Monday Marketing Memo: Retail Format Innovation

Stretching the boundaries of convenience store retailing: Japan's Natural Lawson is awesome

Convenience stores are as ubiquitous in Japan as grains of white rice and packages of Ramen noodles. There are about 40,000 conbini, as convenience stores are called in Japan, in the nation, or one for every 3,200 residents.

One of the largest conbini operators in Japan, in addition to market share leader Seven-Eleven Japan, Circle K Sunkus and FamilyMart, is Lawson, which operates 8,400 convenience stores in all 47 of the nation's prefectures.

If the name Lawson sounds American that's because it is. The origin of the Lawson name originates in the U.S. state of Ohio in 1939. A man named J.J Lawson started up a milk business there called Lawson's Milk, and opened a chain of store's in the state to sell his milk. The milk stores evolved into convenience-type stores and in 1959 Consolidated Foods Co. bought out Lawson.

In 1974 Consolidated Foods partnered with Japanese food retailer Daiei to open the first Lawson branded convenience store in Osaka in 1975. Daiei opened many more Lawson stores throughout the 1970's and 1980's. In 1989 Daiei merged another chain, Sun Chain, it operated in Japan with Lawson and created Daiei Convenience stores. In 1996 the combined operation was renamed Lawson, Inc., with all the stores getting the Lawson banner.

The Lawson banner is long gone in the U.S. Its stores all became Dairy Mart convenience stores in the states over a decade ago.

The majority of the 8,400 Lawson cobini (c-stores) in Japan are conventional convenience stores similar to those in the U.S. and Europe. However, Lawson also operates two other c-store formats in Japan. The first is called Lawson Store 100, a 20-store chain which sells various items for 100 yen each. It's similar to a dollar or 99 cents store in the U.S.

Natural Lawson's key target market is women. Many of its stores also have female managers, which isn't traditional in Japan's convenience store industry. Pictured above is Shodo Yuka, manager of one of the retailer's Tokyo stores.

Lawson's other format, and the one of interest in this piece, is called Natural Lawson. It's an upscale, high-end convenience store format positioned to serve Japanese women and the nation's seniors rather than salarymen. Salarymen are working men in Japan. Like their counterpart convenience stores in the U.S. and Europe, which traditionally target men, the majority of Japan's c-stores still do the same.

There currently are about 24 Natural Lawson stores in Japan, with 12 located in Tokyo. The stores' offer a broad selection of foods and other items for shoppers. The focus is on health and wellness, and increasingly on upscale, fresh prepared foods, along with natural and specialty groceries and nonfoods. Specialty foods brands line Natural Lawson's shelves and perishable cases. There's locally-grown produce, including organic, provided by a local Japanese farming collective. Organic groceries, coffee, teas and other foods and beverages are plentiful in the stores. High-end, all natural cosmetics for woman are offered for sale along with other natural health and wellness-oriented items.

Premium, all natural international brands and products like Starbucks share shelf space with locally-produced Japanese brands in Natural Lawson convenience stores.

An area Natural Lawson is moving further into is offering a diverse selection of healthy, upscale-quality fresh prepared foods, breads and related items. For example, the natural c-store retailer sells an all-natural healthier version of the popular bento lunchbox, which is a staple of Japan's working class. Natural Lawson recently entered into an alliance with NaturalBeat, which operates a chain of sandwich and delicatessen stores in Japan. The stores' prepared food items are all homemade, using natural ingredients with no food additives, preservatives or artificial colors. NaturalBeat also has a subsidiary called Wholesome Co. Ltd. which produces all natural healthy fresh breads and other baked goods.

All Natural Lawson convenience stores are now selling NaturalBeat's healthy, upscale-quality prepared foods, including sandwiches, salads, entrees and other grab-and-go items. The stores also are featuring the healthy fresh breads and baked goods produced by Wholesome Co. Ltd. Fresh, prepared foods--especially all natural and upscale--are a rarity in Japan's cobini, so natural Lawson is blazing a new trail in the category for convenience stores in the nation.

In addition to its product selection, Natural Lawson is taking great care in how its stores look, something that wasn't evident when the first stores opened in 2001. Today's stores however reflect the retailer's target market and positioning. Soft colors and natural woods are used inside the stores, appealing to the retailer's prime target shopper--women. There's no neon lighting like in Japan's typical conventional cobini. Instead, soft, recessed lighting is used throughout the stores, complementing the natural woods and pastel colors. Many of the stores have a bar area where shoppers can lounge, and where trained staff members give out health, wellness and beauty tips.

Natural Lawson uses an upscale, attractive font style and natural motif graphic for its logo on the signs outside each store, inviting shoppers to come inside.

The stores' brand--via its design, merchandising and product offerings--says Natural Lawson is the place to shop for premium, natural and healthy merchandise in a convenient format. This is still new to Japanese shoppers who are used to going to a cobini to get coffee, tea, soft drinks, pastries and other basic convenience items. Conventional c-stores in Japan also are popular for offering mobile phones, fax services, ticket sales, photocopies and other similar service-type offerings.

There's a space in Japan's huge convenience store market for something other than traditional cobini retailing, which is what Seven-Eleven Japan, Circle K and in the main Lawson itself does with all but its 24 Natural Lawson and 20 100 yen format stores. This is especially true when it comes to quality fresh prepared food and meals merchandising. It's nearly non-existent in the nation's c-stores. You can get a basic sandwich and other prepared foods like in U.S. convenience stores, but that's about it. ( Basic bento boxes and versions of a few other traditional Japanese foods are available at some conventional stores.)

In fact, Natural Lawson is getting some competition in this yet to be proven merchandising niche of fresh prepared foods from British retailer Tesco. Tesco is opening a Japanese version of its popular and successful Tesco Express stores in the nation that loves convenience stores. Tesco Express stores are a mix of convenience store and small supermarket, typically selling high-quality fresh foods, prepared meals and other offerings found in Tesco supermarkets but offered in convenience store-sized urban settings.

The British retailer, which also is opening similar stores in the U.S. under the Fresh & Easy Neighborhood Markets banner, is opening 25 of these Express stores to start in Japan. The stores will sell basic grocery and other items along with lots of fresh prepared foods, meal solutions and quality grab-and-go items, along with other fresh and specialty grocery items.

Meanwhile, Natural Lawson is in the process of perfecting its merchandising mix, positioning itself not only as a higher-end cobini for fresh, natural and quality foods, but also as a destination for busy urban Japanese women who want quality natural health and beauty items in an attractive and comfortable setting designed with them in mind.

Natural Lawson cobini (convenience stores) even have all natural pet treat and upscale pet toy sections for man's (and women's) best friends.

There's no question Japanese consumers love their cobini. After all there's one convenience store for every 3,200 Japanese. In Tokyo, there's literally a cobini on every corner. And a joke in Japan says the only difference in the more rural areas is that there's a cobini on every other corner. To put it in perspective, the U.S. has about 24 times more land mass than Japan does--but it has only half as many 7-Eleven's.

Natural Lawson is stretching the definition of "convenience store" not only just in the c-store capital of Japan but internationally as well. Just as Tesco is importing its brand of "Express" convenience retailing to places like Eastern Europe, Japan and the USA, it will be interesting to see if retailers in these countries pick up on what Natural Lawson is doing with its 24 stores in Japan and try a similar format at home, in the U.S. or Europe.

To a degree it's happening in the U.S. and Europe already. In addition to Tesco's Fresh & Easy stores, eleven which have thus far opened in California and Nevada, there's Trader Joe's ( a somewhat similar format to Natural Lawson), Wawa, an upscale convenience store operator in the Eastern U.S., which puts a major focus on fresh prepared foods, and a couple others.

Whole Foods Market is in the process of opening its own upscale, all natural convenience-type store in Boulder Colorado. The store, called Whole Foods Express, will be a prototype for the supernatural foods retailer in terms of natural products retailing in a smaller, convenience-oriented format. The store will be about 14,000 square feet. In Japan that's considered a big store, especially in Tokyo. For Whole Foods its radically small, especially since the grocer's average new lifestyle natural supermarkets range from about 55,000 to 80,000 square feet.

In Western Europe, Tesco pioneered (and controls the market share) the upscale, Express convenience format. There are a few other players who've joined the market niche as well, with more considering doing so. Tesco's also taken it's creation to Eastern Europe, especially Poland, where its Express stores are doing extremely well. None though are doing quite what Natural Lawson is doing in Japan with it's combination of quality natural foods, nonfoods and health, wellness and beauty offerings.

If Natural Lawson can bring a new definition to convenience retailing in Japan--or at least add to the current definition--it could create a solid niche for itself among those its targeting--busy women and seniors who many think aren't currently being fully-served by the nation's conventional cobini. Men like natural products offerings too, even if they aren't the primary target market. And in Japan, like elsewhere, men buy lots of gifts for the women in their lives. That's another market Natural Lawson should look at.

Small-Format Grocery Retailing Memo: Stretching the Boundaries of Convenience Store Retailing; Some Say Japan's Natural Lawson is Awesome

Convenience stores are as ubiquitous in Japan as grains of white rice and packages of Ramon noodles are. There are about 40,000 combini, as convenience stores are called in Japan, in the nation, or one for every 3,200 residents.

One of the largest combini operators in Japan--in addition to market share leader Seven-Eleven Japan, Circle K Sunkus (number two) and number three FamilyMart,--is Lawson, which operates 8,400 convenience stores in all 47 of the nation's prefectures.

If the name Lawson sounds American that's because it is. The origin of the Lawson name originated in the U.S. state of Ohio in 1939. A man named J.J. Lawson started up a milk business there called Lawson's Milk, and opened a chain of store's in the state to sell his milk. The milk stores evolved into convenience-type stores and in 1959 Consolidated Foods Co. bought out Lawson.

In 1974, Consolidated Foods partnered with Japanese food retailer Daiei to open the first Lawson branded convenience store in Osaka in 1975. Daiei opened many more Lawson stores throughout the 1970's and 1980's. In 1989, Daiei merged another chain called Sun Chain which it operated in Japan, with Lawson and created Daiei Convenience stores. In 1996, the combined operation was renamed Lawson, Inc., with all the stores getting the Lawson banner.

The Lawson banner is long gone in the U.S. Its stores all became Dairy Mart convenience stores in the states over a decade ago.

The majority of the 8,400 Lawson combini (c-stores) in Japan are conventional convenience stores similar to those in the U.S. and Europe. However, Lawson also operates two other formats in Japan. The first is called Lawson Store 100, a 20-store chain which sells various items for 100 yen each. It's similar to a dollar or 99-cents store in the U.S.

Lawson's other format, and the one of interest in this piece, is called Natural Lawson. It's an upscale, high-end convenience store format positioned to serve Japanese women and the nation's seniors rather than salarymen. Salarymen are working men in Japan. Like their counterpart convenience stores in the U.S. and Europe, which traditionally target men, the majority of Japan's c-stores still do the same.

There currently are about 24 Natural Lawson small-format convenience stores in Japan, with 12 located in Tokyo. The stores' offer a broad selection of foods and other items for shoppers. The focus is on health and wellness, and increasingly on upscale, fresh prepared foods, along with natural and specialty groceries and non-foods.

Specialty foods brands line Natural Lawson's shelves and perishable cases. There's locally-grown produce, including organic, provided by a local Japanese farming collective. Organic groceries, coffee, teas and other foods and beverages are plentiful in the stores. High-end, all natural cosmetics for woman are offered for sale along with other natural health and wellness-oriented items, including those for pets.

An area Natural Lawson is moving further into is offering a diverse selection of healthy, upscale-quality fresh prepared foods, breads and related items. For example, the natural c-store retailer sells an all-natural healthier version of the popular bento lunchbox, which is a staple of Japan's working class. Basic bento boxes are sold in all of the nation's conventional convenience stores.

Natural Lawson recently entered into an alliance with NaturalBeat, which operates a chain of high-end sandwich and delicatessen stores in Japan. The stores' prepared food items are all homemade, using natural ingredients with no food additives, preservatives or artificial colors. NaturalBeat also has a subsidiary called Wholesome Co. Ltd. which produces all natural healthy fresh breads and other baked goods.

All Natural Lawson convenience stores are now selling NaturalBeat's healthy, upscale-quality prepared foods, including sandwiches, salads, entrees and other grab-and-go items. The stores also are featuring the healthy fresh breads and baked goods produced by Wholesome Co. Ltd. Fresh, prepared foods--especially all natural and upscale--are a rarity in Japan's combini, so natural Lawson is blazing a new trail in the category for convenience stores in the nation.

In addition to focusing on its product selection, Natural Lawson is taking great care in how its stores look, something that wasn't evident at all when its first stores opened in 2001.

Today's stores reflect the retailer's target market and positioning. Soft colors and natural woods are used inside the stores, appealing to the retailer's prime target shopper--women. There's no neon lighting like in Japan's typical conventional combini. Instead, soft, recessed lighting is used throughout the stores, complementing the natural woods and pastel colors. Many of the stores have a bar area where shoppers can lounge, and where trained staff members give out health, wellness and beauty tips. Additionally, Natural Lawson uses an upscale, attractive font-style and natural motif graphic for its logo on the signs outside each store, inviting shoppers to come inside.

The stores' brand--via its design, merchandising and product offerings--says Natural Lawson is the place to shop for premium, natural and healthy merchandise in a convenient format. This is still new to Japanese shoppers who are used to going to a combini to get coffee, tea, soft drinks, pastries and other basic convenience items. Conventional c-stores in Japan also are popular for offering mobile phones, fax services, ticket sales, photocopies and other similar service-type offerings.

There's a space in Japan's huge convenience store market for something other than traditional combini retailing, which is what Seven-Eleven Japan, Circle K and in the main Lawson itself does with all but its 24 Natural Lawson and 20 100 yen format stores. This is especially true when it comes to quality fresh prepared food and meals merchandising. It's nearly non-existent in the nation's c-stores. You can get a sandwich, standard bento box and other very basic grab-and-go prepared foods' items, but that's about it.

In fact, Natural Lawson is getting some competition in Japan in this yet to be proven merchandising niche of fresh prepared foods from British retailer Tesco. Tesco is opening a Japanese version of its popular and successful Tesco Express format stores in the nation that loves convenience stores. Tesco Express stores are a mix of convenience store and small supermarket, typically selling high-quality fresh foods, prepared meals and other offerings found in Tesco supermarkets but offered in convenience store-sized urban settings.

The British retailer, parent company of small-format Fresh & Easy Neighborhood Market in the U.S., is opening 25 of these Express stores to start in Japan. The stores will sell basic grocery and other items along with lots of fresh prepared foods, meal solutions and quality grab-and-go items, as well as some other fresh and specialty grocery items. Tesco already has some of its Express format stores in Thailand through its Tesco Lotus division in that country.

Meanwhile, Natural Lawson is in the process of perfecting its merchandising mix, positioning itself not only as a higher-end combini for fresh, natural and quality foods, but also as a destination for busy urban Japanese women who want quality natural health and beauty items in an attractive and comfortable setting designed with them in mind.

There's no question Japanese consumers love their combini. After all there's one convenience store for every 3,200 Japanese. In Tokyo, there's literally a combini on every corner. And a joke in Japan says the only difference in the more rural areas is that there's a combini on every other corner. To put it in perspective, the U.S. has about 24 times more land mass than Japan does--but it has only half as many 7-Eleven's.

Natural Lawson is stretching the definition of "convenience store" not only just in the c-store capital of the world Japan but internationally as well. Just as Tesco is importing its brand of "Express" convenience retailing to places like Eastern Europe, Japan and the USA, it will be interesting to see if retailers in these western countries pick up on what Natural Lawson is doing with its 24 stores in Japan and try a similar format at home, in the U.S. or Europe.

To a degree it's happening in the U.S. already. In addition to Tesco's Fresh & Easy stores, 60 of which have thus far opened in California, Arizona and Nevada, there's Trader Joe's (a somewhat similar format to Natural Lawson), Wawa, an upscale convenience store operator in the Eastern U.S. which puts a major focus on fresh prepared foods, Giant Eagle Express and a couple others.

Additionally, as we've reported, Wal-Mart plans to open it's own version (4-5 stores) of a small-format, hybrid basic grocery and fresh and specialty foods market called Marketside in the Phoenix, Arizona region this summer. Safeway Stores, Inc. also plans to open 4-5 new, small-format hybrid grocery markets in the San Francisco Bay Area as well this summer.

Further, Whole Foods Market, Inc. is in the process of opening its own upscale, all natural convenience-type store in Boulder Colorado. The store, called Whole Foods Express, will be a prototype for the supernatural foods retailer in terms of natural products retailing in a smaller, convenience-oriented format. The store will be about 14,000 square feet. In Japan that's considered a big store, especially in Tokyo. For Whole Foods its radically small, especially since the grocer's average new lifestyle natural supermarkets range from about 55,000 to 80,000 square feet.

In Western Europe, Tesco pioneered the Express convenience format. There are a few other players who've joined the market niche as well, with more considering doing so. Tesco's also taken it's Express format creation to Eastern Europe, especially Poland, where its small-format, hybrid Express stores are doing extremely well. And, of course, Tesco Express was the inspiration for the retailers small-format, combination basic grocery and fresh and specialty foods Fresh & Easy Neighborhood Market grocery stores in the U.S.

None though are doing quite what Natural Lawson is doing in Japan, with it's combination of quality natural-organic foods, non-foods and health, wellness and beauty offerings. If Natural Lawson can bring a new definition to convenience retailing in Japan--or at least add to the current definition--it could create a solid niche for itself among those its targeting--busy women and seniors who many think aren't currently being fully-served by the nation's conventional combini.

Men like natural products offerings too, even if they aren't the primary target market. And in Japan, like elsewhere, men buy lots of gifts for the women in their lives. That's another market Natural Lawson should look at.

Safeway's O' Organics Brand: Part Duex

Safeway's O' Organics in Asia: More on the brand's being on sale at Carrefour-Taiwan. The brand also is being sold by Jason's Marketplace on the Island of Taipei in Taiwan. From Taiwan its on to Japan--and elsewhere in the Asia-Pacific region--for the organic foods brand. Finally, closer to home, Central America, where Carrefour just happens to have 366 food stores, is up next for O' Organics' brand marketing travels.

On Friday, we reported that Safeway Stores, Inc. is currently selling a number of items in its popular O' Organics organic grocery products line at a Carrefour Hypermarket in Taiwan. As we wrote Friday, the international business and grocery trade press had reported last week that Safeway "plans" on selling items from the line in Asia and South America beginning next year. (read our Friday story here.) We're the only publication to date to report that O' Organics brand items are already being sold in Asia.

We've learned a few more facts: First, the Carrefour store (pictured at left) where the O' Organics items are being sold is on the island of Taipei, in Taiwan. It's a huge Hypermarket.

Additionally, Rachel Lanning who lives and works on Taipei, told us the Carrefour store is adding new O' Organics brand items regularly. "Just yesterday, I spotted O' Organics macaroni and cheese," she told us. A clerk at the store told us via telephone that the items are doing well thus far, and that the store is indeed adding new skus on a regular basis as shelf-space is made available.

All Taiwan-region Carrefour stores to sell O' Organics brand

Carrefour has about 48 stores in and around Tawian. We've learned that all of these stores are either currently selling--or will be doing so shortly--O' Organics brand grocery products. The stores' are adding additional skus as space (and merchandising plans) permit.

Carrefour Asia is a great international brand launching pad for O' Organics

Carrefour, Europe's largest retailer, and the second largest retailer in the world after Wal-Mart, currently has about 223 Hypermarkets (huge stores that sell food along with hard and soft goods) in Asia. The French retailer has 100 stores in China, 48 in Taiwan, 30 in Indonesia, 25 in Thailand, 11 in Malaysia, 7 in Japan, and 2 in Singapore. Asia is a fast-track grow region for Carrefour as well.

This base of 223 Hypermarts in Asia provides the O' Organics brand with a huge Asian launching pad. Include Japan, and eventually China, the worlds most populated nation, and fasting growing economically, and it's apparent the Asian continent offers great opportunities internationally to grow brand sales.

Wellcome's Jason's Marketplace on Taipei also selling O' Organics brand items

Ms. Lanning also told us Jason's Marketplace, which is an upscale format from Hong Kong-based Wellcome, is currently selling O' Organics brand grocery products in it's Taipei store. We verified this, and the store is merchandising a number of items from the organic brand. Among the items in the O' Organics line Jason's Marketplace is selling include cereals, juices, peanut butter, noodles and other packaged goods.

Wellcome is Hong Kong's largest and oldest supermarket and hard goods chain. The chain currently has 235 stores in the island region. Jason's Marketplace is the grocer's newest format, and is designed to appeal to the specialty and natural foods consumer in the region. As in the West, natural, organic and specialty foods are chief among the many food product demands for a increasing number of consumers in Asia, especially in developed and generally prosperous countries like Taiwan, as well as in Hong Kong, Japan, South Korea and increasingly in China.

Japan next on-tap for O' Organics brand

We've also learned from a source, an international grocery products trader, that the O' Organics brand will be introduced in retail foods stores in Japan soon. American grocery product brands do well in Japan, and the country has a huge network of supermarkets and convenience stores like 7-Eleven Japan and Lawson.

In fact, Lawson, which is the second largest Japanese convenience chain after 7-Eleven-Japan, has a format called Natural Lawson, which features an extensive selection of natural and organic foods and grocery products. (Think of it as a mini Whole Foods.) Natural Lawson is positioning itself to the growing number of Japanese consumers who want natural and organic foods. (Read our recent piece about Natural Lawson here.) The upscale, convenience-oriented chain currently has about 20 stores--and is growing. It would be a "natural" retail outlet for the O' Organics brand. In addition to the 20 Natural Lawson stores, Lawson operates 8,400 traditional-style cobini (convenience stores) in Japan.

Carrefour and the Central American leg for the O' Organics brand

In it's announcement last week about taking the O' Organics brand international, and selling the line to other retailers, Safeway CEO Steve Burd mentioned two regions: Asia and Central America. Carrefour just happens to operate about 366 stores that sell food and grocery products in Central and Latin America. The retailer has 237 Hypermarkets and 129 supermarkets in the region. All but 36 of these stores are in Brazil and Argentina, countries with enough consumers with good incomes to provide a nice market for the brand. The remaining 36 stores are in Columbia (35) the Dominican Republic (1 store.)

Obviously, with a deal done with Carrefour in Asia, it's a logical conclusion there just might be a similar deal for Central and Latin America with the mega-French retailer.

Smart marketing to take O' Organics to Asia and Central America first

Lastly, we believe it's extremely smart marketing to introduce the O' Organics brand internationally first in Asia and Central America. Most organic product's brand marketers looking internationally for sales, tend to usually look--and go--first to Europe because of the region's strong base of natural and organic foods consumers. However, European food retailers are expert at creating store brand natural, organic and specialty foods brands, and going head-to-head against their brands makes little sense for O' Organics at this point in time, if ever.

Rather, Asia and Central America offer a market where their aren't many full-line organic grocery brands. Although it's nothing like Europe in terms of overall sales potential, it's an emerging and growing organic foods market--and those who get their first will have an advantage.

Retail Innovation Memo - Breaking News: Hybird Natural Grocery-Convenience Store Locali Conscious Convenience Opens Tomorrow In Hollywood, CA USA

Locali Conscious Convenience, the first unit of the small-format, "green" natural and locally-focused hybrid grocery-convenience stores of what retailing entrepreneurs Melissa Rosen and husband Greg Horos hope to soon grow into a chain, opens tomorrow (Thursday, January 22) at 5825 Franklin Avenue in Hollywood, California, co-founder and co-partner Melissa Rosen tells Natural~Specialty Foods Memo (NSFM).

We first reported on and wrote about the new, innovative format and store's development in this September, 2008 story [Small-Format Food Retailing Memo: The 'Eco-Convenience' Hybrid Store Trend Continues to Emerge: 'Locali Conscious Convenience' to Open First Store].

The retailing entrepreneurs had originally planned to open the store in late fall of 2008. However in December, 2008 they decided to wait until the first of the year to open the market, which puts a major emphasis on selling natural, organic and locally-produced convenience-oriented food and grocery items across multiple categories, because they wanted to time the opening with the start of the new year. "A new year, a fresh start, a new, fresh concept," is how co-owner Melissa Rosen described the choice of a January, 2009 opening.

The small-format, eco-grocery and convenience market is only about 1,000 square feet. However the retailers are packing a wide-assortment of natural and organic products into the space. The market is designed to be super-convenient yet extremely "green" in terms of its design and approach to convenience retailing. It's a neighborhood convenience market, designed to serve local neighborhoods and to promote and sell locally-produced products, although it will sell some non-local items as well.

"Our goal is to build a chain similar to 7-11, but on a smaller, sustainable scale," Melissa Rosen says.

"We would like to bring our healthy, fun and delicious food and beverages, eco-friendly home and lifestyle products, and outstanding/reasonably priced organic, biodynamic and sustainable wines, beers and sake to a diverse array of communities across the country. Our stores will continue to built in an eco and energy efficient manner and will vary in interior only with regards to the reclaimed wood used in the build out. While it is Douglas Fir for our first Southern California store, other locations will be furnished with reclaimed version of their own native woods."

"While other environmentally friendly convenience store/fuel stations like The Green Spot Market are pursuing a wonderful concept of making convenience stories healthier by selling organic and natural foods, our concept is different. Instead of making convenience stores more healthy, we want to make a healthy and eco-friendly lifestyle more convenient to pursue," Rosen added in response to a question about what in our analysis is a small but growing trend towards eco-convenience stores, which we wrote about in our September 11, 2008 story.

"This begins with our offering of consumer compost recycling and reverse osmosis filtered water for reusable bottle fill up. No petroleum based plastic bottled water will be for sale in our store," Rosen says.

"It also includes selling practical and affordable eco-friendly household items and gadgets that aid in individual conservation. In an ideal world, it would be lovely if we could all sit down for a two hour slow food organic meal daily, but our daily realities are usually far different. Locali acknowledges and embraces the need for fast foods in our increasingly harried (and budget tightening) world. To that end, we will offer an array of pre-packed healthy meals from local food artisans and restaurants, unique glass bottled juices and beverages, and a small array of kitchen staples including organic rice milk, cage-free eggs, seasonal produce, grains, olive oils and more."

In addition, Melissa Rosen says Locali Conscious Convenience will offer vegan and dairy homestead cheeses, crackers and spreads, natural snacks (popcorn, chips, nutritional bars, trail mix, etc.) and a selection of fresh, prepared soups, deli salads and sandwiches, and other ready-to-eat prepared foods.

"In the mornings, we will serve high-fiber muffins, cold and hot cereals, toast, hard boiled eggs and gluten-free bagels and muffins. We will serve fair trade organic coffee and wild harvested yerba mate throughout the day. In terms of wine, beer and sake, we will favor domestic organic, sustainable and biodynamic brands. In terms of the microbrews, they will be altering seasonally and you will be able to create your own pack based on taste," Rosen says in describing additional merchandising aspects of the the hybrid, convenience-oriented eco-market.

Melissa Rosen says she plans to involve the store, and future stores, in a wide-variety of community-based activities. "Another aspect (of the retailer's plans) that will be interesting is to see the (community) response to the litany of community initiatives we are planning," she says. "We're planning to have regular workshops on wellness, environmental and sustainability concerns. Our vendor sponsors are extremely excited about these plans because it will offer them a greater connection to the consumer than say through "the sample lady route".

Tomorrow's opening of the Hollywood store will be a soft opening, Rosen says. The retailer's contractors are still completing some last minute touches to the store. However, according to Rosen, the owners wanted to get the store open with the soft opening despite these minor contractor completion issues because they are excited to kick the store off in the first month of the new year. The new year, fresh start, new store concept focus we mentioned earlier.

The husband and wife retailing team are working with commercial real estate giant Cushman & Wakefield in a strategic process in which they are lining up additional store sites, first in Southern California, for future Locali Conscious Convenience store locations. The main focus right now though is to get the Hollywood store up and running and to build the business there first. Rosen says. Plans call for both future company-owned stores, as well as franchising to independent owners, Rosen says.

"Strategically we are completely focused on the first store. But we are working with Cushman & Wakefield on expansion plans. Alisi Mataele of Cushman & Wakefield is our guardian angel. She found us the amazing and affordable location for our first store and she introduced us to Leslie Mayer, Executive Director of Retail Services at Cushman & Wakefield. They have been extremely generous with advice as we approach our opening on Franklin Avenue in Hollywood," Rosen says.

In developing its format and opening the first store tomorrow, Locali Conscious Convenience is building on a number of recent and current trends in food and grocery retailing. Those trends include more small-format stores, more hybridization between the conventional C-store and grocery store retailing formats ( more blending of the two), increased focus on neighborhood-oriented retailing, added retailer and consumer focus on locally-produced products and on shopping with retailers that offer such local products, the "green" movement, and a decade long trend towards more healthy natural and organic foods.

It will be key however for Locali Conscious Convenience to offer the food and grocery items, including the fresh, prepared foods offerings, it sells in its first store, as well as in future stores, at affordable prices. In this severe recession even committed natural foods consumers are trading down, looking for the value.

Shoppers will pay more in good times for convenience and "green" and healthy attributes and products. However, right now the premium most shoppers are willing to pay at stores that offer these attributes is a small one. If Locali Conscious Convenience can combine its innovation at the Hollywood store with offering affordable prices, which co-founder Melissa Rosen tells us is a key strategic focus for the retailer, we think its chances of succeeding are fairly high.

Additionally, the hybrid grocery-convenience eco-store concept should play well in Hollywood. The city's young and hip -- and in many cases "green" -- residents should form a solid base for Locali Conscious Convenience. The Hollywood Locali Conscious Convenience store opens tomorrow morning, according to Rosen. Since it is a soft opening tomorrow there won't be a grand opening celebration. However, plans call for one soon.

Store Address:
Locali Conscious Convenience
5825 Franklin Avenue
Los Angeles, CA 90068
310-779-3439

Website:
http://www.localiyours.com/

NSFM Reader Resource

Related stories from Natural~Specialty Foods Memo (NSFM):

~Small-Format Food Retailing Memo: The 'Eco-Convenience' Hybrid Store Trend Continues to Emerge: 'Locali Conscious Convenience' to Open First Store

~Retail Innovation Memo: The 'Econvenience Store' Will Be the Next New Thing, and is A Convenience Store Industry Green Retailing Trend in the Making

~Small-Format Food Retailing Memo: Savannah, Georgia USA's Parker's Convenience Stores: Taking Hybrid Convenience-Grocery Retailing to Upscale Heights

~Small-Format Food Retailing Memo: Giant Food Stores To Open its First Small-Format, Hybrid Convenience-Grocery Store: 'Giant To Go'

~Small-Format Grocery Retailing Memo: Stretching the Boundaries of Convenience Store Retailing; Some Say Japan's Natural Lawson is Awesome