CSN EXCLUSIVE: Inside the Launch of Kudos Convenience Stores
HOUSTON — Starting a new business is always a risky venture, especially in retail. In fact, according to the U.S. Bureau of Labor Statistics, about 45% of all new businesses on average fail within the first five years.
Though to be fair, most of those ventures don't have the backing of a 2,000-member regional association to support them.
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The Greater Houston Retailers Cooperative Association (GHRA) has been around for a quarter century and primarily served as an umbrella organization for smaller convenience store brands, allowing them to buy goods at bulk prices and take advantage of continuing education. Last year, the organization decided to enter into a new specialty: direct retail.
In September, GHRA opened its first Kudos convenience store, a new-to-market brand that's focused on both serving customers in the southeast Texas region and supporting local community nonprofits and first responders.
While the move might seem surprising in the wake of so much upheaval in retail over the past few years, it's precisely because of that changing market that GHRA decided to make its move now, according to Jeffery Reeder, the association's vice president of retail.
"[Our] volunteer board of directors, all independent owners of member convenience stores, along with staff leaders, recognized the evolving … retail landscape and consumer behaviors in recent years," he told Convenience Store News. "In response to the needs of GHRA members, [GHRA leadership] sought options to help them effectively compete with larger corporate convenience retail brands in the marketplace."
The Kudos brand is designed specifically to enable c-store operators who own only one or a few stores to easily access a licensing agreement, along with the support of GHRA's wider net of resources. The branding can be used to either convert an existing site or launch a new build, and comes with a host of wider materials such as marketing promotions, signage and store-specific planograms.
Above all, the brand is designed to be flexible.
A True Partnership
The Kudos concept is adaptable to a number of different location sizes and building designs, according to Reeder.
The first location to open was an existing travel center and truck stop in Huntsville, Texas. The store, including the kitchen area, is approximately 7,100 square feet and features 10 multiple product dispensers (MPDs), as well as high-flow diesel. The second Kudos location will be approximately 8,500 square feet and feature five MPDs.
The consistency across sites will lie more in the branding and a baseline of quality, with some basic requirements needed from licensees with existing locations, such as space for a 12-head multibrand soda fountain and room for a bean-to-cup coffee station.
Other offerings, however, like a store's previous foodservice items or an existing fuel contract can remain alongside the new Kudos branded goods.
Community support is an integral part of the Kudos brand. The grand opening of the Huntsville store included not only the usual one-time donation to a local organization — in this case, the Sam Houston State University Rodeo — but also a direct grant to the Houston Food Bank.
Reeder explained that each individual Kudos store will engage with their local communities based on "who their customers and neighbors are and what their communities need." The engagement will be ongoing, such as the Huntsville store's new partnership with the H.E.A.R.T.S. Veterans Museum of Texas.
Future Growth
According to Reeder, the customer response so far to Kudos has been positive, with guests praising the inaugural store's friendly staff and clean restrooms. Customer intercepts also showed good feedback on Kudos-specific items, including its chicken and Tex-Mex food options.
With that solid foundation in place, GHRA is laying out an ambitious growth plan for the brand. Since much of the growth can be driven by rebranding rather than relying on new construction, the organization is looking to launch 250 stores within the next several years.
"Initially, our focus is on the greater Houston and southeast Texas regions, where our GHRA members operate their businesses and where we have a state-of-the-art regional warehouse and distribution organization to support brand execution," said Reeder. "We remain open to the possibility of expanding the Kudos brand beyond, provided there is similar market interest and the infrastructure can be established or built to support the brand."
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The second Kudos location in New Caney, Texas, will be opening in early 2024 as a new build. It will incorporate some additional elements beyond what the Huntsville store offers, such as an onsite kitchen that will prepare made-from-scratch meals and sandwiches, alongside a menu from GHRA's other brand, Big Madre Tacos y Tortas.
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