PR for 20 years, and then the birth of The Goods happened.”