Tuesday, January 28, 2014

Finally, the urban model for a healthy convenience store

Many urban neighborhoods, especially in poorer areas, lack conveniently-located supermarkets.  As a result, many people shop at convenience and corner stores, as well as drug stores and dollar stores, or buy prepared foods at carry outs.  These places sell small amounts, if any, of fresh fruit and vegetables (and there are various initiatives to change this in some places, e.g., NYC, see "Bringing fresh fruit to the corner store" from the New York Times and the Shop Healthy Implementation Guide).

From time to time I write about exemplary examples of convenience stores that are more than just a typical 7-11 (coffee and pastries, Slurpees, some hot foods, and a small array of other foods including overpriced processed items but also, to their credit, a cold case selling milk, eggs, and related foods--the 7-11 by us sells milk and eggs (but not cage free, brown eggs) at prices competitive to supermarkets.

The problem with chain and franchised stores in serving different markets in different ways is that most of the industry has already defined their positioning--around automobile-enabled consumers, and have rigid, standardized formats that aren't conducive to differentiation.  The stores make most of their money selling things that are bad for us--gasoline, cigarettes, and beer.

The drug store chains have begun to recognize the need to differentiate their stores for urban markets.  For example, CVS now has a store format for cities like Washington, DC ("CVS clusters consumables in new urban store concept," Drug Store News) where the stores are conceptualized in part as a convenience store with expanded food offerings--although I think the pricing is still too high.

While Walgreens has been introducing premier stores in cities like New York City, Chicago, San Francisco, and now DC with special offerings in food and cosmetics and health care--some stores in Brooklyn sell beer on draft (bring your growler) and others have a sushi bar.

A Navarros store--the company is based in South Florida--has a cafeteria and business center ("Navarro Discount Pharmacy celebrates opening of 33rd store," Drug Store News).  Walgreens many years ago used to have a separate restaurant chain, and of course, was once known for in-store food service--soda fountains--as were most pharmacies and the era's equivalent of dollar stores, the 5 and 10 cent store like Kresges, SH Kress, and Woolworths.

Convenience store companies have been slower to change.  First, most are focused on gasoline sales, which makes them un-urban anyway.  But industry leaders like Sheetz and Wawa have expanded their prepared food offerings, have extensive in-store seating, etc.

Interestingly, Kroger, the nation's largest supermarket company, has extensive convenience store holdings, but their stores are no different than any other company in the market.  But Giant-Eagle, a supermarket chain focused on Western Pennsylvania and Ohio, has a convenience store division, Get Go, that focuses on cross-marketing, featuring store brand products, and Market District (their upscale unit) branded coffee.

Here and there are other examples of change.  Parkers in Savannah Georgia has a couple of upscale stores serving the Historic district in Savannah.  7-11 has a couple of upscale test stores in Florida and NYC.  Famima, a Japanese company--known for innovation--has stores on the West Coast.  And here and there are some examples of more change.

The Yummy's group in Southern California, with a handful of stores, is more focused on online sales, especially of high-margin prepared food items and fast delivery within an hour ("GROCERY 3.0," Progressive Grocer) is one.

Green Zebra in Portland, Oregon is another pathbreaking example.  The current issue of Convenience Store News features a story, "Convenience Can Change Its Stripes," on a new company started by people who had worked at New Seasons Supermarket, a regional health foods supermarket chain.

No convenience store that I am aware of looks like this!  Image from CSN.

They call what they do "healthy convenience."  It's a small format--5,000 square feet--but modeled on a grocery store.  They call themselves "one half convenience store and one-half healthy foods store."  And because "healthy foods" tend to cost more, they give a 7% discount to people receiving SNAP or other food program benefits.  From the article:
"We offer some standards you would find in a grocery store, but in a smaller format," said Hiller-Webb."With the concept of healthy convenience, we say there is only room for the good stuff. We have a meat and seafood counter, and a cheese department, which is unexpected at a c-store, and an organic produce section."
They extend innovative thinking for the entire concept and its execution.  (Recognize that this isn't in a distressed area.)  For example:
Because it is truly a neighborhood store, many people will ride their bikes to Green Zebra rather than drive, so the store offers more bike parking spots than it does car parking. The store also features a variety of bike amenities, including a tire tube vending machine and a cargo bike and trailer available for loan to customers who need to transport groceries home.

"There is a covered area with heat lamps outside that can seat between 20 and 30 people, and we offer customers Wi-Fi so they can take their computers out and work here if they want," Hiller-Webb added.
This Portland Oregonian story on their grand opening includes video.

This store was enabled by the decade of experience the store proprietors have in working in supermarkets.

Green Zebra is a good example of four points.  First, that it's possible to be innovative.  Second, that if you want innovation, you're not likely to find it in chain-owned or franchised stores.  So that means a third point, that if you want stores like this, especially in distressed areas, which have the need but not the demographics to support their creation, you're going to have to find ways to foster their development (financing, tax incentives, etc.).  But fourth, because it's a lot easier and less risky for cities to give supports to existing companies, especially chains, it's hard to make this happen.

Protected bike parking at Green Zebra.  Image:  CNU blog entry, "CITY SPOTLIGHT: Beyond Portland, U.S. Biking Infrastructure Needs to Aim Higher."


  1. charlie8:35 AM

    I'd say France has great examples of "convenience stores" but they have a tax advantage. Sitdown restaurant has a 20% tax, take-out (and McD) is taxed at 5.

    In fact, that would be a good test case in DC for killing the prepared foods tax (10%) for smaller stores.

    I still think Glen's is a useful model (on site alcohol sales) and Marvelous Market is also one (more lunch, but in some neighborhoods but not doing well)

  2. I took Suzanne to eat at Glen's a couple months ago and it was a real disaster...

    But the cafe model is a good one.

    That's the model for better off areas, cafe + market, but they sell stuff at premium prices.

    The model for poorer neighborhoods is a subsidized general store.

    2. The idea to reduce the prepared foods tax is interesting. But doing it willy nilly encourages purchase of "bad stuff" as easily as purchasing "good stuff."

    3. I still intend to do a longer piece with graphics about 10 or more store types for this kind of stuff. One more thing in a very long queue.

    4. Speaking of not France but a company active there, is Spur. It's an international brand. Some of their in-nation affiliates do more along this line of convenience store, but not focused on healthy so much as fresh.


  3. charlie9:42 AM

    We'll agree to disagree about your views of healthy food (thanks cpsi for shoving unsaturated fat into my school lunches!) but let me make the point that ANY prepared food is better than the hot dog+pasta diet that you eat when you are poor.

    again from france:

    I'll also note that it is manpower intensive.

  4. have you really done a good sampling of carryouts?

    I can't claim that I have, but I certainly was in and out of the ones on H St. NE. (a customer at Danny's sometimes, but also when I was doing H St. Main Street revitalization stuff.)

    These places aren't known for high quality food.

    2. as much as we might complain about Murry's and their focus on bulk sale of boxes of meat products, they also sell frozen vegetables, etc.

    and it's easy to add vegetables to a pasta sauce, with rice, etc.

  5. sorry, I should define high quality as lower fat.

    note that when I didn't cook (which was a big portion of my life), it was not uncommon for me to go to a Chinese storefront restaurant on the same block as La Tomate (the place is gone now), where the daily special was $4.95 with that 10% tax, and they'd give extra rice for no extra charge....

    ... and frankly, the veg. nachos at Baja Fresh are filling and a good buy for not much more. (Hell, a lot of the time, going to "authentic" sit down TexMex/Mexican restaurants, on the meal's end I often compare the place, unfavorably, to Baja Fresh, which seems to do a better job than a lot of places).

    So I can see your point.

    But it is cheaper to feed people, especially multiple people, by cooking, rather than going out to it.

    e.g., making a dal or curry dish, chili or stew with vegetables only is pretty cheap. (I tend to buy with my eyes and buy too many vegetables, and to reduce waste, it's good to hide not quite spoiled vegetables in a stew or chili or dal or curry.)

  6. ... I do the same thing, a kind of ratatouille (carrots, celery, zucchini, tomatoes--mostly canned, onions, eggplant if we have it, etc.) with pasta.

    Maybe instead of growing grass in treeboxes the city could grow just herbs like rosemary (I just pick it from its hedge in our side yard), although you'd have to worry about dogs peeing on it.

  7. charlie11:01 AM

    "But it is cheaper to feed people, especially multiple people, by cooking, rather than going out to it."

    Absoutley -- cooking scales.

    But it cheaper as a single person, and if you don't include the 10% tax can be cheaper for groups as well. It is cash flow not pure savings. If I can't buy $100 worth of groceries it gets harder to scale it down to $2 a meal.

    Bread and Circuses and all that.

    And while I'd be delighted with a pol-pot movement to drive section 8/disabled people into the fields to grow their own food, it is sort of ignoring the real problem....

  8. rice + beans is pretty cheap. Frozen vegetables aren't that expensive if you don't buy the "added value" versions.

    e.g., I bought a bucket of "thirds" apples at the Takoma Farmers Market. Probably 5 pounds or more for $2. Some went bad for various reasons, but I made a pie from the ones lying around. I make banana bread or smoothies all the time from "old bananas".

    but yes, I am just being a pain in the ass. Somewhere between your position and mine there is a happy medium.

    And Mao with the steel program proved that Pol Pot was misguided... (and I think about these issues and the locavore-urban agriculture movements)