Dive Brief:

• Main Street Market, a grocery store offering 24-hour access to members who pay a $75 annual fee, opened earlier this month in Evansville, Minnesota, according to the Park Rapids Enterprise. 
• Members can access the store using a store app or key fob and pay for their groceries on their phone or using the store’s self-checkout machine. Main Street Market is also open to the public with staffed checkout three days a week.
• It’s the second store in the state to operate an unmanned model open 24 hours, and it could offer a way for small-town grocers to offer convenient access and operate with low overhead.

Dive Insight:

Main Street Market is not Amazon Go by any stretch. But it follows the same principles of offering convenient access and self-service.

The lower-tech approach is also much less costly to operate. Instead of computer-vision cameras, the store lets shoppers scan items and pay with their phones, or use a self-checkout terminal. Main Street Market offers a selection of mostly conventional goods, including soda, frozen pizza, cold cuts, snacks and sports drinks.  

One obvious potential problem is theft. The store has security cameras in place to monitor the aisles, but owner Alex Ostenson said the business mostly relies on the honor system to ensure customers pay for all the items they select. He said he has the ability to disable an account from his phone at any time.

“If people buy a year membership for $75, would they really risk losing it by stealing?” he told the Enterprise. “We know who is coming and going as each person has a unique access code.”

The membership model could be a sticking point for shoppers not used to paying upfront just to access a food store. Main Street Market plans to offer flexible plans, including a three-month trial membership for $30 and a six-month plan for $50, Ostenson said in a video posted to the store’s Facebook page. The market charges an additional $5 per household member who plans on accessing the store via the membership. 

For inspiration, Main Street Market turned to another small-town grocer in the state, Farmhouse Market, which for several years has operated its own unattended shop. That store, located in the town of New Prague, is focused more on local and natural foods and offers 24/7 access to store members for $99 a year.

Unattended retail has taken off in the form of high-tech urban stores and kiosks. Choice Market, which operates four stores in the Denver area, plans to eventually offer 24/7 access at its flagship location, which sits on the ground floor of a residential building, founder Mike Fogarty recently said. Valet Market, a self-service store concept developed by Accel Robotics, recently opened its first location inside a luxury high-rise building in San Diego. 

The model could also work in small towns with a more analog approach that emphasizes community connections. Independent grocers have struggled to remain competitive with large retailers on pricing, e-commerce and assortment, causing many to go out of business. But operators will have to address challenges like replenishing out-of-stock items, managing fresh products and controlling shrink levels — all of which can be difficult to do without having workers on-site.  

Small-town grocers also face the challenge of dollar stores’ rapid growth and expansion into groceries. Dollar General, for one, is building more than a thousand stores per year, placing many in small towns and offering more perishable goods and frozen foods in its stores.