An Accidental Convenience Store

Seven years ago, John Jacobs and his sister Adrianna Jacobs set out to fill the void in New York metropolitan shopping malls when CVS drugstores began pulling out. In a clear example of channel blurring, the partners soon found themselves evolving their business into a convenience store concept catering to mall employees.

“We never planned to do convenience stores,” said John, who previously ran a chain of cell phone stores in shopping malls. “The No. 1 complaint our employees had was they couldn’t find decent food in the mall that was reasonably priced. They couldn’t find snacks in the mall. They couldn’t find essentials they needed and most of them worked in the mall four or five days a week.”

The original idea behind Metro Mart, he said, was to model the business after the CVS concept. According to John, many of the drugstores were pulling out of their mall sites because the company wanted stores that could include drive-thru pharmacies.

“That’s how Metro Mart started, as a mini-CVS concept. But very quickly we realized we were selling a lot of drinks, a lot of snacks and some essentials. [And] people weren’t buying detergents, or much makeup or skin care or oral care,” he recalled. “We realized we needed to change the whole concept. We did most of our sales around snacks and drinks, so [we said] let’s put more emphasis on those items.”

And so began the journey of Metro Mart. The first store opened in Roosevelt Field Mall in Garden City, N.Y. However, it was by no means an immediate success. Metro Mart opened in a basement store and saw zero traffic in the beginning.

“It was difficult trying to figure out how to get people downstairs. I had a conversation with a vendor who said to me: ‘You know John, you are not putting enough emphasis on food. You sell food, people will come. Get graphics, promotions on food,’” he recounted. “As we started selling food, we started to see more and more people come in.”

The chain currently operates four convenience stores. Its other three locations are at Smith Haven Mall in Lake Grove, N.Y., The Mills at Jersey Gardens (formerly known as Jersey Gardens Mall) in Elizabeth, N.J., and Staten Island Mall in Staten Island, N.Y.

Of the four c-stores, The Mills at Jersey Gardens location is the most successful and more than half of its business comes from the mall employees. “We’ve nailed it there. We have exactly what people want. We’re priced right and the size is right,” John said.

A TAILORED APPROACH

“Nailing it” at one location, though, is not a recipe for success at every location. One of the biggest challenges has been trying to figure out the demographics of each mall and what products move well there.

The business partners now tailor each store to the market demographics, Adrianna noted. For example, The Mills at Jersey Gardens Metro Mart sells a lot of hot dogs and chicken, while the Roosevelt Field Mall and Staten Island Mall locations share similar demographics and a similar menu: healthier options, such as salads.

“We opened the Staten Island store in October 2013. We spent a month getting to know [Staten] Island. We spared no expense on this store. We got the best lighting. We didn’t cut any costs. Everything we did was the best equipment and then, we couldn’t sell food. We started selling hot dogs and hot foods typically found in convenience stores. We couldn’t sell 10 hot dogs a day. In our other stores, we can sell 300 hot dogs,” John said. “[We learned that the people there] wanted something healthy.”

Another challenge Metro Mart has had to overcome is competing against the food courts in the malls, which are typically known for high prices and a lack of healthy food.

“We want to take that model and turn it upside down. We want to sell healthy food as much as we can, to the extent the market allows us to, and be price conscious,” John said. “We also do loyalty programs and discounts for mall employees. The POS [point-of-sale] system tracks their purchases. We are very focused on making sure the mall employees come in every day.”

Keeping with the emphasis on healthy — something John and Adrianna embrace themselves — Metro Mart does not sell cigarettes (by choice) or beer (not allowed) at any of its locations.

“We want to have a healthy image. It makes business sense for us. I don’t think you can sell cigarettes [and] then next to it you have a salad. They just don’t go together,” John said. “You have to make a decision on who you want to be. It may hurt sales in the beginning, but image is important to us.”

Although the business partners did not start out with the intention of becoming convenience store operators, they have jumped in with both feet. Not only have they done their homework on the markets they’ve entered, but they have done their homework on the industry as well.

“Most convenience stores are mom-and-pop stores. The owner works in the store. They don’t have the time to go to all the [industry trade] shows,” Adrianna said. “We are different. We go everywhere, we talk to everyone. We are very proactive.”

This openness may lead to some new possibilities for the future of Metro Mart.

“We’ve been in the business now for seven years and I’ve probably been in hundreds of convenience stores. Wawa, Sheetz, QuikTrip and QuickChek,” John added. “We’ve learned so much in this business. We can even take our Metro Mart concept and partner up with an oil retailer. It could be on the street. I don’t think we want to limit ourselves to just malls.”

The brother-sister team said they would love to partner up with someone who feels they know how to do petroleum well, but don’t really know how to pick the right coffee or how to sell food. “Food is probably the best driver in this business right now,” said John.

Food, he added, is where c-stores have a phenomenal opportunity to grow. “It’s easy to see it because you see the success that chains like Sheetz and Wawa and QuikTrip have. When you go there, you know it can be done.”