Aisles Abroad: A Canadian franchise chain rapidly growing self-service markets

Aisles Abroad is a regular feature that examines notable grocery initiatives outside the US

Picture a condo building with a small self-service store inside that sells food and convenience items 24 hours a day for tenants.

That concept is being made a reality by the burgeoning Canadian cashierless chain Aisle 24, which is capitalizing on the opportunity to convert underutilized space in residential buildings into markets that serve as a cross between a small-format grocery and convenience store. Customers use the Aisle 24 app to access the store and then use in-store kiosks to pay.

Last year, Aisle 24 added another format that uses traditional ground-floor retail spaces that are accessible to the public.

The company’s target demographics are Gen Z and millennials customers who want to shop quickly.

“Saving their time is important to them. … Get in, get out, get on with your day — that’s what we’re about,” said co-founder and CEO John Douangnoting that customers will often complete their visits within minutes.

While some grocers like the “Wegmans of the world” are leaning into the “theater of foodservice” and experiential shopping, on the other end of the spectrum are stores like Aisle 24 embracing functionality with self-service and quick trips, said Stewart Samuel, global insight leader for IGD.

The unmanned, 24-hour model provides both convenience to consumers and a fix for retailers grappling with major labor challenges, Samuel said.

Aisle 24’s self-service stores are popping up in Toronto and other major cities in Ontario and Quebec, and the startup is eyeing expansion into the US

“Toronto is a perfect place to start [Aisle 24] because of the residential density. There’s a lot of high rises here, much like New York, so it made a lot of sense,” Douang said.

Currently, Aisle 24 has more than a dozen locations open and roughly a dozen more under construction with a queue of 96 locations across Canada, according to Douang. A US debut is on the company’s roadmap, he said.

As Aisle 24 eyes expansion into the US, here’s a look at how the chain operates its stores and the ways that it’s innovating its model at a time when the lines are blurring between grocery, restaurant and convenience offerings.

A sign for Aisle 24 inside of a store.

The interior of an Aisle 24 store.

Permission granted by Aisle 24

Building on c-store, tech experience

Brothers John and Josh Douang and Marie Yong, John’s wife, founded Aisle 24 in 2015, spurred by what John Douang said was a personal need to quickly get items, like cream for coffee, while living in a condo in his 20s.

Aisle 24’s concept also ties back to their upbringing: The Douangs are sons of a family that owned a convenience store in Toronto, which provided lessons on how to run a small business, Douang said.

Isolate 24 offers two store formats. Its Resident Markets occupy space within residential buildings, typically ranging from 300 to 900 square feet, while its Community Markets are designed for standard commercial real estate, spanning 1,000 to 1,800 square feet.

The locations within residential buildings can vary depending on where there’s available space, such as the main level, basement or amenity area. The Community Markets format, which was launched in June 2021, typically occupies traditional ground-floor retail space and provides more visibility to walk-by and drive-by traffic.

“We do see that the Community format is the future of Aisle 24. The Resident format is great, but it’s really supplementary,” Douang said, adding that the company is targeting the Community Market format to higher-density areas.

Interior of a grocery/convenience store.

Aisle 24 carries a variety of grocery and convenience items.

Permission granted by Aisle 24

Aisle 24’s stores carry standard grocery offerings, like meat, pasta and produce, and do not carry age-restricted items, like alcohol, since there are no front-end employees to verify the purchase. Roughly 10%-15% of each store’s assortment is crafted to meet its customer demographic, Douang said: “We do some statistical research and determine what age range, what’s the median income, what’s the ethnic background, and then we’ll craft some of the products.”

For example, a store in Toronto’s Liberty Village neighborhood with a strong consumer base of Gen Z and millennials shoppers influenced the decision to more local brands.

The change was successful— “It did amazingly well and now this store is our top-performing store” — and is now prompting Aisle 24 to roll out more local and small brands across its store fleet, Douang noted.

To boost consumer engagement, Aisle 24 is working on customized promotions based on past purchase history to create a more personalized experience, Douang said.

Digital kiosks inside a store.

Isolate 24 customers can pay using digital kiosks.

Permission granted by Aisle 24

Operating a store that’s always open

Aisle 24’s model relies on franchise operators who travel between stores, spending a few hours at each one at least three times a week for cleaning and stock replenishment. Some of the busy stores have operators on-site every day for a few hours. The founders wanted to avoid creating a business where operators would have to work 14-hour days and close the store in order to take a vacation.

“When we developed the concept, it was very key for us to create a process whereby the operator doesn’t need to be there all the time,” Douang said.

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