Global Convenience Store Focus; 27/07/21

If foodservice and grocery retail is all about theatre and experience, then a visit to Dom’s Kitchen & Market is a must in Chicago when the NACS Show heads there in October.

Opened in a neighbourhood location in June, this new 17,800sq ft store concept is putting on a spectacular show that melds a fresh foods market format with a premium QSR offering.

What’s all the more remarkable is that Dom’s Kitchen & Market was planned during the pandemic and 90% of the work was done over Zoom and Teams – the retailer only met with the designers on one occasion prior to launch.

However, there is a seasoned and experienced team behind Dom’s Kitchen & Market comprising three co-founders: Don Fitzgerald, Bob Mariano and Jay Owen; and topped off by consulting and IT services provided by McMillanDoolittle LLP.

Fitzgerald is a retail veteran in the Chicago area, who had a career with Dominick’s Finer Foods and, prior to the latest venture, spent 11 years at Roundy’s supermarkets in Wisconsin managing two legacy brands, Pick ’n Save and Copps.

Along with Mariano, who also previously worked at Dominick’s, Fitzgerald launched the Mariano’s brand at Roundy’s in 2010. Roundy’s was subsequently sold to Kroger in 2017. Fitzgerald is also a professor in the marketing department at DePaul University, where he is executive in residence along with Dom Capital.

Principal at Dom Capital is Owen, who is also the great grandson of Dominick’s founder; creating a neat convergence of talent among the trio.

Future of B&M retail

Pre-pandemic, the three founders had been considering the future of bricks and mortar retail, as CPGs were rapidly moving online and towards Amazon in particular.

“We didn’t have the foresight of the pandemic when we started and what happened with traditional grocers getting incredible sales month after month,” Fitzgerald recalls. “That was not something we saw but rather the erosion of brick and mortar retail to online.”

The Covid curve ball also helped to inform their thinking about the retail offer, however. Open hot food bars and self service salad bars were no go zones in the ‘new normal’ and the business, which won funding in May 2020, set about building the operation online. As well as home sampling different cuts of meat and varieties of wine, it set about hiring a team.

“When we started this, we had four or five original members and we built a team of 12-14 people around us but we did it all virtually,” Fitzgerald smiles.

Kitchen and culinary focus

The ordering of the store branding ‘Kitchen & Market’ is completely deliberate. The retailer wanted to distance itself from ‘Grocerant’ type terminology, Fitzgerald says.

Instead, the concept leads with foodservice and, rather than compete with the likes of Whole Foods Market, is on a par with restaurants.

For Fitzgerald and his co-founders, ‘Kitchen’ is more about discovery and creation. “Kitchen gives you a warm feeling,” he says, “so the format is more about meals and ingredients and a culinary experience versus a functional market,” he explains.

As such the Kitchen elements take centre stage in the store’s layout, which is a change from the original concept put forward by the first design firm charged with the brief.

According to Fitzgerald, their approach bifurcated the store with Market on the right and Kitchen on the left.

“The heart and soul of Dom’s is the Kitchen and the layout then fans out towards cooks’ ingredients and pantry items plus wine that pairs well with food and we have the same meat in the kitchen that we have in the protein department. The heartbeat is the Kitchen and then we push the culinary experience out to the perishable perimeter,” he says.

The Kitchen offer features five individually zoned areas:

  • The Hearth: offering Bonci pizza and rotisserie meats
  • The Stackup: serving sandwiches
  • Plant Butcher: featuring made-to-order salads
  • Gohan: selling sushi, Asian rice bows, and katsu sandwiches
  • The Brew: a coffeeshop and wine bar with cocktails

Strong, local brands

The Market element of the store – around 20% of the offer is packaged grocery including BWS – is a curated assortment focused on specialty, natural and organic ingredients and products with an element of interest and discovery. Fitzgerald reports the brand has purposely stayed away from price sensitive CPGs such as Tide, Cheerios and Corn Flakes, which are better fulfilled online or at mass merchants.

In line with the experiential feel of the store, there’s a chef’s table, where guest chefs will host recipe demonstrations and educational sessions. The area will also be used for the retailer’s own in-house R&D and possibly pop-up restaurants too, Fitzgerald says.

Dom’s Kitchen & Market is also home to a number of strong local brands including Molly’s Cup Cakes, Stan’s Donuts, Bonci Pizza and Linz Meats.

Many of these suppliers, which are typically foodservice focused or small shops dependent upon traffic in the city, have been impacted by Covid and have been eager to find fresh and compatible avenues for their wares.

Customer response

The customer reaction since opening has been very positive, Fitzgerald reports. Shoppers are discovering how to ‘use the store’, he says.

With seating for around 80-90 indoors and out, many are using the format to socialise; visiting for a coffee, wine or pizza and less for full shops. But they are gradually beginning to fill more of their basket.

“It’s not unusual for us that folks will come and check you out and learn the store,” Fitzgerald says. “We have great lunch and dinner rushes but the other part of the proposition is to come in for a meal to take away or enjoy in a seating space or to buy the fresh salmon, asparagus and wine and cheese and do it yourself and that third scenario is starting to take hold.”

The store’s location, away from the city centre Loop, has been advantageous, Fitzgerald adds. The neighbourhood store attracts local residents, who are still largely working from home.

The smaller footprint is another bonus and gives Dom’s Kitchen & Market more real estate opportunity to expand than if it were a larger format store.

The business is on record stating it plans to open 20-25 new stores in the next five to seven years in the Chicago area and beyond and is in “hot pursuit” of the second location, Fitzgerald says.

The model will continue to be honed and refined but the format is pitched to a have a broad appeal.

“It’s not as premium priced as the decor would have you believe,” Fitzgerald says. “We index against the major grocers and across a portfolio of items we are fairly priced. We are not as inexpensive as the mass merchants but we offer more of an experience. In the kitchen area, we price against quality QSR restaurants and we are very competitive,” he says.

New tech and digital ambitions

As a start-up, Dom’s Kitchen & Market has required all new systems and tech and it has collaborated with McMillanDoolittle LLP on IT support and strategy including digital.

Mindful of those pre-pandemic trends to online, work is already afoot to build a digital presence.

“We’ve really viewed the store as the hub that will build out our digital experience,” Fitzgerald reports.

“We intend to have the entire Kitchen available for online and order pick up from the store by the end of the summer,” he says.

The Brew coffee shop will be tested online at the end of July, as part of a ‘crawl, walk, run’ approach to digitalisation and ensure processes are right inside the store in the first instance.

Online delivery is also on the cards but for 2022. “We understand the opportunity there but it’s tough to have a consistent experience of your brand with your own employees but even harder if you turn to someone else and put your reputation in their hands,” Fitzgerald maintains.

Similarly with in-store technology, kiosks for in-store ordering and self checkout units are on ‘stand by’ and will help speed some customers’ journeys. But for now the focus is on full service.

“We wanted to have that experience and interaction with the customer and provide a friendly face that can help you and tell you about Dom’s,” Fitzgerald says.

That team is all suitably attired, whether in the Kitchen wearing a chef’s jacket, jean apron and cap or in the Market in black slacks, black shirt, jean apron and cap; and is intended to be more foodie and European versus US in styling.

Resurgence in food away from home

The opening of Dom’s Kitchen & Market seems timely. Chicago lifted its own restrictions shortly after the store’s opening and Fitzgerald reports pre-pandemic activities are beginning to resume including concerts, stadia, tourism and hotels.
“Once things reopen people are very eager to go back to restaurants and they are seeking out experiences,” says Amanda Lai, senior manager at McMillanDoolittle LLP, who has worked extensively with Fitzgerald in the US and further afield.

“Dom’s Kitchen & Market provides that experience – it engages with the consumer and offers restaurant quality food and education,” she says.

The challenge for traditional grocers will be to retain some of those new behaviours caused by the pandemic – purchasing more groceries and trading up.

Lai anticipates the grocers will begin aggressively promoting traditional items but will be challenged. “When it comes to commodities, Amazon can sell it faster and Walmart can sell it cheaper,” she says.

But as food away from home is tipped to outpace food at home in the US market by the end of 2021, the future looks bright for Dom’s Kitchen & Market. Very bright indeed.

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