C&B Notes

Not Your Grandma’s 7-Eleven

Entrepreneurs are enhancing convenience stores’ traditional value propositions with ultra-premium products, hip design, and expanded services like home delivery. Don’t let the Kombucha on tap make you feel like an outsider; Choice Market, a new-gen C-store in Denver, reports Corvus drip coffee, organic bananas, everything bagels, and Coca-Cola as its top-sellers.

America’s 150,000-plus C-stores are typically understood as places you go for Slim Jims and cigarettes, not delicious (let alone vegan) food.  Yet new upstarts like Choice Market, Green Zebra Grocery in Portland, Ore., Foxtrot in Chicago, the Goods Mart in Los Angeles and Amazon Go in Seattle are open long hours (if not 24) and use the same small spaces to offer a wider range of options. You could meet a friend for coffee, pick up a few reasonably wholesome items for dinner or even fill up a growler of beer.  At Amazon Go, customers needn’t even pull out their wallets to pay, thanks to an app that tracks stock and charges their accounts automatically.  Traditional players, too, are adding hardwood floors and more attractive lighting.  Wawa, the mid-Atlantic chain famous for its hoagies, is rolling out customizable salads across their 790 stores and testing delivery.  “People will come in and say this isn’t a convenience store,” said Lisa Sedlar, the founder of Green Zebra Grocery. “ And I say, ‘Of course it is.’ We are redefining what it means to be a convenience store in America.”

Several trends are driving change, according to research firm the Hartman Group.  In the era of fast-casual restaurants, customers of all ages aren’t willing to sacrifice good taste or a pleasant experience for fast and easy.  And despite claims of being time-starved, they don’t seem interested in a one-stop shop.  Primary shoppers report making more frequent trips to buy food at a range of outlets, from traditional grocery stores to specialty shops: The average number of grocery trips made per purchaser, per month jumped nearly 30% between 2014 and 2017.  Finally, snacks—the raison d’être of convenience stores — are supplanting meals.  Of all “eating occasions,” 50% are now snacks.

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Green Zebra’s Ms. Sedlar first imagined a better convenience store almost 20 years ago.  She was living in Boulder, Colo., and saw people head up to the mountains to hike or bike on their lunch hour.  “They’d come down and stop at a mini mart and come out with a Big Gulp and a Snickers,” she said with a laugh.  “I remember thinking: ‘Wouldn’t it be cool if that mini mart had organic salads and delicious sandwiches?’”  Ms. Sedlar went on to work as a buyer for Whole Foods, then as president of New Seasons, a West Coast grocery chain.  But she never gave up on the idea.  In 2013, she opened the first Green Zebra in Portland, then two more.  A fourth store will open in early 2019. Green Zebra targets frequent shoppers: customers who need to pick up a few things and don’t want to wind their way through a 40,000-square-foot store.  Produce sells well, making up 8% of sales, compared to about 11% at a traditional grocery.  While the offerings skew local and sustainable — this is, Portland, after all — Ms. Sedlar has no interest in being the food police.  (Craving a Coke? No problem.)  The 4,000-square-foot Green Zebra on the Portland State University campus serves 1,400 customers a day; the average bill is $8.

Could these upstarts replace old-school convenience stores?  To fund expansion, Foxtrot has raised $6 million, and Green Zebra is in the process of raising $10 million to expand.  Both are setting their sights on hundreds of stores.  Choice Market, meanwhile, plans to open its second store, in Denver’s Mariposa neighborhood in 2019.  Mr. Fogarty said that the product mix may change to meet the needs of the less-affluent neighborhood.  He may stock conventional fruits and vegetables instead of organic.  But “we’re not going to be a 7-Eleven just because it’s lower income,” he said.  In fact, disrupting the chain that’s heretofore defined convenience appears to be a common goal

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