Co-founder and CEO Jake MacDougall (Photos: Jaime Hogge)
One of the most common effects of the pandemic has been brick-and-mortar food stores moving into online delivery so they can meet increased consumer demand for convenience and safety. But Runner Market’s co-founder and CEO Jake MacDougall took the opposite approach.
MacDougall opened Runner Market in spring 2021, during the height of the pandemic. Specializing in what he calls “curated convenience,” the hybrid QSR/ convenience store grew out of Runner, an alcohol delivery service that has amassed a significant customer base since launching in 2017.
Like many new business start-ups, Runner Market was informed and shaped by consumer demand. In this case, Runner’s online customers started regularly requesting convenience items to be included with their alcohol order.
That led McDougall and his business partner to establish what he describes as strategically located “micro-inventories” of certain products in the vicinity of the LCBO stores where they would go to fulfill customers’ orders.
Runner saw a sharp uptake in business when the pandemic hit, with revenues for its alcohol delivery business growing 185% year-over-year in 2020, on the heels of a 100% increase in 2019. The two partners took the extra proceeds and used them to open the 760-sq.-ft store at 141 Berkeley St. in Toronto’s east end with an eye towards creating something that went beyond the standard convenience offering.
“We started thinking about a brick-and-mortar location because we were wondering why there weren’t any high-quality convenience stores,” explains MacDougall. “I think customers are looking for alternatives to the Cokes and smokes-type products carried at [traditional convenience stores] and we see huge demand for healthier alternatives. People also like the narrative around local products, so that’s been a very positive thing for us.”
Located inside a former Mexican restaurant, Runner Market features an eight-person patio and inside seating for 12 once pandemic restrictions are eased. The principals used their background in design to conceive the clean, minimalist store, while its emphasis on quality local products was inspired in part by the Amsterdam retailer Stach.
The partners also worked closely with contractors to keep build costs under $300,000, and while it’s still early days, MacDougall says customer reaction to the store and its product assortment suggests it was money well spent. “After opening this location, the demand and the sentiment we see people leaving with is extremely positive,” he says. “I don’t typically leave a store and say, ‘Oh God, this place is so cool’ out loud to my friend, but that’s a very common thing for us.”
The partners also worked hard to bring together a product assortment that would typically require customers to visit multiple stores. The emphasis, says MacDougall, is on “high-quality products from local vendors that are doing interesting and unique things.”
That means Runner Market’s shelves are stocked with items from both Toronto and Canadian companies, including the Toronto coffee roaster De Mello; the Vancouver-based peanut butter brand Mumgry; and the specialty salt brand Salt Spring Sea Salt, which pairs French culinary tradition with sea salt to create fleur de sel with flavours including Blackberry, Balsamic and Pinot Noir.
The company has employed a similar emphasis on quality to the foodservice side of the business, with its partners including Toronto’s much-buzzed about subscription pizza service General Assembly Pizza, and the local empanada company Gaucho Pie Co., which creates both traditional empanadas and unique flavour offerings such as a Reuben sandwich-inspired offering, as well as butter chicken and jerk chicken.
It also offers a convenience store mainstay in beef patties, although in this case the partner is a company called Street Bites, whose owner Tony Bradshaw has extensive restaurant experience with brands, including Morton’s of Chicago, and places a premium on quality ingredients. There are also in-store options designed to be quick and reasonably priced, while others align with MacDougall’s keto diet, such as egg bites.
All of its products are also available to order online, with Runner promising delivery to Toronto, Etobicoke and Mississauga in as little as an hour for a $10 flat fee. Although delivery still comprises a “large majority” of Runner’s total business, MacDougall says the brick-and-mortar location provides an avenue for customers to see or taste products in person before adding them to online orders. “Browsing products in-store tends to be a better experience than browsing online,” he explains.
MacDougall says the plan is to eventually open between four and six other locations within the GTA, using sales information gleaned from the online service to determine the best neighbourhoods to place the stores.
The goal is for two additional Toronto-area stores within the next year, followed by a Vancouver store in 2022 and eventual expansion into Montreal or Calgary. The company is also keen to establish a foothold in the U.S. within five years, he says.
From online app to physical store(s) in the world’s largest consumer market: It’s been quite a run for this Toronto start-up.