Street Corner’s Post-Pandemic Reinvention

from CStore Decisions January 2022

NATO Update: FDA Director Provides Update on Federal Tobacco Regulations

Street Corner convenience stores are entirely franchisee-run. Those who own the company also have experience operating Street Corner stores.

Street Corner franchise from 2014 to 2019.

“All of us that own the company actually have stores ourselves or have in the past,” Dhillon said.

That distinction is something that Dhillon believes sets Street Corner apart from other franchise models.

“We’re actual franchisees who are running the company. We’re not just some corporate guys who never, ever owned a Street Corner franchise. We understand what the issues are in the franchise world and how we’re going to fix them, and that’s because of our experiences as franchisees,” he added.

The result is a ‘franchisee-centric’ company that works to make running a Street Corner business as easy as possible for franchisees.

When CStore Decisions last profiled Street Corner in 2010, the company was focused on 300-1,000-square-foot stores and kiosks in shopping malls.

Twelve years later, “a lot has changed,” Dhillon said. “We’re still in the mall business; it’s just not our focus.”

Of the 38 franchisee-run sites that Street Corner has today, Dhillon estimates that around 20 are mall locations. “There are still mall stores that perform really well saleswise, and we’re keeping those open,” he said.

But as it looks ahead, Street Corner plans to focus its growth on its three prototype models.

THE EXPRESS

The Express model will appear at smaller stores — airports, college campuses, office buildings — in the 800-1,500-square-foot range, with cashierless checkout. “The Express model is going to have autonomous technology strictly because we’re not going to sell any age-restricted items at those stores, like tobacco, alcohol, etc.,” Dhillon said.

One of his San Diego stores is the first Street Corner to feature autonomous checkout. “It’s in an office building, and there’s no cashiers. You swipe your debit or credit card to unlock the door, and you walk in. The artificial intelligence knows exactly who you are and what payment method is linked to you. You pick up what you want, and you walk right out,” he said.

URBAN MARKETS

When Dhillon joined Street Corner, he identified a gap in the market between large-scale organic grocery stores like Whole Foods and traditional convenience stores. Urban Market locations look to fill that gap with healthy convenience.

“That’s where we saw the opportunity,” he said.

At the Urban Market locations, guests can find the type of healthy, local and organic products they would find at an upscale organic grocery store as well as the typical fare they’d expect from a convenience store. Fresh grocery is a key component of this model, with an optional fullservice deli.

Urban Market stores measure between 2,000 and 5,000 square feet and feature drive-throughs. There’s also a self-checkout stand in-store where customers can purchase non-age-restricted products.

Mobile checkout will also be available through the Street Corner app.

THE FUEL STATION

Traditionally, Street Corner stores have not featured fuel, but that’s changing now as Street Corner introduces the Fuel Station model. Fuel Stations are essentially Urban Market stores with a forecourt.

At the end of November, Street Corner opened its first Fuel Station location in Aberdeen, S.D., partnering with Sinclair Oil as the gas brand.

“A good thing about Street Corner is the franchisees can pick whatever fuel brand they like, and we help them negotiate the contracts,” Dhillon said.

Fuel stations, like the one in Aberdeen, also feature order-at-the-pump technology. The pumps feature builtin 27-inch touchscreens that let fuel customers purchase in-store items and pay in a single transaction.

Most items, including food, are available through the system, with the exception of age-restricted products.

The credit card customers used for gas will also be charged for the products. Customers can collect their order at the drive-through, or they can have it delivered to their car via curbside pickup.

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Today, Street Corner focuses on three distinct models: an Urban Market, a Fuel Station or an Express store. All concepts look to provide a tech-forward exprience for the customer, while delivering fresh, healthy food, as well as traditional c-store items.

REFRESHED DESIGN

No matter which concept franchisees choose, new Street Corners are designed to achieve a fresh, healthy and urban look that features local images inside the store, including a skyline wall mural specific to the region. Graphics feature a color scheme of black, gray and white, with pops of bright color.

Street Corner isn’t requiring existing mall franchisees to remodel, but if Street Corner does resell a store, the new franchisee is required to update the design and branding to the latest standards, including a new logo that rolled out in 2019.

Dhillon noted that the COVID-19 pandemic gave Street Corner an opportunity to reinvent itself. “I think that’s so important as a franchise. You have to look at the future of retail, how you can change and how to make that transition, and I think we did a lot of thinking during COVID,” he said.

As the world reopened, the chain had a busy fall, debuting a number of new stores: Fuel Stations in Aberdeen, S.D., and Ipswich, S.D., plus Express stores in Cincinnati, Ohio, and Rockaway, N.J. — and it’s not about to slow down. The 16 new sites set to roll out by next summer will be “all over the map,” and a mix of the three new formats.

At press time, the chain was also set to introduce a Fuel Station in Merced, Calif., an Urban Market in Clovis, Calif., plus its first international store in Panama City in early January 2022.

“We also have a couple of mall stores we’re reopening in some of the malls that shut down during COVID,” Dhillon said. “We are seeing a lot of increased sales in certain shopping centers.”

FRESH FOOD

When it comes to foodservice, Street Corner aspires to become a destination for shoppers. Foodservice veteran Fred Wencel, consultant, fresh food and bakery program for Street Corner, created a new menu that features naan as a carrier for pizza, wraps and other menu items.

Millennials today, like Dhillon himself, are looking for fresh, healthy food options. “I’m 36 years old,” Dhillon said. “I want to walk into a c-store and grab a nice vegan sandwich or something that’s freshly made in front of me. I’m not just picking up a taquito from a roller grill. And that’s what we’ve done in these communities. We’re changing the way people look at convenience stores.”

The new proprietary menu debuted at the Aberdeen, S.D., store that opened in late November. All food is made fresh in-store.

Sandwiches are wrapped in naan and eaten like a taco. “For sandwiches, we have your traditional Turkey Club, Buffalo Chicken, Chicken Caesar, Steak Fajita, Beef Bulgogi, Hot Italian Beef, Chicken Masala and so on,” Dhillon said.

Single-serving pizzas are also made on naan and include varieties such as Beef Bulgogi, Chicken Chipotle, Margarita, Firecracker, Pepperoni, Hawaiian Ham, BLT, and Chicken Alfredo. The pizzas cook in two minutes and 30 seconds, made fresh in front of customers.

Salads include Chili Lime Chicken, Chicken Caesar, Greek Chicken and Turkey Club. “We also cut pieces of naan bread and put it on the side for them,” Dhillon said.

The breakfast menu features a number of sandwiches on English muffins or croissants, including Eggs Benedict; Egg White, Spinach and Cheese; and Steak and Egg.

Street Corner also features a robust grab-and-go selection, all of which is made inside the store, packaged and placed in the grab-and-go case. Sandwiches include Tuna, Chicken Salad, Egg Salad and Turkey and Cheese.

“We’re making everything that’s in our grab-and-go case fresh on the property — even our salads, fruit salads, fruit cups and parfaits,” Dhillon noted.

Street Corner’s stores are designed to achieve a fresh, healthy and urban vibe, and offer a newly revamped menu that centers around naan as a carrier for pizzas and sandwiches.

The Urban Markets and the Fuel Stations feature the full menu, while the Express stores feature the grab-and-go menu only. The Express stores don’t have a kitchen to prepare the items, so grab-and-go items are delivered from other Street Corner stores.

Street Corner features online ordering, in-app ordering, delivery through partnerships with third-party apps and curbside pickup.

The Street Corner app is powered by eHungry. Street Corner also has plans to launch a special catering menu through ezcater.com.

BARISTA PROGRAM

Coffee is a big focus for the chain, too, and it’s looking to stand out with its organic fair-trade coffee.

“Our Express stores have self-serve, organic coffee and a traditional coffee bar,” Dhillon said.

Urban Market and Fuel Station stores will have the option of adding a full-service barista coffee program. Most of the newer Urban Markets currently feature the program, including the one opening in Clovis, Calif., a store at the University of California San Diego, and one that is set to open in Hermosa Beach, Calif.

“The only reason we didn’t do it in (our newest) South Dakota store is because coffee wasn’t a big focal point for that demographic,” Dhillon said. The Merced, Calif., location is the first Fuel Station to feature the barista program.

The Aberdeen, S.D., store is unique in that it features both a casino — a popular trend for gas stations in South Dakota — and a bar called Mulligans.

“The owner of the property used to operate a restaurant. They converted the property into a Street Corner, and they had the licensing rights to sell on-site alcohol,” he said.

The bar features Street Corner’s new food menu.

TECH-FORWARD

Technology is an important focus for the chain, from the cashierless Express stores to the order-at-the pump technology to the self-checkout kiosks, which are currently available in the four newest stores.

“The key thing is, we can turn our point-of-sale (POS) systems on and off to do self-checkout or full-service. If it’s a slow day, and I’m short an employee, I can convert my POS — one of them — into a self-checkout just by the click of a button,” Dhillon said.

Street Corner is developing a points-based Street Corner Rewards program. Currently, the company features a coffee club program where every seventh cup is free.

Electric-vehicle (EV) charging stations are being added to stores on the West Coast.

“If you look at our stores, we are small, we’re new, we’re urban, we’re fresh. We give that young vibe,” Dhillon said. “We reinvented ourselves, and we’re seeing a new generation of franchisees — the millennial generation — is coming in.”

Street Corner aspires to have one c-store in every major U.S. city and offers a flexible option for franchisees.

The chain is now examining how it can help upgrade existing stores and help them grow sales, engaging oneon-one with franchisees weekly. For example, it’s upgrading inventory management and back-office systems and digitizing daily checklists.

“We’re actually dissecting each store, looking at their sales data, comparing them to last week’s sales,” Dhillon explained. “We’re asking, ‘How can we help you?’ and working with the franchisees in a partnership instead of dictating what they have to do. If they have an idea, we want to hear it, and I think that’s one thing a lot of franchises don’t do.”

As he steers Street Corner into the future, Dhillon’s goal is both simple and ambitious: “I want to perfect the system in the franchising world.”

quickBites

COVID-19 AND THE SHOPPING EVOLUTION

After nearly two years of pandemic fatigue, COVID-19 continues to shape shopping habits, with local, loyalty and online purchases still trending, even as some customers are less concerned about the latest omicron variant.

VS. OMICRON

Inflation Omicron variant

Very concerned 52% 26% Somewhat concerned 36% 40% Not at all concerned 12% 34%

Source: CivicScience 2021, 4,150 responses from Nov. 29-30, 2021, Margin +/- 2%, weighted by U.S. Census 18-plus

ONLINE MEETS ON-SITE

Shoppers want in-store tech that provides them with user-generated content (UGC). What technologies would you like to see integrated into the in-store experience?

• 36% Virtual displays showing other customers’ reviews, photos and videos • 34% QR codes that can be scanned to read reviews

• 33% Live/up-to-date star ratings in-store based on customer reviews/activities regardless of omicron

Source: Bazaarvoice, “The State of Retail Report,” based on survey responses of over 8,000 consumers from the U.S., U.K., France, Germany, Australia and Canada, December 2021

LOYALTY MATTERS

56% agree: I regularly make unexpected purchases as a result of loyalty program offerings

(e.g., special discounts for members).

Source: SpotOn Retail and The Harris Poll, “2021 Consumer Shopping Study,” October 2021

DELTA VS. OMICRON

Consumers are less concerned about the new omicron variant than they were about the delta variant earlier this year. Real-time market research platform Suzy repeated a survey it conducted in August around the delta variant and found:

• Only 28% of respondents are putting nonessential travel on hold, compared to 72% who said the same about delta. • 12% plan to stop shopping in-person, compared to 20% in August. • 20% will be pulling back from recently resumed activities like inperson socializing or work, compared to 38% who will continue with plans to return to normal activities regardless of omicron.

Source: Suzy real-time surveys, August and November 2021